Tag: will

05 Feb

Rehel v Methot: Life Income Funds and Spousal Entitlements

Umair Beneficiary Designations, Estate Planning, Executors and Trustees, Litigation, Pension Benefits, Trustees, Wills Tags: , , , , 0 Comments

In the recent case of Rehel v Methot, 2017 ONSC 7529, the Honourable Justice Gomery was asked to provide directions regarding the entitlement to money held in a life income fund account owned by the deceased testator.

Background Facts

William (the “Deceased”) made a Last Will and Testament one day before he committed suicide. At the time of his death, the Deceased held a life income fund account (the “Account”) at Scotiabank. The Deceased’s spouse, Sharon (“Sharon”) was named as the beneficiary of the Account at the time that it was opened in 2013.

However, in his Will, the Deceased directed his Estate Trustee to use the funds in the Account to pay off any debts owing at the time of the Deceased’s death. The Estate Trustee took the position that the designation under the Will replaced the prior beneficiary designation.

Application of Provincial Pension Legislation

Before engaging in a discussion over which designation should prevail, the first question before the Court was whether Sharon was automatically entitled to the proceeds of the Account as the Deceased’s surviving spouse.

The Deceased and Sharon were married in Quebec in 2005, and moved to Ontario in 2008. However, the money in the Account was from a pension plan registered in Quebec. The Court was asked to consider if provincial pension legislation in Ontario or Quebec was applicable to the distribution of the Account.

Subsection 48(1) of the Ontario Pension Benefits Act states that if a member who is entitled to a deferred pension under a pension plan dies before payment of the first installment, the surviving spouse of the person is entitled to receive payment. However, under subsection 48(3) of the Act, a spouse is not automatically entitled to the proceeds of a deferred pension if the parties are “living separate and apart” at the time of death.

The Estate Trustee argued that subsection 48(3) applied, and adduced evidence that suggested that the parties were separated as of the time of the Deceased’s death. Sharon filed an affidavit disputing that she had separated from the Deceased, and asserted that she and the Deceased had only discussed the possibility of a separation at the time of his death.

The Estate Trustee filed additional affidavit evidence that led Justice Gomery to conclude “beyond a doubt” that the marriage had broken down and that the parties were negotiating their separation from each other. Justice Gomery thus concluded that the parties were separated under Ontario law, and that Sharon was not automatically entitled to the proceeds under the Pension Benefits Act.

Another question before the Court was whether Quebec law applied to the question of Sharon’s entitlement to the Account. Under Quebec pension legislation, the automatic right to spousal benefits is “terminated by separation from bed and board.” The Estate Trustee asserted that the application of Quebec law made no difference, whereas Sharon asserted that “separation from bed and board” meant something different than “living separate and apart.”

Justice Gomery noted that the law of another province is “foreign law,” and must be proved. Absent such proof, Justice Gomery held that the Court must assume that the foreign law is the same as Ontario law. Thus, Justice Gomery concluded that Sharon was not entitled to the death benefit under the Deceased’s pension plan by right.

Next Question: Which Beneficiary Designation Prevails?

Given Justice Gomery’s conclusion that Sharon was not entitled to the Account by operation of statute, the Court concluded that Sharon would only be entitled to the funds in the Account if she was the designated beneficiary as of the Deceased’s death.

In tomorrow’s blog, I will discuss Justice Gomery’s discussion of the terms of the Deceased’s Will, and whether the direction to the Estate Trustee overrode the earlier designation in Sharon’s favour.

Thank you for reading,

Umair Abdul Qadir

15 Jan

Is Acting as an Estate Trustee a Good Idea?

Kira Domratchev Estate & Trust, Estate Planning, Executors and Trustees, Trustees, Uncategorized, Wills Tags: , , , , , 0 Comments

If someone asks you to act as their Estate Trustee, or you learn to your surprise that you are named as an Estate Trustee after the person’s passing, there are a number of things that you should consider before accepting such a responsibility. Given the significant duties involved in such a role, it is important to be aware of the potential for personal liability.

An Estate Trustee’s Legal Duties

An Estate Trustee is a fiduciary and, as such, s/he owes a duty to exercise the care, diligence and skill that a person of ordinary prudence would exercise in dealing with the property of the Deceased.

