A current Georgia case vividly illustrates the legal, emotional and moral complexity often involved in estates litigation. According to the reports, Harvey Strother died at age 78, having succumbed to progressively severe alcoholism brought on by the tragic death of his daughter at age 23. Strother had built up a formidable nest of car dealerships around Georgia, dying with a net worth of about US$37 million. And a mistress 30 years his junior.
At issue are 3 amendments to Strother’s 1988 will in favour of his mistress. The will had left the bulk of his estate to his wife, their children and grandchildren. But one amendment gave his mistress a $7,900 monthly allowance, a second gave her health insurance and an island condo in Florida. The third – signed about a month before Strother’s death – gave her a Cape Cod cottage, a Florida boat slip and a Florida condo to her son. By that time Strother was drinking 1.5 gallons of wine a day (about 6.8 liters, or 9 bottles of wine).
At trial, the jury upheld the first two amendments, worth about $4.5 million to the mistress. However, the third one was invalid. Strother, was allegedly drinking even before he signed it and brought to the lawyer’s office by his mistress, and his signature was illegible.
The family is appealing the two amendments that were upheld, one on the basis that the witnesses were not even present (the mistress is appealing the third amendment struck out by the jury). Interestingly, the family is represented by Georgia’s ex-Governor Roy Barnes, who points out that the requirement for two witnesses "is an elementary part of the law that has been there since the time of Edward II." FYI, King Edward II, 1284 – 1327: yes, we deal with old law in estates litigation.
Have a great day,
I think that in a year I may retire. I cannot take my money with me when I die and I wish to enjoy it, with my family, while I live. – Harry Houdini, Magician and Escapologist
When I was around 6 or 7 years old, I was unequivocally obsessed with Harry Houdini. My brother and I used to have contests at the local pool to see which of us could hold our breath the longest. He always won, and I’d end the day a few nickels lighter.
Born Ehrich Weisz on this day in 1874, Harry Houdini emigrated with his family from Budapest to the United States in 1878. As a young man, Houdini’s initial attempts to establish a career in magic were relatively unsuccessful; he even had to double as ‘a Wild Man’ carnival act. Harry met his kindred soul in Beatrice (Bess) Raymond, a teenager trying to succeed in show business as a singer and dancer. They married in 1894. After meeting manager Martin Beck, Houdini found his niche in escape acts: handcuffs, ropes, straitjackets, and chains. His most memorable act was to escape “The Chinese Water Torture Cell” (pictured below). To develop his breath-holding capabilities, Houdini even had an oversized bathtub installed in his house so he could practice regularly.
In the fall of 1926, after having broken his ankle while performing the Chinese Water Torture stunt, and after several sleepless nights caring for Bess after she suffered a bout of food poisoning, Houdini was in his Montreal dressing room chatting with a college student who also happened to be an amateur boxer. The student asked Houdini if it was true that Houdini could withstand any blow to his body above the waist. A weakened Houdini replied yes, and began to rise to his feet, but before he had time to tighten his abdominal muscles, the boxer punched him three times. Houdini suffered a burst appendix, and later, peritonitis. He died on the afternoon of October 31, 1926 at age 52, and was later buried in his bronze ‘buried alive casket’, his head resting on a black sack of letters his mother had written him while alive. No autopsy was performed. In his 23-clause-long will, which had been prepared in 1924 with a codicil added in 1925, Houdini left his collection of over 5,000 books (valued at $30,000) to the Library of Congress. His brother Theo received most of his magic equipment and memorabilia; however, Houdini stipulated that the magic apparatus be ‘burnt and destroyed’ upon Theo’s death. Two assistants received $500 each, while The Society of American Magicians received $1,000. His ‘hat rabbits’ reportedly were given to the children of friends. The balance of Houdini’s estate went to Bess, and it was enough to cover his extensive debts and to allow Bess to live comfortably. Bess also received $50,000 in life insurance money, since Houdini had remarkably purchased a double indemnity life insurance policy in the event of his accidental death.
The Chinese Water Torture Cell secret remains a mystery to this day, and my breath-holding record stands at 1:03.
Jennifer Hartman, guest blogger
A Mareva injunction is a court order that freezes the assets of individuals or companies. It can be obtained without notice to the target individuals and/or companies and can then be extended on notice.
Mareva injunctions are usually employed in civil actions, typically situations involving fraud, where a plaintiff seeks to prevent a defendant from dissipating assets or removing them from the jurisdiction, pending final determination of the plaintiff’s action.
