Tag: trudelle

15 Nov

Show Me the “Money”

Hull & Hull LLP Estate & Trust, Litigation Tags: , , , , , , , 0 Comments

In Thiemer Estate, a decision of the B.C. Supreme Court, 2012 BCSC 629 (CanLII), the deceased left an estate having a value of $20m. He left a will that provided for various specific legacies. The will also included a clause that directed the payment of “the balance of any money which I may have at the time of my death” to a common-law spouse. The will went on to define “money” as including “the balance of any money which I may have in any savings and current accounts in my name, any savings certificates, shares and bonds but excluding” insurance proceeds and RRSPs.

At the time of his death, the deceased had bank accounts, GICs, a mortgage receivable, and most relevant to the proceeding, shares in private companies having a value of $14m.

At issue in the interpretation application was whether the definition of “money” in the will, which referred to “shares”, meant that the value of the private companies was to be paid to the common-law spouse.

The decision sets out the relevant guiding principles, and case law on the definition of “money”.

The court decided that the reference to “shares” in the definition of “money” was not intended to include the shares in the private corporations. Essentially, the items included in the meaning of “money” were items that were in the form of cash, or which could be readily converted into cash. This might, then, include shares in publicly traded corporations. It was held, however, that the definition did not extend to shares in a private corporation, which by their very nature could not be readily liquidated.

This conclusion was fortified by other terms of the will. For example, the will established a spousal trust. If the spouse’s position on the definition of “money” was accepted, there would be very little left in the spousal trust. Further, the will provided extensive administrative powers to the trustees with respect to the ongoing operation of the companies. The spouse’s interpretation of “money” would render these powers “superfluous”.

The case is very instructive in the interpretation of wills, generally, and the application of those principles of interpretation in a specific context. 

Thank you for reading,

Paul Trudelle – Click here for more information on Paul Trudelle

05 Oct

Don’t Be a “Waiter”

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A client (or friend, or my mother: I can’t quite remember who) once referred to her children as “waiters”, as in “They’re waiting for me to die”.

To this point, a recent article on the Globe and Mail online by Rob Carrick warns against children relying on an inheritance to bail them out.

The article refers to an oft-quoted report from 2006 that suggested that $1-trillion ($1,000,000,000,000) will be inherited in the next twenty years. The article suggests that this number might be less today, due to increased debt-load, falling property values, weak investment returns and longer lifespans. However, whatever the number may be today, it is still a significant one.

The article cautions children from relying on these numbers and a potential inheritance to bail them out of trouble. Carrick says “As for people counting on an inheritance, that’s only one step away, in financial planning terms, from waiting for a lottery win.”

As ill-advised as it may be, 53 per cent of Canadians are expecting an inheritance, and 57% of those who think they know what they are getting expect it to be in the six-figure range.

However, those expecting a big inheritance may be disappointed. Second (or third, or fourth…) relationships may eat into their inheritance. Further, seniors are living longer, and the costs of senior care can take up a large portion of a senior’s savings. Coupled with this is the fact that government pensions may not be able to provide significant assistance.

The message seems to be to live within your means, and plan for your own future needs and well-being. Don’t spend your inheritance before it comes in.

Have a great long weekend.

Paul Trudelle

04 Oct

Denying Compensation to a Guardian

Hull & Hull LLP Guardianship, Litigation Tags: , , , , , , 0 Comments

On Tuesday, I blogged on the recent Ontario Court of Appeal decision of Aragona v. Aragona, 2012 ONCA 639.

There, the application judge denied the guardian compensation. In so doing, the application judge noted the guardian’s failure to keep proper accounts. The Court of Appeal stated that a guardian has, by statute, a fiduciary obligation to carry out his or her obligations with honesty and due care and attention. “The core of these obligations includes the duty to be in a position at all times to prove the legitimacy of disbursements made on behalf of the estate.” 

Further, the application judge went on to find that “the conduct [of the guardian] has been shocking. He has literally helped himself to many thousands of dollars from his mother’s estate, at a time when his mother had Alzheimer’s and was unable to look after her own affairs.”

Together, these two factors led to a denial of compensation: a conclusion that was said to be clearly in the discretion of the application judge.

In denying compensation, both the Court of Appeal and the court below relied on the decision of Zimmerman v. McMichael Estate, 2010 ONSC 2947. This decision clearly sets out the obligations of a trustee, including the obligation to account. The application judge found that because significant funds disappeared from the estate without adequate explanation, it was appropriate to award no compensation. The application judge contrasted this with the situation in Re Assaf Estate, 2009 CanLII 11210.  There, there was wrongdoing found, but no harm was said to have resulted to the estate. In that situation, compensation was reduced by 50%, but not disallowed completely.