Furthermore, an Estate Trustee owes a “duty of loyalty”, which has been described as the duty to act honestly and in good faith, and to use powers solely for the purposes for which they were granted (see Oosterhoff on Trusts: Text, Commentary and Materials, 8th ed.). The “duty of loyalty” means that:

(a) An Estate Trustee must exercise powers and perform duties solely in the interest of the Estate.

(b) An Estate Trustee must not knowingly permit a situation to arise where:

(i) The Estate Trustee’s personal interest conflicts in any way with the exercise of powers or performance of duties; or

(ii) The Estate Trustee derives a personal benefit or a benefit to a third party, except as far as the law or the Will expressly permit.

Additional legal duties of an Estate Trustee are:

  • The “prudent investor” rule which ensures that the Estate Trustee properly invests the Estate assets;
  • The “even-hand” rule which ensures that the Estate Trustee acts impartially among all the beneficiaries;
  • The “duty of transparency” which ensures that the Estate Trustee provides information to the beneficiaries; and
  • The “duty to account”.

Some Practical Considerations

From a practical stand point it is also prudent to consider the overall complexity of the Estate and what type and quantity of work will be expected from you in your role as an Estate Trustee. Certainly, some Estate Trustees can be compensated for the work they perform; however, there is a limit to what one may claim and it largely depends on the circumstances.

There are certain tasks that an Estate Trustee may want to delegate to third parties; however, there is a limit as to what type of work may be delegated and what is considered reasonable.

You should consider whether the Will properly sets out the powers as well as the responsibilities of the Estate Trustee which will aid you in the future, should any of your decisions be challenged. Another useful consideration is whether there are any third parties, or specifically, any beneficiaries who may be difficult to deal with in your role as an Estate Trustee, or may want to challenge your authority in the future.

In making the decision whether or not to act as an Estate Trustee, it may also be a good idea to speak to a lawyer regarding whether taking on this role may present an unacceptable legal risk for you in the future.

Thanks for reading.

Kira Domratchev

Find this blog interesting? Please consider these other related posts:

The Difference Between Powers and Duties of an Estate Trustee

Estate Trustees’ Standard of Care

Estate Trustee Duties

18 Dec

Grosseth Estate v Grosseth: Presumptions of Resulting Trust & Undue Influence

Rebecca Rauws Estate & Trust Tags: , , , , , , , , , , , 0 Comments

In the spirit of the holidays, today I thought I would write about a recent decision related to gifting. In Grosseth Estate v Grosseth, 2017 BCSC 2055, the British Columbia Supreme Court considered whether the presumptions of resulting trust and undue influence were applicable to various inter vivos gifts made by a deceased uncle to one of his nephews. Ultimately, the court concluded that both presumptions were rebutted, and the gifts were valid.

In Grosseth Estate, the deceased, Mort, left a Will providing that the residue of his estate was to be distributed equally amongst his 11 nieces and nephews. However, most of his estate had been gifted to one particular nephew, Brian, and his wife, Helen, prior to Mort’s death. This left only about $60,000.00 to be distributed in accordance with Mort’s Will. One of Mort’s other nephews, Myles, who was the executor of Mort’s estate, brought a claim against Brian and Helen following Mort’s death, seeking to have the money that had been gifted to them by Mort, returned to the estate.

About 10 years prior to Mort’s death, he moved from Alberta, where he had lived most of his life, to British Columbia, where he moved into Brian and Helen’s basement suite. Mort became a full participant in the family; he was included on family outings, attended family dinners every night, and became like a grandfather to Brian and Helen’s children.

For the first couple of years after Mort moved in, he gave Brian and Helen money each month, on an informal basis, as contribution to household costs. Around 2 years after Mort had been living with them, Brian and Helen had decided to purchase a commercial property for Helen’s chiropractic practice. Mort insisted on gifting $100,000.00 towards the purchase price, making it clear that he did not want anything in return. Following this payment, Mort did not make further contributions to the monthly household expenses. The court concluded that there was a tacit agreement amongst Mort, Brian, and Helen that Mort’s generous gift had cancelled any notion that further payments would be required. Several years later, Mort also gifted $57,000.00 to Brian and Helen to pay off the balance of their mortgage.

