How to fix a will after death rectification

Date: 02 Oct, 2019

In rare circumstances, the court can repair a Will improperly drafted by a lawyer.

The law can be found in various cases including the Bank of Nova Scotia, the Haugrud 2160NSC 8150 affirmed on appeal, Whittingham v. Crese and Ross v. Caunters. The court has held that it will fix a Will if the lawyer made a mistake in one of these three situations:

  1. The lawyer accidentally make a mistake because of a typographical or clerical error.
  2. The testator (the person making the Will) instructions were not understood.
  3. Where the testator’s instructions were given but for some reason were failed to be carried out.

One usually would have to look at the notes of the lawyer and contrast them with that which had actually been drafted and the Will that was finally signed.

The court has the power to add or remove words if the court is satisfied:

  1. Upon reading the Will, it is clear that a mistake was made in drafting it.
  2. The mistake does not accurately or completely express what the testator’s intentions were.
  3. The testator’s intention must be so clear from the words of the Will that no other contrary intention can be assumed.
  4. The proposed correction by adding or removing words must give effect to what the testator intended from reading the Will as a whole and in light of the surrounding circumstances.
  5. The court will admit outside evidence (that is something other than reading the incorrectly drafted Will) to establish the error when it comes from the lawyer who made the mistake and can swear directly about what the testator intended. It is also old law that a court is to interpret a Will with a presumption against an intestacy. By virtue of an intestacy, one means that there is no proper disposition of the assets and then the testator’s instructions are being frustrated.

While complicated and not frequently done, it is a remedy available and is in sharp contrast to the usual view of the court in Ontario that a Will speaks only within its four corners without looking at outside evidence.

THE LAW ON REMOVING AN EXECUTOR #2

Date: 11 Sep, 2019

The law is the following:

  1. The Superior Court of Justice has inherent jurisdiction to remove trustees.
  2. The choice of the estate trustee is not be interfered with lightly.
  3. Removing an executor should only occur on the clearest cases and where there is no other realistic alternative.
  4. Anyone who has a financial interest in the estate may apply to remove an executor. The court’s main guide in deciding whether or not to remove an executor is the welfare of the beneficiaries.
  5. The parties seeking to remove an executor must show that failing to remove a complaint of executor will likely prevent the terms of the Will from being properly carried out. Removing an executor is not meant to be a punishment for past misconduct.
  6. Fighting or friction between the parties is not a reason alone for removal.

See Ford Kramer v. Mazman – Justice Casullo

Removing an Executor #3

Date: 11 Sep, 2019

As we have discussed elsewhere on this website, removing an executor also known as an estate trustee is not easy. In the recent case of Ford Kramer v. Mazman, a decision by Justice Casullo sitting in Newmarket, he outlined and reiterated the law on this point. Two sisters were the sole beneficiaries of their childless aunt’s Will. The aunt however had named a lifelong friend as the executor.

This already is a red flag. Our firm’s practice is to not appoint executors who have no financial interest unless there is an excellent reason to do so. The dynamics make for inherent difficulties. Why should an executor work hard when they have no financial interest in the estate being administered.

In any event, one of the two beneficiaries was especially close their aunt. The aunt apparently having full mental capacity attempted to bequeath her home to one of the nieces. This was plainly obvious and the friend was aware of that intention. A hand written Will known as a holographic Will was done by the aunt in which she indicated that she wished that transfer to take place. This holographic Will was a change to an earlier Will that she had made and was as such titled a Codicil. Before she could have a proper amendment to her Will prepared, the aunt died. The relationship between the Aunt’s friend/executor and the nieces quickly deteriorated. Nasty emails were exchanged, and the friend claimed that the second Will/Codicil was invalid. The friend went so far as to attempt to drive a wedge between the two sisters, who had always been close and on the same page with respect to their aunt’s estate.

The nieces brought an application to the court to have the friend removed as estate trustee. As pointed out in a number of earlier decisions, including that by Justice Quinn in the Radford Estate and by Justice Shaw in the Walsh and Witford Estate, the law is the following:

  1. The Superior Court of Justice has inherent jurisdiction to remove trustees.
  2. The choice of the estate trustee is not be interfered with lightly.
  3. Removing an executor should only occurin the clearest cases and where there is no other realistic alternative.
  4. Anyone who has a financial interest in the estate may apply to remove an executor. The court’s main guide in deciding whether or not to remove an executor is the welfare of the beneficiaries.
  5. The parties seeking to remove an executor must show that failing to remove a complaint of executor will likely prevent the terms of the Will from being properly carried out. Removing an executor is not meant to be a punishment for past misconduct.
  6. Fighting or friction between the parties is not a reason alone for removal.