In Will challenge proceedings, particularly involving large complex estates, a Mareva injunction may be of use in cases where there is a high risk of dissipation or removal of contested assets by one or more parties to the proceedings, thus defeating the purpose of the Will challenge.
A party seeking a Mareva injunction without notice to other affected parties must make out a strong case of dissipation or removal of assets, through sworn evidence. There is also a duty of full and frank disclosure of all material facts and law, given that the affected parties are not able to defend against the injunction at first instance. Finally, the party seeking the injunction must give an undertaking as to damages. That is, the party must undertake to pay damages to the affected parties in the event that it is subsequently determined by a Court that the Mareva injunction should not have been granted. In Ontario, further to Rule 40.02, a Mareva Order obtained without notice is valid for ten days. It can then be extended by a Court, on notice to the affected parties. An affected party, once it receives notice, may immediately move to quash the injunction.
A Mareva Order may prove a valuable tool in preserving contested estate assets in Will challenge proceedings.
Have a great day!
Bianca La Neve
Annuities are often employed when an individual plans his or her estate. We have covered different aspects of annuities on past blogs on Hull on Estates.
A testator, for example, may choose to have one child’s portion of the future estate placed into an annuity that will create a flow of money over time. The child would have access to the cash flow, but not necessarily access to the principal amount.
In September 2008, Gayle Reid applied to the Superior Court of Justice for an interpretation. The claimant’s father, Bernard Wiesberg, died and left an annuity to his friend, Avonne Richter (also identified as his common-law spouse). Minimum annual payments of the annuity were directed in the Will to Ms. Richter who received them from 2003 through to 2007.
The Applicant was to receive the residue of her father’s estate. A 2005 Order by Dandie J. required Ms. Richter to designate Ms. Reid as the beneficiary. (A provision of the Income Tax Act required the beneficiary to be named, otherwise the retirement income fund would have collapsed, defeating the testator’s intent.)
The issue arose when Ms. Richter, who received the previous annual annuity payments in arrears up to 2006, chose to take the $17,015.57 payment in January, in advance for that year. Ms. Richter died on April 17, 2007.
The Applicant sought an interpretation of her father’s Will, specifically regarding the annual payments. As the payments were for the “lifetime” of Ms. Richter, the Estate owed $12,027.44 to the Applicant because the Court reasoned that calculations must be made to the date of Ms. Richter’s death. Therefore a pro-rata calculation was “the only reasonable and fair manner to ensure the two gifts in the Will are honoured.”
If the annuity had been paid in arrears that December, Ms. Richter’s Estate would have been owed a pro-rata amount of the annuity for that year calculated to the date of her death.
Have a good day.
Amending or altering a formal, attested will can be a difficult task. Such amendments may not be accepted by the Court, despite what may be the clear intentions of the testator.
The recent Ontario decision of CIBC Trust Corp. v. Horn is illustrative of the principles involved. There, the testator executed a formal, typed will. After execution, the testator made substantial handwritten changes to a number of bequests. The changes were not dated or signed. In addition, she added three unnumbered paragraphs to the will.
The court noted that any alteration to a will must be made in accordance with the formal requirements of the Succession Law Reform Act, unless the alteration renders part of the will completely obliterated. Alterations to a formal will must be signed and attested and signed by two witnesses.
Alternatively, it is possible to make a holograph codicil to a formal will. However, this too requires compliance with the requirements of the Succession Law Reform Act. For a holograph will or codicil, it must be signed “at, after, following, under or beside or opposite the end of the will”. In this case, the handwritten changes were not signed at all.
In conclusion, the court found that none of the additions or deletions could be given effect, and the Estate Trustee was directed to administer the estate in accordance with the typewritten will, and without considering any of the handwritten changes or additions.
Practitioners may want to advise clients of the requirements for amending or altering provisions in a will. Otherwise, a testator’s intentions may not be truly reflected in the will document that he or she leaves.
Thank you for reading.
This week on Hull and Estates, Christopher Graham and Bianca La Neve review the formal requirements to make a valid Will in Ontario and the consequences of failing to adhere to the formal requirement. The relatively recent English decision of Esterhuizen v. Allied Dubar Plc  2 FLR 668 is discussed.
Feel free to send us an email at firstname.lastname@example.org or leave us a comment on the Hull on Estates blog.
Today is the final installment of my discussion of Hix v. Ewachniuk Estate, 2008 CarswellBC 1300 (Hinkson J.).
After dismissing the will challenge on the basis of due execution, testamentary capacity and knowledge and approval, the court turned to the issue of undue influence. Despite the presence of suspicious circumstances, the court held that the challengers, not the propounder, had the burden of proving undue influence. However, while the son did not have the burden of disproving coercion, his evidence was to be tested against the preponderance of probabilities that rationally emerge out the all the evidence in the case.