The court found that the nature of the relationship between Mort, Brian, and Helen gave rise to the presumption of resulting trust as well as the presumption of undue influence. However, both of these presumptions are rebuttable.

The court acknowledged that, with respect to undue influence, Mort did depend on Brian and Helen, but based on the evidence of a number of individuals, concluded that he remained independent and capable throughout. Accordingly, the presumption of undue influence was rebutted.

The presumption of resulting trust was also rebutted as the court was satisfied that Mort intended the transfers to be gifts motivated by “a natural and understandable gratitude to Brian and Helen for the happiness and comfort of his final years.”

It is not uncommon for this type of situation to come up. Where a deceased lived with one niece or nephew (or sibling), or where the niece/nephew/sibling is the primary caregiver prior to the deceased’s death, any gifting that was done in the context of this relationship may be vulnerable to challenge on the basis of resulting trust or undue influence. Unfortunately, in some instances, the relationship dynamics involved in these kinds of arrangements can result in suspect gifts or transfers. Transfers made without clear evidence of an intention to gift can also raise questions. In this case, the court did not find that there was any improper behaviour on the part of the giftees, did find evidence of an intention to gift, and the transfers were ultimately upheld.

Thanks for reading,

Rebecca Rauws

 

Other blog posts that you may enjoy:

28 Aug

Will Drafting and Testamentary Capacity

Noah Weisberg Capacity, Estate Planning Tags: , , , , , , , , 1 Comment

Many estate solicitors are retained to draft Wills for elderly clients.  Concerns over capacity are normal.  As such, I am frequently asked how thoroughly a drafting solicitor should enquire into capacity.

Although there is no universal answer, the decision in Wiseman v Perrey, provides helpful insight.  Referring to an earlier decision from the Manitoba Court of Queen’s Bench, the Court set out the basic rules dealing with testamentary capacity where a professional, such as a drafting solicitor, is involved:

(a) neither the superficial appearance of lucidity nor the ability to answer simple questions in an apparently rational way are sufficient evidence of capacity;

(b) the duty upon a solicitor taking instructions for a will is always a heavy one.  When the client is weak and ill and, particularly when the solicitor knows that he is revoking an existing will, the responsibility will be particularly onerous; and

(c) a solicitor cannot discharge his duty by asking perfunctory questions, getting apparently rational answers and then simply recording in legal form the words expressed by the client.  He must first satisfy himself by a personal inquiry that true testamentary capacity exists, that the instructions are freely given, and that the effect of the will is understood.

There are a variety of tools a solicitor should employ, including having the testator take a Mini-Mental State Examination.

Depending on the severity of the solicitor’s concern, the use of a capacity assessor who specializes in assessing testamentary capacity should be considered.  The assessor should be specifically instructed to assess whether a testator has the capacity to make a new Will.  Although not an easy topic to broach with a client, these types of assessments can assist in ensuring the testator’s last ‘capable’ wishes are followed.

Noah Weisberg

Find this topic interesting? Other related blogs include:

04 Apr

Hull on Estates #513 – Drafting Protection of Trustees

76admin Hull on Estate and Succession Planning, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes, Trustees, Wills Tags: , , , , , , , 0 Comments

This week on Hull on Estates, Natalia Angelini and Stuart Clark discuss options that may be available to help protect a trustee when drafting a Will or Trust.

 Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.
21 Mar

Testamentary Wishes Must be Respected

Lisa-Renee Estate & Trust, General Interest, In the News, Wills Tags: , , , , , , , 0 Comments

In a recent case, Ilott v. The Blue Corss & Ors, [2017] UKSC 17 (15 March 2017), the Supreme Court of the United Kingdom has affirmed that a testator has testamentary freedom to disinherit his or her child.

As outlined in a recent National Post article, the Court rejected a daughter’s proceeding to set aside her late mother’s will, which left the majority of the mother’s estate to several animal charities.  In the will, the mother also directed the executors of her estate to resist any efforts her daughter may make to challenge the will.