The court felt that this test was met and the friend was removed.

Another issue is whether or not the two nieces were required to post a bond or security. This is necessary unless dispensed with by a court as neither of the nieces lived in Ontario. The test for such dispensation is encapsulated in the decision of Justice Brown in the Henderson Estate, a 2008 decision of the Ontario Superior Court. The court wants to see Affidavit evidence on the point, which should cover the following issues:

  1. The identity of all the beneficiaries of the estate.
  2. The identity of any beneficiary who is a minor or incapable person.
  3. The value of the interest of any minor or incapable beneficiary of the estate.
  4. Executed consents from all adult beneficiaries to the appointment of the applicants as executors and to an order dispensing with a bond. This should be attached as an exhibit. The last occupation of the deceased.
  5. Evidence as to whether all the debts of the deceased have been paid, including any obligations under any support agreement orders.
  6. Evidence as to whether the deceased had operated a business at the time of death and if the deceased did, whether any debts that business had been or maybe claimed against the estate and a description of each debt and its amount.
  7. If all debts of the estate have not been paid, evidence of the value of the assets of the estate, the particulars of each debt amount and name of creditor and an explanation of what arrangements have made with those creditors to pay their debts and what security the applicant proposes to put in place in order to protect those creditors.

Justice Casullo felt that the nieces had met that test and dispensed with the necessity of a bond.

Justice Casullo was obviously not impressed by the friend/executor and felt that she had acted in a mean spirited fashion, and ordered that she should be passed over as estate trustee. The judge felt that this was far more than a case of friction, but rather a case of outright hostility between the friend and the nieces.

As an aside, the friend/executor was eventually ordered to pay the legal fees of the nieces of almost $30,000.00 out of her own pocket. The case is not finished and there still remains to be a formal passing of accounts, a process that is discussed elsewhere in this blog.

It is fair warning to all involved, firstly that it is not simple and is clearly extremely expensive to remove an executor. One can well imagine that nieces’ legal fees probably far exceeded the almost $30,000.00 they received in costs. For a judge to have made such a decision would have only come after a number of lengthy and expensive steps had been undertaken.

Dispensing With A Bond/Administration Of Estates

Date: 11 Sep, 2019

If an executor lives outside of Ontario, or if the deceased left no Will, a bond is required to be posted by the proposed estate trustee before probate is granted. The normal course of action is to ask the court for an order dispensing with a bond. In most circumstances this is granted. The bond’s purpose (usually purchased from an insurance company) is to provide financial protection against an executor’s misdeeds.

The court wants to see Affidavit evidence on the point, which should cover the following issues:

  1. The identity of all the beneficiaries of the estate.
  2. The identity of any beneficiary who is a minor or incapable person.
  3. The value of the interest of any minor or incapable beneficiary of the estate.
  4. Executed consents from all adult beneficiaries to the appointment of the Applicants as executors and to an order dispensing with a bond. This should be attached as an exhibit.
  5. The last occupation of the deceased.
  6. Evidence as to whether all the debts of the deceased have been paid, including any obligations under any support agreement or orders.
  7. Evidence as to whether the deceased had operated a business at the time of death and if the deceased did, whether any debts that business had been or maybe claimed against the estate and a description of each debt and its amount.
  8. If all debts of the estate have not been paid, evidence of the value of the assets of the estate, the particulars of each debt, the amount and name of creditor and an explanation of what arrangements have made with those creditors to pay their debts and what security the applicant proposes to put in place in order to protect those creditors.

See decision of Justice Brown in the Henderson Estate.

Can an Estate Collect on a Life Insurance Policy if the Named Beneficiary is Disqualified? Or Can a Murderer collect his wife’s life insurance?

