Tag: weisberg

23 Oct

Can a Guardian Settle a Trust?

Noah Weisberg Capacity, Estate Planning, Ethical Issues, Guardianship, Power of Attorney Tags: , , , , , , , , , , , 0 Comments

Does an attorney, or guardian, have the power to change a grantor’s estate plan?

According to section 31(1) of the Substitute Decisions Act, a guardian of property (or attorney for property) has the power to do on the incapable person’s behalf anything in respect of property that the person could do if capable, except make a will.

The statute, however, is deceptively simple.  Can a guardian transfer property into joint tenancy?  Can a guardian sever a joint tenancy?  Can a guardian change a beneficiary designation on a RRSP, RRIF or insurance policy?  Can an inter vivos trust be established or an estate freeze undertaken to save taxes?  There are numerous cases which have tested these issues.

For instance, in Banton v Banton, Justice Cullity found that although the grantor’s attorneys had the authority to create an irrevocable inter vivos trust, they nonetheless breached their fiduciary obligations owing to the grantor, in creating the trust.

The irrevocable trust provided for income and capital at the trustee’s discretion for the grantor’s benefit during his lifetime and a gift over of capital to the grantor’s children, who were also the attorneys.  The scheme of distribution of the irrevocable trust was the same as provided for in the grantor’s will.   However, the court found that the fact that the remainder interest passed automatically to the grantor’s issue defeated the grantor’s power to revoke his will by marriage and would deprive his common law spouse of potential rights under Parts II and V of the Succession Law Reform Act and Part I of the Family Law Act.  The court found that the gift of the remainder of the interest went beyond what was required to protect the grantor’s assets.

Justice Cullity stated:

“I do not share the view that there is an inviolable rule that it is improper for attorneys under a continuing power of attorney to take title to the donor‘s assets either by themselves or jointly with the donor .  This must depend upon whether it is reasonable in the circumstances to do so to protect or advance the interest, or otherwise benefit, the donor.”

Noah Weisberg

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22 Oct

Fiduciary Accounts – Yes, Form Matters

Noah Weisberg Executors and Trustees, Guardianship, Passing of Accounts, Power of Attorney Tags: , , , , , , , , 0 Comments

In the Estate of Divina Damm the Court answers the following question – what form of accounts must a guardian of property use when filing an application to pass accounts?

The facts in Re Damm Estate are not remarkable.  A guardian of property commenced an application to pass accounts in accordance with Rule 74.18 of the Rules of Civil Procedure seeking court approval of her accounts.  No objections arose with respect to the accounts, such that the guardian proceeded to file the application ‘over the counter’ as an unopposed application to pass accounts.

Notwithstanding that there were no objections, the Court refused to approve the accounts.  The Court was concerned with the lack of detail and itemization in the entries, as well as the failure to comply with Rule 74.17.  The judge tried to “…link all numbers listed in the draft judgment with information presented in the accounts but [was] unable to do so – because the accounts are not in proper form”.

Interestingly, the judge considered whether smaller estates should be permitted to file accounts in a simple format, but noted that it was for the Legislature and the Rules Committee to consider.

Accordingly, the Court directed the guardian to re-serve and re-file the accounts prepared in compliance with Rule 74.17.

Noah Weisberg

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16 Aug

When Might a Solicitor be Negligent in Preparing a Will?

Noah Weisberg Capacity, Litigation Tags: , , , , , , , , , 0 Comments

Solicitors preparing Wills need to be mindful of the obligations they owe to a testator.  The seminal Court of Appeal decision in Hall v Bennett Estate provides a helpful refresher of the steps a solicitor should consider to ensure best practices are followed.

According to the Court, it is well established that a “solicitor who undertakes to prepare a will has the duty to use reasonable skill, care and competence in carrying out the testator’s intentions. This duty includes the obligation to inquire into and substantiate the testator’s capacity to make a will”.

Testing for capacity is fundamental – a solicitor has a duty to make inquiries into the testamentary capacity of the testator.

