Tag: trust law

11 Apr

Hull on Estates #514 – Intersections in Trust and Family Law

76admin Archived BLOG POSTS - Hull on Estates, Hull on Estate and Succession Planning, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes, Uncategorized Tags: , , , , , , 0 Comments

This week on Hull on Estates, Ian Hull discusses the various areas of interplay between trust law and family law.

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30 Mar

Does Crowdfunding Establish a Trust?

Suzana Popovic-Montag Estate & Trust, Trustees Tags: , , , , , , , , , , , 0 Comments

In 2014, a Toronto-based company successfully raised $1,235,389 (USD) of its $48,000 goal on Indiegogo for its wireless speaker system promising better-than-stereo sound. More recently, the website Gofundme provided the platform which allowed the parents to a 4 year old girl to raise $2,026,470 (USD) to help their child receive a potentially life-saving therapy trial.

Hardly a week goes by without a story on the success of yet another crowdfunding campaign. In what began as an alternative financing model, modern crowdfunding as it exists today has grown to become an extremely successful and potentially lucrative fundraising source. As a result, the legal question that has been raised is whether funds raised by means of crowdfunding constitute a trust, with all of the rights and obligations that this may entail.

The definition of a trust according to Black’s Law Dictionary is, “An equitable or beneficial right or title to land or other property, held for the beneficiary by another person, in whom resides the legal title or ownership.” At first glance, this is precisely what many crowdfunding campaigns seek to do. The funds raised are often held by a third party for the benefit of another. However, determining who occupies which role within the trust relationship can be difficult to navigate.

There are four parties in most crowdfunding campaigns: the donors, the website provider, the campaign creator, and the beneficiaries. As a result, it is not entirely clear whether it is the website provider or campaign creator that acts as trustee and, if it is the website provider, whether they hold these funds in trust for the campaign creator or the purported beneficiary of the campaign. As each crowdfunding campaign can vary significantly with respect to its set-up and intended purpose, determining whether a trust relationship is present is an exercise to be undertaken on a case by case basis.

For instance, some crowdfunding campaigns offer rewards in exchange for meeting a minimum donation level. In this sense, it could be argued that these rewards constitute consideration and the relationship becomes contractual in nature. In other campaigns, the funds are raised for a charitable purpose and as such, may be qualified as charitable trusts. On the other hand, campaigns established by friends and family that purport to raise funds for their loved ones, seek to provide a benefit to a private individual, as opposed to a general purpose. It is often these cases that lead to questions surrounding whether a trust has been established, or, in the alternative, whether a gift has been made.

According to this paper by Professor Oosterhoff, the law has generally provided that funds raised for a specified object give rise to a trust. Accordingly, Oosterhoff’s answer is that it depends on what the intentions of the donor were. He suggests that we need to look specifically at whether the donors intended to establish a trust or whether their relationship to the other parties can be characterized as one of contract or agency.

If a trust is established, the person(s) receiving the initial funds (whether it is the campaign creator or website provider) may find themselves in a fiduciary relationship. Trust law creates a higher standard of care and imposes and bestows rights and obligations upon both the trustee and beneficiaries. As a result, those engaged with crowdfunding campaigns, in any capacity, should be alert to this possibility and act accordingly.

Thank you for reading.

Suzana Popovic-Montag

 

30 Dec

Top Estate, Trust and Capacity Cases of 2015: A Year in Review

Suzana Popovic-Montag Capacity, Estate & Trust, Trustees Tags: , , , , , 0 Comments

As 2015 comes to a close, the usual lists compiling the top songs, movies and books of the year seem to be everywhere. Accordingly, it seemed only appropriate to follow suit with our own list of the top estate, trust and capacity cases of 2015 from across Canada.

#1: Bunn v Gordon, 2015 ONSC 4768

The deterioration of the relationship between Estate Trustee(s) and beneficiaries may necessitate the removal of the Estate Trustee(s). As such, careful consideration to pre-existing relationships and personality conflicts should be given when making an Estate Trustee appointment.

Click here and here to read our previous blog posts on this case.

#2: McConnell v McConnell, 2015 ONSC 2243

By categorizing an RESP as a trust held by a trustee (parent) for the benefit of the beneficiaries (children), the court held that removal of a co-trustee (spouse) may be appropriate in certain circumstances, such as when the co-trustees can no longer cooperate effectively.

Click here to read our previous blog post on this case.

#3: McLaughlin v McLaughlin, 2015 ONSC 3491

The court approved the principles of Smith v Vance in determining what qualifies as a “financial interest” for the purposes of the Rules of Civil Procedure and the Estates Act. The court also affirmed that a financial interest includes an interest derived from intestacy and that being a child of the testator on its own is not enough to pass the threshold of having a financial interest.

Click here to read our previous blog post on this case.

#4: Mroz v Mroz, ONCA 171

Evidence of a testator’s intentions remains key in the rebuttal of the presumption of resulting trust.

Click here to read our previous blog post on this case.

#5: Dueck v Chaplin, 2015 ONSC 4604

The court declined to exercise its discretion to remove the Estate Trustees after they tried to renounce. This was due to the fact that the Estate Trustees had already begun to administer the estate and were viewed as having “intermeddled”. Accordingly, they had a duty to propound the will.

Click here to read our previous blog post on this case.

#6: Moore v Getahun, 2015 ONCA 55

The Court of Appeal overturned the lower court ruling that stated that it is improper for counsel to assist an expert witness in the preparation of his/her expert report.

Click here to read our previous blog post on this case and here to listen to the podcast.

#7: Park v Myong, 2015 ONSC 2287

A look at conflict of laws within an estate law context shows that a determination that the court has jurisdiction over one issue in a case will not necessarily ensure that is also has jurisdiction over another separate issue in the same case.

Click here to read our previous blog post on this case.

#8: Estate of Forbes McTavish, 2015 BCSC 774

Communication between co-Estate Trustees is an important aspect of their fiduciary obligations and avoidance of such can warrant removal.

Click here to read our previous blog post on this case.

#9: Burkhardt v Burkhardt Estate, 2015 ONSC 2688

The court looked at the definition of “common habitual residence” to determine entitlement to a spouse’s estate (with respect to equalization claims). The court found that the “last common habitual residence” referred to under the Family Law Act referred to the place where the spouses recently lived as husband and wife and where they last participated in every day family life together.

Click here to read our previous blog post on this case.

#10: Heston-Cook v Schneider, 2015 ONCA 10

Unsuccessful parties to a claim against an estate that may have lacked appropriate standing can obtain blended costs awards (in certain circumstances). Here, partial indemnity costs were awarded against the unsuccessful beneficiary and the balance was payable from the estate.

Click here to read our previous blog post on this case and click here to listen to the podcast.

#11: Carter v Canada, 2015 SCC 5

Physicians are allowed to assist patients in ending their lives in certain circumstances. The SCC struck down s. 241(b) of the Criminal Code which imposed a legal ban on physician-assisted suicide.

Click here and here to read our previous blog posts on this case and click here to listen to the podcast.

#12: Spence v BMO Trust Company, 2015 ONSC 615

The court held a will to be invalid for public policy concerns. Specifically, the court found the will to be discriminatory as the evidence suggested that the testator had disinherited one daughter for having a mixed-race child.

This case has been appealed but the decision from the Court of Appeal has not yet been issued.

Click here, here, and here to read our previous blog posts on this case and click here to listen to the podcast.

This list is by no means exhaustive; however, it does provide an overview of many of the estate, trust and capacity issues that were considered by the courts over the course of the year.

Thank you for reading and Happy New Year!

Suzana Popovic-Montag

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