Date: 04 Jul, 2014

A recent case from the Ontario Superior Court of Justice raises some important questions about the interplay between estates law and insurance law. In Papasotiriou v Manufacturer’s Insurance Co[i], the named beneficiary of a life insurance policy could be disqualified on public policy grounds because he was the one responsible for the death of the owner of the policy. There is a long line of cases from the Supreme Court and Ontario Court of Appeal that clearly states that a person cannot profit from their crime. This means that the murderer cannot collect on the life insurance policy. In this case the named beneficiary was arrested for the murder but not yet convicted. The estate took the position that, if he is convicted and subsequently disqualified, the life insurance policy should be paid out to the estate.

Master Dash heard the case which involved a number of distinct legal issues. Firstly, the relatives of the deceased wanted to intervene in the alleged murder’s action against the insurance company. The accused murderer was trying to collect before the final verdict in the criminal case was announced and the family want to stop that from happening. Secondly, Master Dash granted the insurance company’s request to have the money in the policy paid into the court. This allowed the insurance company to move on from this policy and the court to stop proceedings until after the criminal case finishes. Finally, Master Dash made a distinction in insurance policies taken out by a beneficiary and those taken out by the deceased. If the ‘owner’ of the policy was deceased and the named beneficiary is disqualified, then the insurance company must pay out to the deceased’s estate. If the policy is ‘owned’ by the disqualified beneficiary, then the insurance company is not required to pay out.

This case illustrates how an estate can collect on a term life insurance policy that would have otherwise been disqualified because of the illegal actions of the beneficiary. The court is very clear that criminals cannot profit from their crime. Equally, this decision sends the message that the proceeds of an insurance policy can be payable to the deceased’s estate even when it is not the named beneficiary in the policy. This creates a distinction between policies taken out by the deceased and policies taken out by the alleged criminal.

This is a rare form of estate litigation but it does raise interesting challenges to basic principles. If you have an estates problem, contact the lawyers at Dale Streiman Law LLP. They have over thirty years of experience in estate matters, including a wealth of expertise in estate litigation.



[i] Papasotiriou v Manufacturer’s Insurance Co, 2012 ONSC 6473 available at http://www.canlii.org/en/on/onsc/doc/2012/2012onsc6473/2012onsc6473.html

 

Determining Mental Capacity to Make a Will: Can a Person with Dementia Change their Will?

Date: 07 Mar, 2014

Mental capacity is a very important topic when the validity of a will is called into question. There is no exact science to determining when a person is capable of making legally binding decisions, especially as it relates to their estate. Due diligence is required to ensure that the testator (person making the will) understands exactly what they are doing. With Canadians living longer than ever, questions relating to mental capacity, specifically for seniors with dementia, are on the rise.

There is a presumption in Canada that a person who has attained the age of majority can make a valid will. This presumption is rebuttable where there is evidence of suspicious circumstances that warranted further investigation. This can be anything that raises a suspicion in the preparation of the will, the capacity of the testator or a suggestion of coercion or fraud. Once this suspicion is raised, the onus shifts to the party seeking to enforce the will to establish that it was validly made. In terms of mental capacity, it is important to keep in mind that capacity is a legal definition and there is no set scientific standard that applies.

The recent BC Supreme Court decision in Moore v Drummond illustrates how the law evaluates a person’s mental capacity to make a will. Ms. Drummond died in 2011 at the age of 98. A year earlier, she made a new will that gave her entire estate to her neighbors of 40 years. Prior to this, she had a will drawn up in 1994 that left her estate to her son. However, her relationship with her son was tense and deteriorated over the years. Upon her death, the son claimed that the new will of 2011 should be excluded. In support of his claim he pointed to a medical opinion that was drawn up a week prior to Ms. Drummond changing her will. The report said she was incapable of making decisions regarding legal or financial affairs. The opinion was drawn up for the Public Guardian and Trustee of BC (PGT) using their standard form. The court also heard evidence that Ms. Drummond was suffering from dementia at the time. This raised suspicion that the will may be invalid on capacity grounds. Despite this evidence, the BC Supreme Court held that the will of 2011 was valid and that Ms. Drummond had the legal capacity to create a will at that time. The PGT report was insufficient evidence because it was drawn up specifically for PGT using a standard form. It was not a comprehensive medical opinion that addressed Ms. Drummond’s ability to create a will. Furthermore, at the time the will was made, her lawyer drafting the will took special steps to ensure that Ms. Drummond had capacity. The lawyer spent additional time with Ms. Drummond where they engaged her in conversation to evaluate her mental abilities. She was also able to fully remember the will and its dispositions more than 5 weeks later. This showed that she had sufficient capacity at the time the will was made and that she truly did intend to exclude her son from her will.