Thanks for reading,

Paul Trudelle – Click here for more information on Paul Trudelle

02 Oct

Appealing on the Basis of Inadequate Reasons

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Yesterday, Ian Hull tweeted on the recent Ontario Court of Appeal decision of Aragona v. Aragona, 2012 ONCA 639.

There, the Court of Appeal dismissed, for the most part, an appeal by a guardian from a decision dismissing his application to pass accounts. The motions judge ordered that the guardian repay a significant amount to the estate; dismissed his claim for reimbursement for certain legal fees, and deprived the guardian of compensation.

The guardian appealed the finding that he had to repay funds to the estate on the basis that the application judge did not provide adequate reasons. The Court of Appeal noted that the appellate court’s focus is on whether the reasons explain what was decided and why the decision was made. “Ultimately, the test is whether the reasons permit reasonable appellate review.” The Court of Appeal found that, “Shortcomings notwithstanding”, the application judge’s reasons were adequate. The findings of the applications judge were supported by the record; the applications judge’s assessment of credibility was entitled to deference; and the application of the facts to the controlling legal principles leading to the conclusions reached was explained.

Tomorrow, I will look at the discussion of the application judge’s denial of compensation.

Thanks for reading,

Paul Trudelle

17 Aug

Rich Kids

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According to a CNBC report, only half of millionaire baby boomers think that it’s important to leave money to their kids. A third of them would rather leave their money to charity rather than their kids. 

For example, Warren Buffett has reportedly given 85% of his wealth to charity (the Melinda and Bill Gates Foundation). “My kids were elated when I told them. They knew my views on inherited wealth and shared them. … I believe in equality of opportunity. … They should not inherit my position in society, based on the womb that they were born from.”

One reasons for this given in the article is parents wanting their kids to learn the lessons of struggle and hard work, and the joys of self-earned success. Another reason cited is that parents may not think that their kids can handle a substantial legacy.

Yet another reason parents may not want to leave their kids a lot of money is to avoid having their kids appear in “Rich Kids of Instagram” (twitter: #rkoi). The site, whose by-line is “They have more money than you and this is what they do”, features pictures of young people enjoying, to the extreme, the richer things in life.

As stated by Andrew Carnegie when he wrote on the very topic of passing on an estate in “The Gospel of Wealth” in 1889, “I would as soon leave my son a curse as the almighty dollar.”

Have a great weekend. Spend it wisely.

Paul Trudelle – Click here for more information on Paul Trudelle

16 Aug

The Challenge of Naming a Guardian in a Will

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In Ontario (as in most jurisdictions), a person entitled to custody of a child may appoint by will one or more persons to have custody of the child after the death of the appointer: see s. 61 of the Children’s Law Reform Act.

The appointment is only effective if there is no one surviving who is entitled to custody. In Ontario, the appointment is only effective for 90 days, during which time an application for guardianship is usually brought.

Choosing a guardian can be a difficult task. Where there are two parents, a consensus should be reached. (Under the Ontario legislation, where there is more than one appointment, the appointment is only effective with respect to the guardian(s) named in both appointments.)

The Will of the recently deceased Beastie Boy, Adam Yauch, contains an unusual clause that may be the result of the difficulty of resolving the question of who to appoint, and the compromises that are sometimes made.

In his Will, according to an article on the Forbes website by Deborah L. Jacobs, if Yauch died in an even-numbered year, his parents are to be appointed as guardians of his daughter, with his wife’s parents as backup. If Yauch died in an odd-numbered year, the situation was reversed, and his wife’s parents were appointed guardians, with Yauch’s parents as backup. 

Such a clause would only be effective if his wife predeceased him, or died at the same time as Yauch.

Presumably, the terms of Yauch’s wife’s Will mirrored these provisions.

An interesting solution to a common issue.

Thank you for reading,

Paul Trudelle – Click here for more information on Paul Trudelle

15 Aug

More on Productivity

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Yesterday, I commenced summarizing an article on time management found in the August 2012 newsletter from Palmer Reed, Chartered Accountants. 

Further time management tips include:

-always confirm meetings. This avoids wasting time associated with “no shows”; 

-organize and schedule trips so that several tasks can be completed on the same trip. If you are going out of town to meet a client, see if you can meet another client on the same trip;

-if you need to “mull over” a problem on a project, fill the time by completing other mundane tasks that must be completed. This, it is said, allows you to regroup your thoughts, while moving the project forward towards completion. Be careful, however, not to put off the difficult task indefinitely;

– keep social interaction to a minimum. The article reminds us that just five minutes lost ten times a day works out to be almost a month of lost working time over the course of a year; and

-schedule meetings near the end of the day. The time constraint of wanting to leave at the end of the day will help ensure that the agenda is dealt with efficiently.