The deceased was found to be vulnerable and dependant upon her son for all aspects of her existence. Conversely, the son was found to have an aggressive and domineering personality, both in general and with respect to his desire for absolute ownership of the family holding company.
The court found that the son was very caring of his mother. However, it did not accept his evidence on the issue of undue influence. The court asked a number of rhetorical questions as to why the mother would make the will that she did, despite the circumstances. The court concluded that that will was procured by the undue influence of the son.
The will was therefore found to be invalid.
Yesterday, I discussed Hix v. Ewachniuk Estate, 2008 CarswellBC 1300 (Hinkson J.), and the finding of the judge that suspicious circumstances existed, placing the onus back on the propounder to prove testamentary capacity and knowledge and approval.
As to testamentary capacity, the court referred to the oft – quoted decision of Banks v. Goodfellow, and the test for testamentary capacity.
It noted that the capacity required to direct the distribution of one’s estate by Will is “modest”. To be of a sound and disposing mind and memory, a testator must:
- be aware that they are making a will that takes effect on their death;
- understand the nature and extent of the estate to be disposed of by Will;
- be aware of those having a claim to the estate;
- have no disorder of the mind.
The court reviewed the evidence of the plaintiffs and the witnesses (other than the son) as to testamentary capacity. The court was satisfied that on the preponderance of the evidence, the testator had the necessary capacity to direct the disposition of her estate by will as of the date of the will.
As to knowledge and approval, the court noted that a suspicious circumstances raised in the case required that the son, as the propounder of the will, prove that the deceased knew of and approved of the contents of the will. The court did not accept the evidence of the son to the effect that the deceased had to carefully read her will and discuss it with him on numerous occasions. Despite this, the court concluded that the deceased knew of the provisions of the will that she signed.
To this point, the will survived most of the challenges to it. Will the will be accepted to probate? Can it withstand the final challenge: undue influence? Tune in tomorrow.
Yesterday, I introduced the will challenge decision of Hix v. Ewachniuk Estate, 2008 CarswellBC 1300 (Hinkson J.).
After disposing of the issue of due execution, the court turned to the doctrine of “suspicious circumstances”. The court referred to these Supreme Court of Canada decision of Vout v. Hay, where it was held that suspicious circumstances maybe raised by circumstances surrounding the preparation of the will, circumstances tending to call into question the capacity of the testator; or circumstances tending to show that the free will of the testator was overborne by acts of coercion or fraud.
Generally, the propounder of a will has the legal burden with respect to due execution, knowledge and approval, and testamentary capacity. However, upon proof that the will was duly executed, the propounder is aided by the rebuttable presumption that the testator knew and approved of the contents and had the necessary testamentary capacity.
The burden of establishing suspicious circumstances rests on those attacking the will. If evidence can be adduced which, if accepted, would tend to negative knowledge and approval or testamentary capacity, this burden is satisfied and the legal burden reverts to the propounder.
In Hix, it was the son who drafted the challenged will. The Court quoted from Vout v. Hay as follows:
“… if a party writes or prepares a Will, under which he takes a benefit, that is a circumstance that ought generally to excite suspicion of the Court, and calls upon it to be vigilant and jealous in examining the evidence in support of the instrument, in favour of which it ought not to pronounce unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true Will of the deceased.”
The court concluded that the son should never have agreed to draw the will for the deceased. The fact that he did in the circumstances “does more than raise suspicion; it cries out for it.”
Tomorrow: testamentary capacity, and knowledge and approval
I recently attended a breakfast seminar hosted by Hull & Hull LLP, where I listened to my colleague, Natalia Angelini, speak about a testator’s capacity to give instructions for the preparation of a Will.
During Natalia’s discussion, she spoke about the varying levels of capacity for different transactions. Natalia also touched on the traditional grounds that a Will could be challenged. I was particularly intrigued to learn that the circumstances surrounding the failure of a testator to make a will could be advanced as forming the basis for a will challenge.
One of the traditional grounds for a will challenge is undue influence. At its very basic form, undue influence occurs as a result of pressure brought to bear on the testator in giving instructions and executing the testamentary document. The pressure brought on the testator, must be of such a degree that the testator has reached the point of thinking, "It is not my wish, but I must do it".
In contrast, "reverse" undue influence (as it has been called) occurs where a testator is being prevented from signing a Will.
As this interesting topic continues to evolve, I am confident that the estate & trust bar will be looking on with interest.