The disappointed daughter exercised her rights pursuant to the Inheritance (Provision for Family and Dependants) Act 1975 (the “1975 Act”), which allows certain individuals such as spouses and children to make a claim for reasonable financial provision from an estate.

Unlike Part V of Ontario’s Succession Law Reform Act, the 1975 Act does not require the deceased testator to have provided his or her dependant with support or to have been under a legal obligation to provide support immediately before his or her death.  Rather, the 1975 Act requires the surviving child to prove that the deceased’s will did not include reasonable financial provision for his or her child in light of the child’s own financial resources and needs.

Interestingly, the daughter appealed the District Judge’s award of £50,000.00 to her and the Court of Appeal’s decision awarding her £143,000.00 to buy the house she lived in and an additional £20,000.00.  On appeal, the Supreme Court reversed the Court of Appeal’s decision and restored the District Judge’s decision on the basis that the District Judge’s decision struck an appropriate balance between the mother’s testamentary wishes and the daughter’s claim for reasonable financial provision from the estate. In doing so, the Supreme Court upheld the long standing principal that people remain at liberty to dispose of their assets and property subject to provisions of the 1975 Act.

Other Articles you May be Interested In:

Testamentary Freedom Reconsidered
Is Discrimination a Restriction on Testamentary Freedom?
Validity of In Terrorem Conditions

Thanks for reading!

Lisa Haseley

17 Feb

A Funeral for the Ages?

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

Celebrities and Explosions.

Now that I have your attention, yes today’s estate blog is actually about celebrities and explosions.

Johnny Depp, the famed actor.

Now I really have your attention.

I recently came across this article in The Guardian, which highlighted the efforts made by Depp to plan Hunter S. Thompson’s funeral after his passing in February 2005.

Thompson, well known for authoring Fear and Loathing in Las Vegas had made requests prior to his passing to Depp, a close friend, as to how he wanted his ashes to be scattered.  Depp stuck to his word and took steps to ensure that Thompson’s last wishes came true and made sure that “his pal was sent out the way he wanted to go out”.

As such, Thompson’s ashes were fired from a cannon that was placed atop a 153-foot tower shaped like a double-thumbed fist, clutching a peyote button, on Thompson’s Colorado farm.  Yes, apparently Thompson loved explosions.

The total cost of the funeral was $3 million, which apparently, was funded entirely by Depp.

The surviving spouse, Anita, Thompson, supported Depp’s decision and even went on to state that the grounds where the cannon stood, remains a meditation labyrinth that is used every day at Thompson’s Colorado farm.

In Ontario, an estate trustee has the paramount legal authority to determine the place and manner of burial.  There is no legal requirement for the estate trustee to follow the wishes expressed by the deceased (or the family of the deceased).  Where a Will includes burial instructions, such instructions are precatory and not binding on the estate trustee.

Find this topic interesting?  Please consider these related Hull & Hull LLP Blogs:

Noah Weisberg

07 Nov

What to Do if You Receive A Not Clear Certificate from the Ontario Estate Registrar

Ian Hull Estate & Trust, Estate Planning, Executors and Trustees, General Interest, Litigation, Public Policy, Trustees, Uncategorized, Wills Tags: , , , , , , , , 0 Comments

What happens if an individual dies intestate, and upon application for a Certificate of Appointment of Estate Trustee Without a Will, a Not Clear Certificate is returned to the applying party?

Pursuant to Rule 74.12 of the Rules of Civil Procedure:

(1) A certificate of appointment of estate trustee shall not be issued until the court has received from the Estate Registrar,

(d) on an application where there is no will, a certificate that no will or codicil has been deposited in the Superior Court of Justice.

A will being deposited in the Superior Court of Justice does not necessarily mean that the will belongs to the deceased individual.  Therefore, while one may receive a Not Clear Certificate (“Certificate”) from the Estate Registrar for Ontario, it does not guarantee that a will exists in the deceased’s name. Rather, the Certificate creates the need for the applicant to take extra steps to ensure that the wills that are deposited with the Superior Court of Justice are not wills that belong to the deceased.

Receiveing a Not Clear Certificate
“…while one may receive a Not Clear Certificate (“Certificate”) from the Estate Registrar for Ontario, it does not guarantee that a will exists in the deceased’s name.”