This case clearly shows that mental capacity to create a will does not mean perfect mental capacity. Diminished capacity raises a suspicion that the will is invalid, but the court can resolve this suspicion and declare the will to be valid. This is especially true when a lawyer drafting the will takes steps to ensure that the testator has the required mental ability to make a will. A medical opinion is not determinative in resolving issues involving legal capacity. They are informative and can be used to help make a legal evaluation. An experience lawyer will take specific steps to determine legal capacity and ensure that a will is validly drafted.

The lawyers at Dale Streiman Law LLP have over three decades of experience solving wills and estates issues. If you have a question about a will or the mental capacity to create a will, contact Dale Streiman & Kurz and meet with our legal professionals to discuss your legal issues.

Predatory Marriage, Elder Abuse and the Court’s Power to Fix Wrongs

Date: 06 Mar, 2014

Elder abuse targets some of the most vulnerable members of Canadian society. The abuse does not have to be physical; finance abuse is also a very serious threat to seniors. When this is combined with predatory marriage, Canadian seniors face real threats to the personal safety, financial security and the legacy that they intent do leave behind. Luckily, the courts have a number of tools at their disposal to counteract this form of abuse. In this blog post I want to canvas several ways in which the courts can combat financial and estate abuse.

The case of Juzumas v Baron provides an interesting case study on how the court can correct the wrongs perpetrated through predatory marriage. The facts of the case show a pattern of abuse towards an elderly Lithuanian Canadian, Mr. Juzumas. He was targeted by Ms. Baron and her son through conduct that Justice Lang characterized as reprehensible. Ms. Baron initially provided housekeeping services for free to Mr. Juzumas. As things progressed, she increasingly took control of Mr. Juzumas life. She began taking $800 a month in fees for the housekeeping services. This moved up to $1200 over time. The two eventually married, not out of mutual affection, but because she wanted to secure a survivor’s pension. The two never lived together and Ms. Baron verbally abused her husband regularly. When she discovered he had executed a will that would have denied her his largest asset, the house, she became furious. She orchestrated a transfer of the house to her son. Mr. Juzumas did not speak English, did not understand the transfer, and seemed genuinely surprised when he was told about it sometime after it was executed. Ms. Baron completely dominant Mr. Juzumas and he was dependent upon her, largely because he was terrified of ending up in a nursing home.

The court utilized the contract law doctrines of unconscionability and undue influence to render the transfer of the house unenforceable. The court also said there was evidence of non est factum (not my deed or not my deal) and that there was a lack of consideration (no money was given for the house). The facts of this case show that it was not just a bad deal that Mr. Juzumas wanted out of, there was serious wrong doing that made the contract unenforceable.

Ms. Baron also made a claim for quantum meruit, which is basically a claim for compensation for work that you have already done. In this case, Ms. Baron claimed that the months of housekeeping deserved compensation. The judge rejected this claim on several grounds. Firstly, there was never an agreement that she be paid. Secondly, she took compensation at $800 and then $1200 for most of the time. Thirdly, and most importantly, she cannot claim this type of relief because she is a wrong doer. As the judge put it, she does not have clean hands, her reprehensible behavior disqualifies her from any compensation she may have been owed.

Finally, Ms Baron also made claims to the house based on family law principles. She claimed the house was a matrimonial home, the value of which is subject to the equalization process. The judge rejected this claim on the basis that she never slept in the home, let alone ordinarily occupied it, therefore it was not a matrimonial home. The fact that it is not a matrimonial home means that Mr. Juzumas could deduct the value of the home at the date of marriage from the value of the home at separation for his net family property calculation. Ms Baron would have been able to claim a portion of the appreciation in value of the home through the equalization process. However, the judge found that the parties were validly married and separated all within the same day. Therefore, there was no appreciation in the value of the house to divide. The judge very skillfully used the family law to deny Ms. Baron any claim to Ms. Juzumas property.

This case provides a rare bright spot in the area of financial abuse of elderly Ontarians. The court was able to utilize the principles of contract law, family law and equity to deny Ms. Baron any compensation that she tried to take through her reprehensible behavior. This case involved a number of different fields of law. There were family law, contract law, wills and estates law and real estate law elements overlaid on top of a clear case of elder abuse. The interplay between these fields can be complex and requires significant expertise to sort through. The lawyers at Dale Streiman Law LLP have been leaders in these fields for decades. They have expertise on these issues and have successfully served client throughout southern Ontario.