Should the solicitor have any doubt as to capacity, Justice Cullity in Scott v Cousins, famously states that “…careful solicitors who are in doubt on the question of capacity, will not play God – or even judge – and will supervise the execution of the will while taking, and retaining, comprehensive notes of their observations on the question”.

The Court of Appeal proceeds to summarize an article written by M.M. Litman & G.B. Robertson outlining errors made by solicitors in the preparation of a Will, leading to negligence claims,  including failing to:

  • obtain a mental status examination;
  • interview the testator in sufficient depth;
  • properly record or maintain notes; and
  • test for capacity.

As such, notes from a drafting solicitor should ensure that all of these are addressed.

In certain instances, although narrow, a duty of care might also be owed to a disappointed beneficiary.  A two part test is applied as set out by the Supreme Court of Canada in Cooper v. Hobart.

While claims for negligence by testators and disappointed beneficiaries cannot be stopped, a file with detailed notes can go a long way in defending such a claim.

Noah Weisberg

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14 Aug

Anthony Bourdain’s Estate

Noah Weisberg Estate Planning, In the News Tags: , , , , , , , , , 0 Comments

For all that is known about chef Anthony Bourdain’s colourful lifestyle, the estate plan he left behind is surprisingly comprehensive.

It has been reported that Bourdain left behind both a Last Will and Testament and a separate Trust.

Bourdain’s Will leaves the residue of his estate to his minor daughter, Ariane.  The residue has been valued at approximately $1.2 million, and consists of savings, cash, brokerage accounts, personal property, and intangible property including royalties and residuals.  In the event that Bourdain survived his daughter, the residue was to pass to his daughter’s nanny.

Bourdain appointed his estranged wife as estate trustee.  This makes sense given that Ariane is the daughter of the marriage and that the mother will likely have her daughter’s best interests in mind while the estate is administered.  Bourdain was also mindful to include in his Will other assets – personal and household effects, including frequent flyer miles.  Given the amount of travelling Bourdain did, it was shrewd of him to specifically include this in his Will.

A separate trust was also settled, apparently containing most of his wealth.  Again, his estranged wife is named as trustee, with Ariane as beneficiary receiving money from the trust when she turns 25, 30, and 35.  Presumably, Bourdain settled a trust to avoid the payment of taxes and the publicity associated with probate – another sign of a well thought out estate plan.

While so many celebrities succumb to poor estate planning, it is refreshing that in addition to teaching us about cooking, travelling, eating, and so much more, Bourdain also taught us about the importance of a thorough estate plan.

 

Noah Weisberg

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13 Aug

Post-Nuptial Agreements

Noah Weisberg Estate Planning Tags: , , , , , , , 0 Comments

Kanye West’s 2005 smash-hit, Gold Digger, includes lyrics that, “if you ain’t no punk; holla, ‘we want prenup! We want prenup!’; It’s somethin’ that you need to have”.  Certainly, an individual entering into marriage with prior wealth, should consider a prenuptial agreement.  What should spouses do though who do not have a prenuptial agreement and receive wealth after marriage?

Unlike a prenuptial agreement, a post-nuptial agreement, as its name suggests, is entered into after marriage.  Post-nuptial agreements are gaining in popularity amongst spouses who inherit property as a beneficiary of an estate or are pulled into the family business on the death of the parent.

Post-nuptial agreements are also being utilized as an estate planning protective measure.

Like a prenuptial agreement, a post-nuptial sets out how the assets of a married couple are to be distributed in the event of death or divorce, and can be as detailed as including the jurisdiction of the divorce and social media rules.

Entering into a post-nuptial agreement shouldn’t necessarily be viewed in a negative light.  The process of going through a post-nuptial agreement can be a cathartic experience for couples – it is an opportunity to look at assets and debts, air grievances, and discuss important parameters in a marriage such as payments to children from a prior marriage.

Given that marriage brings about special legal rights and obligations, those considering a post-nuptial agreement should consider speaking with a professional.