What Steps Should You Take?

A Certificate sent by the Estate Registrar for Ontario will contain a list of different deposit dates and court file numbers, corresponding to wills that are already deposited with the Superior Court of Justice. The listed wills on deposit will all have names similar to that of the deceased individual.

Upon receipt of the Certificate, it is the applicant’s or their lawyer’s responsibility to track down each of the deposited wills, in order to prove that they do not belong to the deceased. This involves attending the Registrar of the Court where the will has been
deposited. In some circumstances, faxing the Certificate will suffice. The Registrar will then deliver to the applicant a photocopy of the Envelope for Will on Deposit. This will allow the applicant to make the necessary investigation to determine that the will on deposit is not the will of the deceased. The Envelope for Will on Deposit contains the name of testator, the testator’s address, the name of the executor, the executor’s address, and the date the will was deposited for safe keeping.

Once the applicant gathers all of the Envelopes for Will on Deposit, the applicant must go through the envelopes and ensure they do not belong to the deceased. The applicant must then prepare an Affidavit stating that each Envelope for Will on Deposit does not belong to the deceased. The Affidavit should be filed at the Court, along with the Certificate. Once the Court is satisfied the deposited wills do not belong to the deceased, a Certificate of Appointment of Estate Trustee Without a Will should be issued. If the will does, in fact, belong to the deceased, different steps will need to be taken in order to obtain a Certificate of Appointment of Estate Trustee With a Will.

Thanks for reading,

Ian M. Hull

 

Other Articles You Might Enjoy:

The Dreaded Application for Certificate of Appointment of an Estate Trustee
How to Avoid Delays in Obtaining a Certificate of Appointment of an Estate Trustee

25 Oct

Hull on Estates #490 – Costs on a Will Challenge

Hull & Hull LLP Hull on Estate and Succession Planning, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes, Wills Tags: , , , , , , , 0 Comments

This week on Hull on Estates, Natalia Angelini and Stuart Clark discuss the recent decision of Lavoie v. Trudel, 2016 ONSC 4141 (http://bit.ly/2dAwIpI), costs reported at 2016 ONSC 4769, and the circumstance in which the court ordered all parties to bear their own costs in a will challenge notwithstanding that the challenge was not successful.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Natalia Angelini.

Click here for more information on Stuart Clark.

27 Sep

Back to Basics: Is This Testamentary?

Doreen So Continuing Legal Education, Estate & Trust, Estate Planning, Wills Tags: , , , , , , , 0 Comments

Pursuant to section 2 of Part I of the Succession Law Reform Act,

“A person may by will devise, bequeath or dispose of all property (whether acquired before or after making his or her will) to which at the time of his or her death he or she is entitled either at law or in equity…”

The interpretation of the term “will” is defined under section 1 of the Act to include,

Testamentary documents, what constitutes a valid will?
“A person may by will devise, bequeath or dispose of all property (whether acquired before or after making his or her will) to which at the time of his or her death he or she is entitled either at law or in equity…”

“(a) a testament,

(b) a codicil,

(c) an appointment by will or by writing in the nature of a will in exercise of a power, and

(d) any other testamentary disposition.”

The question of what constitutes a will was a topic of the recent Law Society of Upper Canada Practice Gems: Probate Essentials 2016 program on September 20, 2016 (click here if you are interested in a copy of the program’s agenda).

As an example from the program materials, Canada Permanent Trust Co v Bowman, [1962] SCR 711 was a case in which the Supreme Court of Canada found a handwritten document in a cardboard box of the deceased’s home to be valid where, “read as a whole”, the document showed the implicit intention of a testator who wished for certain dispositions of her property following her death.  The document in question listed certain people with dollar amounts or items beside each name, such as, “Ena $1,000.00 in National Trust” and “Laura—fur coat”.

An even more famous example may be found in Ian Hull’s prior blog on the testamentary disposition that was carved on the bumper of a tractor by an unfortunate farmer while he was trapped under its weight.  The farmer did not survive and following engraving can be discerned from the bumper, “In case I die in this mess, I leave all to the wife. Cecil Geo Harris.”

Thanks for reading!

Doreen So

 

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