I recently tweeted an article from the Wall Street Journal entitled Five Steps to Prepare for a Decline in Your Financial Cognitive Ability. The article points out that, although we easily consult health-care providers with respect to our physical health, we may have more difficulty recognizing our limitations and changes in our financial health. As we live longer lives, the likelihood of mental and cognitive decline increases, and accordingly, the need for a plan with respect to how to cope with such a decline increases as well.
During the holidays, many of us host and attend family gatherings, which may provide a good opportunity to discuss your plans and wishes with your loved ones, at a time when everyone is together in a relaxed, low-pressure environment. While such conversations are not always easy, they are a necessity to ensure that your wishes will be carried out, and that your family will not be stressed in attempting to discern exactly what your wishes are.
The first of the five steps suggested in the article is to talk to your spouse to ensure that both parties are in agreement with respect to your financial plan. The second suggestion is to organize your finances as clearly and simply as possible. If your finances are spread out over several banks or institutions, consider consolidating accounts. At the very least, it may be wise to create an inventory of all accounts, investments, and assets so everything can be easily located and accounted for.
The next step is to review your Will and your Power of Attorney for Property, or if you do not yet have either of these documents, arrange to have them prepared by a lawyer. With respect to your Will, ensure that you have clearly thought out your choice of executor, the bequests to beneficiaries, and anyone you may be leaving out. With respect to your Power of Attorney, of course, the most vital element is that you choose a trustworthy Attorney.
The fourth suggestion is to assign roles to your family members. This involves asking the individual if they would be willing to assume the role you have selected, and communicating within your family with respect to who will be responsible for which tasks. By having this conversation in advance, and explaining the reason for your choices, you may be able to avoid any surprised or hurt feelings at a later date, based on who has, or has not, been selected for a particular role.
The last suggestion included in the article is to seek professional assistance and advice from a lawyer and/or a financial professional. They can help you feel comfortable with the planning you have put in place and give you, and your family, peace of mind.
Thanks for reading.
As Christmas Eve is just hours away, it seems fitting to focus today’s blog on family holiday traditions and estates. One such tradition has been in the Ford (not the ex-Toronto mayoral) family for the past 137 years. Yes, this is a blog about a fruitcake. Not to be confused with a Panettone, but a fruitcake baked by Fidelia Ford in 1878 that has since passed through her issue over three generations.
In 1878 Ms. Ford baked a fruitcake that would age for a year and be eaten during the next holiday season. However, Ms. Ford passed away prior and her surviving children considered the fruitcake as the most immediate link to their mother. In fact, the Ford family genealogy states that “…there wasn’t anyone to bake another, so they decided to keep it out of respect for her memory”. As such, they kept the fruitcake in her honour.
It does not appear that Ms. Ford’s Last Will left any specific instructions as to the preservation or management to the custodians of this decadent asset. Steadfastly, the fruitcake has been stored in a glass dish with only one significant intrusion when an Uncle Amos attempted to eat the fruitcake in 1964. This would of course have arisen many years after the fruitcake would have deemed to have been disposed of in accordance with the twenty one year rule against perpetuities.
Lately however, according to a recent article in The Globe & Mail the fruitcake family tradition seems uncertain as Ms. Ford’s issue seem not to want it. Like so many atypical testamentary dispositions, the author of the article states that “an heirloom for one generation becomes a headache for the next. Tradition becomes chore”.
Alas, many hours on google has left me none the wiser as to whether any testamentary trusts have been settled for the benefit of a fruitcake…or any other food for that matter. I am also none the wiser as to whether Ms. Ford’s fruitcake would have fallen into her residue or distributed according to the personal property provisions in her Will (assuming she had one).
While I cannot admit to liking fruitcake, especially the antiquated varietal, Ms. Ford’s story provides a pleasant holiday reminder to enjoy family and traditions that bring family together. And, because this is an estates blog – to ensure that all assets are addressed, including those with sentimental value, in your testamentary documents.
This week on Hull on Estates, Natalia Angelini and Lisa Haseley discuss drafting and litigating no-contest clauses in Wills.
Should you have any questions, please email us at email@example.com or leave a comment on our blog.
This week on Hull on Estate Jonathon Kappy and Lisa Haseley discuss the differences and implications of proving a will in common form and solemn form.
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In a recent Ontario Court of Appeal decision, Holgate v Sheehan Estate, 2015 ONCA 717, the court was asked to consider an appeal from a motion for determination of an issue under Rule 21.01(1)(a) of the Rules of Civil Procedure. The Rule 21 motion arose in the context of a trial with respect to the interpretation of the will and codicil of John Holgate, and particularly the meaning of the word “use”. The appeal also dealt with the trial judge’s jurisdiction to hear the mid-trial Rule 21 motion, but this blog will deal with the former issue.
Mr. Holgate had passed away and was survived by two sons from his first marriage (the “sons”) and his second wife, (“Mrs. Holgate”). Mr. Holgate’s will and codicil provided for a life interest in two trusts to Mrs. Holgate. Following Mrs. Holgate’s death, Mr. Holgate’s children were entitled to the remainder of the two trusts. The wording of the two trusts provided that the trust assets were to be held for “the sole use and benefit of my wife MAY HOLGATE during her lifetime”.
The sons brought an action against their father’s estate, Mrs. Holgate’s estate and Mrs. Holgate’s daughter personally, claiming that Mrs. Holgate’s life interest allowed her to use the money but not save it. They alleged that Mrs. Holgate had not only used trust assets, but had also saved money, thereby depleting the capital of the estate to their detriment and contrary to their father’s intention.