Noah Weisberg

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15 Mar

When Can an Estate Trustee Withhold an Inheritance?

Noah Weisberg Beneficiary Designations, Estate & Trust, Executors and Trustees, Joint Accounts, Litigation, Trustees, Wills Tags: , , , , , , , , , , 0 Comments

Is an Estate Trustee allowed to withhold an inheritance?  What if the inheritance is a specific bequest and the Estate has claims against the beneficiary?  These questions were considered in June Brayford v Brayford.

I will do my best to simplify the facts.  The testator named his two sons as Estate Trustees.  His Last Will left a specific bequest, the proceeds of a CIBC account, to his wife (from a second marriage).  The residue passed to the Estate Trustees.  While the testator was still alive, a joint account was set up with his wife (an investment account with Desjardins Financial and Edward Jones).

After the testator‘s passing, the Estate Trustees took issue when the wife withdrew funds from the joint account, believing that the funds should have fallen into the residue.  They alleged that the testator lacked the capacity to set up a joint account, and that the wife (who was also the testator’s guardian for property and personal care) breached her fiduciary duty by the setting up of the joint account.  In response, the Estate Trustees refused to pay the specific bequest.

Two claims arose – the wife demanded payment of the specific bequest and the Estate Trustees claimed an equitable set off of the specific bequest pending the resolution of the joint account assets.

The Court first considered the right of retainer as set out in Cherry v. Boultbee (41 ER 171), which sets out the right that an estate trustee has of keeping out of the share of an inheritance, a debt owing to the estate by the beneficiary.  The court noted an exception to this right though – when the inheritance is a specific bequest.  It is this exception that the wife relied on to compel the payment of the specific bequest.

The Estate Trustees claimed an equitable set-off.  They wanted to withhold the payment of the specific bequest until the claim against the wife regarding the joint account was heard.

The Court looked to Olympia for the procedure to be followed when considering a claim for both right of retainer and set-off.  It was held that given that the two claims were so closely connected, that it would be unjust to allow the wife to enforce the payment of the specific bequest without taking into account the claim by the Estate Trustees regarding the joint account.  So, the Estate Trustees were allowed to hold off on paying the specific bequest, pending the outcome of their claim regarding the joint account.

Noah Weisberg

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13 Mar

Essential Evidence Series for Estate Litigators

Noah Weisberg Continuing Legal Education, General Interest, In the News Tags: , , , , , , , , 0 Comments

It is with great pleasure to announce that myself, Ian Hull, and Lionel Tupman will be co-chairing a professional development program on Essential Evidence for Estate Litigators through the OBA.

The program has been created specifically for estate litigators and will run over three evenings on April 5, May 17, and June 6, 2018.

Details of the program can be found by clicking here.

This program is a must for anyone who litigates in the area of estates, wills, and trusts!

Noah Weisberg

12 Mar

Should I Bring a Motion in the Estates Court Without Notice?

Noah Weisberg Estate & Trust, General Interest, Litigation, Passing of Accounts Tags: , , , , , , , , , , 0 Comments

When is it appropriate to bring a motion in the Estates Court without notice?   The answer requires consideration of both the statute and common law.

The starting point is Rule 74.15(1) of the Rules of Civil Procedure.  Here, a person who has a financial interest in an estate is permitted to seek an order for assistance.  Some of the more ‘popular’ orders for assistance include: requiring a person to accept/refuse an appointment as estate trustee; requiring an estate trustee to file with the court a statement of the nature and value of the estate assets at the date of death; and, requiring an estate trustee to pass accounts.

Subject to narrow exceptions, Rule 74.15(2) allows these motion to be made without notice (in latin, ex parte).

Notwithstanding this, the Court has not necessarily embraced ex-parte orders with open arms.

For instance, Corbett J. in Robert Half Canada Inc. v. Jeewan found that, before ordering an ex parte injunction, a party needed to demonstrate some element of ‘extraordinary urgency’.