Thank you for reading,

Paul Trudelle – Click here for more information on Paul Trudelle

14 Aug

On Being Productive

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Upon returning to the office from vacation, I found in my “In Box” the August 2012 newsletter from Palmer Reed, Chartered Accountants, Toronto. In it, there was an excellent article on time management. As the article states, establishing good work habits and tweaking existing ones will improve productivity and can be significant money savers.

The tips include:

-logging kilometres driven and destinations every day. This ensures proper reimbursement, proper allocation to client accounts, and avoids the problem of trying to recall trips at the end of the month;

-design a spreadsheet that categorizes expenses and ties them to your general ledger chart of accounts;

-save time by effective filing. Create detailed files, whether paper or electronic, and file documents immediately upon receipt;

-on that note, open and read all paper and electronic mail when received. Decide what to do with it. Failing to immediately deal with it means that you will have to deal with it again; and

-if possible, wait for all of the parts or pieces of information to be received. This avoids starting and then having to restart a project when further information comes in.

More tomorrow. For now, it’s time to get back to work!

Paul Trudelle – Click here for more information on Paul Trudelle

22 Jun

Assisted Suicide and Estate Issues

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Yesterday, I blogged on the Carter v. Canada (Attorney General) decision on assisted suicide, and how it addressed the issue of the mental capacity of the individual.

In thinking about the case from an estates perspective, I considered the potential impact of assisted suicide on life insurance. Most life insurance policies have a contestability clause that provides that insurance will not be paid out if the policy holder commits suicide within two years. Thus, an insurer may not pay out if there is an assisted suicide within two years. However, as noted in a posting on Insure.com, the odds of the contestability clause issue arising are “very small”. Most insurers will not issue a policy to a terminally ill applicant. If the applicant fails to disclose the medical condition, the policy may be void for that reason alone.

Another issue that arises is whether the public policy that precludes a person from inheriting from an estate on the basis that the potential beneficiary should not benefit from the crime. The Carter decision strikes down the provision criminalizing assisted suicide, but only in the context of “physician-assisted suicide”. The wording of the declaration goes even further, and declares that the provisions are of no force and effect

“to the extent that they prohibit physician-assisted suicide by a medical practitioner in the context of a physician-patient relationship, where the assistance is provided to a fully-informed, non-ambivalent competent adult patient who: (a) is free from coercion and undue influence, is not clinically depressed and who personally (not through a substituted decision-maker) requests physician-assisted death; and (b) is materially physically disabled or is soon to become so, has been diagnosed by a medical practitioner as having a serious illness, disease or disability (including disability arising from traumatic injury), is in a state of advanced weakening capacities with no chance of improvement, has an illness that is without remedy as determined by reference to treatment options acceptable to the person, and has an illness causing enduring physical or psychological suffering that is intolerable to that person and cannot be alleviated by any medical treatment acceptable to that person.”

Thus, the criminality of assisted suicide involving, say, a husband and wife, or parent and child, remains. Such an assisted suicide will therefore likely trigger the prohibition on inheriting.

The wording of the declaration of the court addresses another issue relevant to our practice. While it is generally understood that by a Power of Attorney, the grantor can grant power to do anything that the grantor can do except make a will, the declaration strikes down the criminality of physician assisted suicide only if the patient makes that decision personally, and not through a substituted decision maker.

Have a great weekend.

Paul Trudelle – Click here for more information on Paul Trudelle

21 Jun

Assisted Suicide and Mental Capacity

Hull & Hull LLP Capacity, Litigation Tags: , , , , , , , , 0 Comments

There has been much in the media lately on the British Columbia Supreme Court decision concering assisted suicide.

In the decision, Carter v. Canada (Attorney General), 2012 BCSC 886 CanLII, the Court struck down the provision in the Criminal Code that prohibits physician-assisted suicide.

(Section 241 of the Criminal Code provides that “Every one who (a) counsels a person to commit suicide, or (b) aids or abets a person to commit suicide, whether suicide ensues or not, is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.”)

The lengthy, well-organized decision deals with the question in great detail.

One aspect of the decision particularly pertinent to our area of practice addresses the government’s position that the impugned section is necessary in order to avoid the risk of wrongful death of incompetent persons. The government argues that it can be difficult to determine whether a person is capable of making a decision to end their own life.

The court accepted evidence to the effect that, even taking into account the possibility of cognitive impairment or depression in patients, and the possibility that physicians may be influenced by inaccurate assumptions about their patients, it is feasible for physicians to assess competence with high reliability.

The court concluded, on this narrow point, that it is feasible for properly-qualified and experienced physicians to reliably assess patient competence, including in the context of life-and-death decisions, so long as they apply a very high level of scrutiny appropriate to the decision and proceed with great care.

Thank you for reading.

Paul Trudelle – Click here for more information on Paul Trudelle


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