Three days into the trial, the trial judge invited counsel to bring a mid-trial motion either for determination of an issue or for directions in order to determine this critical issue with respect to the interpretation of the will and codicil, namely the meaning of the term “use”. Counsel agreed to bring a Rule 21 motion and asked whether the wording of the will and codicil precluded Mrs. Holgate from accumulating wealth from the trusts in her own name.
The trial judge concluded that:
- nothing in the will or codicil prevented Mrs. Holgate from saving and accumulating wealth;
- the language of the will came as close as possible to conferring an absolute gift on Mrs. Holgate; and
- neither of the trusts included any limitations on the use of the assets by Mrs. Holgate.
On appeal by the sons, the Court of Appeal agreed with the trial judge’s interpretation, that the words and phrases used in the trusts indicate a clear intention on Mr. Holgate’s part to allow his wife unrestricted access to the funds. They also cited Dice v Dice Estate, 2012 ONCA 469, which held that “[t]he golden rule in interpreting wills is to give effect to the testator’s intention as ascertained from the language that was used”.
Thanks for reading.
A co-worker recently passed along this ESPN article chronicling the storied life of Ted Williams, arguably one of the greatest baseball players to have ever played the game. While I must admit that my love for sports stems from hockey and the beautiful game of soccer, as Estates lawyers, my co-worker and I were drawn to the issues surrounding the Last Will of Ted Williams and his burial wishes.
According to this Daily Mail article, Williams executed a Last Will and Testament in 1996 apparently indicating that he wanted to have his body cremated and his ashes sprinkled around his Florida Keys fishing grounds “…where the water is very deep”.
Notwithstanding the contents of Williams’ Last Will, it appears that some of his children approved the decision to have Williams cryogenically frozen. It seems that the motivation in part was a result of the vast amount of literature read by Williams’ son including The Prospect of Immortality which promotes that the “freezer always trumped the grave”. In addition, after his passing, his children produced a note signed by Williams and dated November 2, 2000 that his children “…and Dad all agree to be put into bio-statis after we die. This is what we want, to be able to be together in the future, even if it is only a chance”. Nonetheless, it remains unclear as to what Williams actually wanted.
Upon the passing of Williams, his body was flown to a cryogenics facility where Williams head ($50,000) and body ($120,000) were separately frozen and stored.
As a result of these actions, one of Williams children commenced a petition seeking the return of her father’s body to comply with the wishes set out in the Last Will. This claim was later withdrawn and to this day, Williams body remains frozen.
At this point, any Ontario Estates lawyer is probably reminding themselves that in Ontario, burial instructions in a Last Will are merely wishes and not binding. As a refresher, see this Hull & Hull blog with respect to the burial decisions surrounding Nelson Mandela.
Also of interest, it appears that Williams created an insurance trust for the benefit of his children only to be paid on the 10th anniversary of his death. This trust has now been dissolved.
Today on Hull on Estates, David Smith and Josh Eisen discuss the strict approach to due execution of a will in Ontario, and the more permissive alternative approach followed in some other provinces.
If you have any questions, please email us at email@example.com or leave us a comment on our blog page.
Click here for more information on Josh Eisen.
This week on Hull on Estates, Paul Trudelle and Holly LeValliant discuss beneficiary designations when a will is revoked. More specifically, they discuss a recent decision made by the Ontario Superior Court of Justice: Petch v. Kuivila, 2012 ONSC 6131 (CanLII).
Click here for more information on Holly LeValliant.
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.
It was Benjamin Franklin who famously stated, "The only thing certain in life are death and taxes". Beyond these two certainties, surely is another certainty, that is, upon the death of an individual, the remains of their property, however big or small, are to be distributed. This means that a will plays an integral role upon an individual’s passing. Whether a client is one of modest or limited means, or whether a client is of extravagant or unlimited means, the importance of having a will cannot be understated. Much of the reasoning supporting an individual taking the time to execute a will applies to all types of clients, wealthy or not.
One justification for having a will is to eliminate family fighting over the disposition of assets. In other words, a will helps to keep the peace. So long as a client’s will clearly demarcates how the assets are to be divided, it has the effect of reducing the amount of hostility felt towards family members who each may believe they are deserving of a bigger piece of the pie. Whilst it is true that a will cannot guarantee that no litigation will arise, if the will ends up being litigated over, a will and corresponding drafting solicitor notes should offer insight into one of the most important questions asked by the court, "what was the intention of the testator".
Not only does a will have the potential to save family members from fighting amongst each other as mentioned above, it also allows a testator to appoint guardians, most notably for minors and those who lack capacity, to ensure that they are adequately looked after. Although there are provisions in the law to ensure that such individuals are cared for, knowing that there is someone trustworthy appointed to make the necessary decisions, may limit concerns as to how the individual is to be treated in the future.
A further justification for having a will is that it empowers the testator to decide who is to receive their property. This is especially important for a testator who may only have a few cherished possessions and assets. Failing to draft a will results in an intestacy. This has the effect of letting the law decide under Part II of the Succession Law Reform Act, RSO 1990, c S.26, who is to be in receipt of the intestate’s property. Following the law of intestacy has the effect of bequests falling rigidly according to the law which may or may not be to the desire of the intestate.
Lastly, a carefully drafted will, or wills, have the potential to reduce one’s exposure to estate administration tax. This has the obvious consequence of a greater percentage of the assets flowing to the beneficiaries. In the Ontario Supreme Court decision of Granovsky Estate v. Ontario, 1998 CanLII 14913 (ON SC) the testator created two wills, a primary will dealing with assets subject to estate administration tax, and a secondary will dealing with assets falling outside estate administrative tax, such as shares of private companies. It was held that only the primary will needed to be submitted for probate (now referred to as a certificate of appointment of estate trustee with a will). Testators have since followed this trend and have created separate wills for assets that require estate administration tax to be paid.
Ian Hull – Click here for more information on Ian Hull.