Moreover, and specifically in relation to estates orders for assistance, Justice DM Brown in Ignagni Estate (Re), noted that orders for assistance are not mere administrative devices, and that the consequences of failing to abide by such an order is significant.  He went on to say that, “[m]embers of the Estates Bar may regard the requirement to give notice of a motion for an order for assistance unless “extraordinary urgency” exists as imposing undue costs on the administration of the estate.  Against that must be weighed the fundamental principle that a court should not issue an order against a person without affording that person an opportunity to explain the other side of the story.  Many estate disputes arise in the context of strained family relationships, or out-and-out family battles.  Courts should exercise great caution before granting an order that imposes obligations on one side in a family dispute.  Unless some extraordinary urgency exists, prudence and the principles of natural justice require a moving party to give notice of the order requested so that the respondent enjoys the opportunity of placing the rest of the story before the court.”

Given this, although permissible, parties who intend to seek orders for assistance without notice, must ensure there is ‘extraordinary urgency’ in doing so.

Noah Weisberg

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02 Jan

Keeping Up with the Cottage

Noah Weisberg Estate Planning Tags: , , , , , , , , , 0 Comments

Cherished, memories, generational, and cozy, are just some of the words that evoke the magnificence that is the family cottage.  It is this magnificence that leads many families to want to hold on to the family cottage as part of their estate plan.  This is not always easy though, and the family cottage is often the centrerpiece of an estate dispute.  As such, careful planning is key.

Those that want the cottage to stay in the family should consider a co-ownership agreement.  The purpose of these types of agreements are to set out the governance of the cottage to ensure it is maintained and disputes are resolved.

Some of the key terms to consider in a co-ownership agreement include:

  • how basic expenses will be covered, including hydro, telephone, maintenance, and property taxes;
  • how extraordinary expenses, including capital expenses, are to be paid;
  • when payments are to be made and to whom;
  • which family members are allowed to occupy the cottage, and when;
  • are guests permitted;
  • should there be a management committee charged with making certain decisions;
  • what mechanisms should be used to resolve disputes;
  • the procedure for the sale or transfer by a co-owner; and
  • what happens upon the death of a co-owner.

If the Kardashians can teach us anything about estate planning (and you know that given the title, there had to be a Kardashian reference), it is that family dynamics are in flux.  New relationships emerge, siblings develop different values and beliefs, and sometimes, problems arise.  A good co-ownership agreement is not cookie-cutter, but a carefully crafted document reflecting the uniqueness of each family member that can evolve over time.

Noah Weisberg

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28 Dec

Estate Planning over the Holidays

Noah Weisberg Estate & Trust, Estate Planning, General Interest, New Years Resolutions Tags: , , , , , , , , , 0 Comments

The holiday season is upon us, and with it comes family gatherings, buying and wrapping gifts, and travel.  Suffice to say, it can be a hectic and busy time.  Nonetheless, with 2018 on the horizon, many of us take the time to reflect and set resolutions for the upcoming year.  Despite this, so many Canadians do not have a Will.

Why not?  Estate planning need not be trying, and the holiday season is a perfect time to start considering your estate plan.

With this in mind, I thought I would highlight an article from the Globe and Mail which does a great job of highlighting issues to get you thinking about your estate plan:

  1. Get started – make a detailed list of your assets, liabilities, and joint assets, and think about your family’s needs and lifestyle.
  2. Consider your options – do you want your bequests to be absolute, subject to the terms of a trust, or gifted during your lifetime?
  3. Appoint representatives – think about who you trust to administer your estate and ensure that they are up for the job.
  4. Special circumstances – are there any beneficiaries who have special circumstances such as those receiving ODSP, that would benefit from specific trusts?
  5. Taxation – meet with a professional to understand tax consequences and the vehicles available to limit the payment of taxes, including the use of joint ownership and estate freezes.
  6. Cottages – should your estate involve the cherished family cottage, think about whether you want it sold, or shared amongst family members. If the latter, think about preparing a co-ownership agreement.

Wishing all of our readers a happy New Year!

Noah Weisberg

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