Tag: Trusts

16 Apr

The Ties That Bind

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It was recently held that a gift in a Will given to “all my nieces and nephews”, included not only the children of the testator’s siblings, but also the 18 nieces and nephews of the testator’s late wife: Holmes Estate (Re) [2007] B.C.J. No. 45.

The Court reviewed the prior judicial interpretation of the terms “niece” and “nephew” as used in Wills. It was satisfied that the words nieces and nephews could, in their ordinary meaning, apply to the children of the testator’s late wife’s siblings, and noted that while years ago the meaning of these words were confined to children of a testator’s siblings, the New Concise Oxford English Dictionary presently defines these terms as including the children of a brother-in-law or sister-in-law.

The Court then turned to the question of what the testator meant by “nieces” and “nephews”. After considering the surrounding circumstances, it concluded that the testator intended to benefit his late wife’s nieces and nephews. Circumstances in support of this finding were that these family members were named beneficiaries in his earlier Wills and that he had ongoing relationships with several of them. One additional and unique fact was that the alleged ambiguity was brought to the testator’s attention in his lifetime, and he indicated he was satisfied with the wording of his Will.

This decision is demonstrative of the reality that as definitions of families change so may their entitlement in the estate planning context (intentionally or fortuitously), which lawyers may want to keep in mind when crafting testamentary instruments.

Have a good day.

Natalia Angelini

03 Apr

Breach of Trust – Criminal Penalties

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Yesterday I suggested that criminal charges in Estates, capacity and trust cases might become more common.

In R. v. Bunn (2000), C.C.C. (3d) 505,  the Supreme Court of Canada considered the sentencing of a Manitoba lawyer convicted of converting some $86,000 worth of trust monies to his own use. The accused acted as attorney for property for Soviet/Russian beneficiaries of Manitoba and Saskatchewan estates. He received monies in trust, but instead of paying it all to the beneficiaries, he redirected some of it to himself.

This conduct was discovered by the Law Society of Manitoba when conducting a spot audit of the accused. The accused was disbarred. Some compassion may be warranted: the accused cared for a disabled wife, was the sole income earner in the family, suffered financial woes for years, and lost his reputation and 20-year law career.

At trial the accused was sentenced to two years in a federal penitentiary, but the Manitoba Court of Appeal substituted a conditional sentence of two years less a day.

The Supreme Court of Canada, in a 5-3 decision, upheld the Appeal decision. The majority decided that the need for restorative justice and the benefits of reducing prison terms outweighed the minority’s desire to denounce the accused and promote general deterrence.

Lawyers tend to be easier targets in these cases because of the need to establish mens rea (the intent to commit a crime). It would be difficult for any competent lawyer to claim ignorance of proper usage of trust monies, but laypersons may be a different matter.

Thanks for reading.
Sean Graham

19 Mar

The Invasion of the Trust and Settlement Discounters?

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Anyone can discount a commercial interest they own, trading money for convenience. There is always someone looking for a bargain.

In the United States, dozens of companies are offering to buy structured settlements and trusts. In fact, it is a huge business. Most U.S. states have passed laws requiring court approval of the sale of a structured settlement. However, in many instances, courts will approve sales of structured settlements and trusts for anyone claiming financial hardship.

I am not aware of any prohibition in Canadian law stopping such a discount trade in Canada. The owner of a trust can sell it, unless the trust contains a prohibition against its sale. As another example, one can sell his/her remainder interest in a trust, at a huge discount. It will be interesting to see if this type of discount trade catches on in Canada. If it does, regulation may become necessary to protect vulnerable beneficiaries of structured settlements or trusts. For example, court approval and/or full disclosure of potential consequences may be required. However, it seems unlikely that the government will seek to stop beneficiaries who are sui juris from selling their interest in structured settlements or trusts.

Have a great day!

Bianca

28 Nov

Hull on Estates Podcast #36 – Mediation

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During Hull on Estates Episode 36, we discussed:

  • mandatory mediation;
  • the types of matters that have mandatory mediation;
  • how mediation works in general;
  • what the general timelines are for proceeding to mediation; and
  • considerations for selecting a mediator.

21 Nov

Hull on Estate and Succession Planning Podcast #35 – The Family Conference – Special Needs Beneficiaries

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During Hull on Estate and Succession Planning Podcast #35, we discussed:

  • Special needs beneficiaries;
  • What the definition of a special needs beneficiary is;
  • The use of trusts for special needs beneficiaries; and
  • The proper planning for special needs beneficiaries and what happens to the assets and the trust when the special needs beneficiary dies.
21 Nov

Hull on Estates Podcast #35 – Will Challenges

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During Hull on Estates Podcast #35, we discussed the following:

  • Competing beneficiaries who join forces to challenge a Will when they do not have identical interests;
  • People that need to be served in a Will Challenge;
  • How to decide if you need your own lawyer or if you should join forces with the same solicitor; and
  • How to deal with the costs of the Will Challenge when dealing with several lawyers.
13 Jun

Hull on Estate and Succession Planning Podcast #12 – The “Prudent Investor” Rule

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In Hull on Estate and Succession Planning Podcast #12, we continued with our discussion of trusts and, in particular, the concepts of the “prudent investor” rule and incentive trusts.

 

06 Jun

Hull on Estate and Succession Planning Podcast #11 – The Concept of Trusts

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During this episode of Hull on Estate and Succession Planning, we talked about:

(i) the concept of trusts;

(ii) different types of trusts;

(iii) the advantages of a trust;

(iv) considerations in choosing a trustee; and

(v) an illustraion of how trusts provide much needed flexibility. ——–

 

25 Apr

Hull on Estates Podcast # 5 – More on Drafting Wills

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During our podcast, we discussed the following legal issues:

(i) constructive trusts;

(ii) specific devices and bequests;

(iii) life insurance;

(iv) the description of beneficiaries;

(v) trusts/life interests;

(vi) the selection and powers of trustees, including the power to encroach; and

(vii) ademption. ——–

 

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