By: Fred Streiman & Stephen Duffy
Fred-Streiman

Estate Trustee, Civil Procedure and Punitive Damages: The Power of the Courts to do More than they Were Asked For

Date: 06 Mar, 2014

In a previous blog post[1], I discussed the role of estate trustees and the consequences they face when they fail to live up to their fiduciary duty. The estate trustee is responsible for carrying out the last wishes of a person who died. Their fiduciary duty imposes responsibilities to look after the estate in a trust worthy manner with an eye to the interests of the beneficiaries. This is even more important when the estate trustee is looking after the estate for the benefit of children. This is the scenario that existed in Walling v Walling where the deceased appointed his brother as trustee over his estate. The deceased’s sons were minors at the time, therefore the will required the estate trustee to look after the estate until the youngest boy reached 21, at which point the trustee was obligated to turn over the estate to the boys. Unfortunately, this never happened and the children were forced to bring legal action to recover their father’s estate.

This case is important because it highlights the court’s power to impose significant penalties, even penalties that go beyond what the plaintiff is asking for, when the facts demand it. Punitive damages are a special type of money award that the courts can give. Typically, damages are awarded for specific harm, punitive damages are different though. They are designed as a punishment for conduct that the court deems particularly offensive to society. Their use is fairly rare in Canada but they will be used when the facts show a clear need.

This case warranted punitive damages because the trustee was exclusively responsible for a severe harm done to the children. By denying them their inheritances, the estate trustee made it difficult financially and limited their post secondary education opportunities. Furthermore, the trustees actions in excluding the children from their father’s funeral and denying them any significant sentimental mementos were particularly offensive. He was in a position of power and trust and he broke that trust to exploit the vulnerable children. The judge looked at the facts and award $100,000 in punitive damages. This was double the amount requested by the boys. The judge said it was warranted because a lower award would not properly reflect the court’s abhorrence of this type of conduct. Additionally, the judge was to use this award as a clear deterrent to others who may try similar actions in the future.

In litigation, there are rarely any certainties about the outcome the judge will provide. The court’s focus is upon justice and the judge’s decision will bear that in mind. In situations where a judge thinks a large amount is required they can go beyond what the parties have requested. Doubling punative damages in this case was warranted because of the specific effects that the estate’s actions had upon the children. This is certainly a rare occurrence, but it happens with enough regularity that people should take note of it.

The lawyers at Dale Streiman Law LLP have practiced estate litigation for decades and are experts in all facets of estates law. They can help resolve any estate disputes in a timely and cost effective manner.

Applying to Remove an Estate Trustee: Replacing Executors

Date: 06 Mar, 2014

There are a number of reasons why a party would want to remove or replace an estate trustee. In this blog post I want to canvas the important elements that the court will look at when an application for a appointment of a new trustee is brought. I will also look at some of the possible grounds past cases have used as justification for replacing an estate trustee.

The first thing to note is that the courts are very reluctant to interfere with a testator’s intentions. The court will respect the fact that the deceased wanted that specific person to act as their estate trustee. However, there are certain reasons that will cause the court to intervene. The authority to do so comes from the Trustees Act and from the residual power of the court at common law (Judge made law). A co-trustee, beneficiary or any person interested in the estate of the deceased can bring an application to the court to have the trustee removed.

When considering an application to remove an estate trustee, the court will consider four things. First, the court should not lightly interfere with the testator’s decision. Second, there needs to be clear evidence of necessity. Third, the main consideration is the welfare of the beneficiaries. Fourth, the acts or omissions of the estate trustee must endanger the administration of the trust itself. This last consideration sets a very high bar for the applicant to meet. The estate trustee can always argue that they were acting reasonably and honestly. There is no obligation for the estate trustee to be perfect.

The court has repeatedly refused to set a clear point at which they will step in and remove the estate trustee. The facts of each case will determine the outcomes and the major consideration is always the welfare of the beneficiaries. In the past, successful applications have been made when the estate trustee failed to act at all, did not act in good faith, was unwilling to carry out the terms of the will, was unable to act as trustee because of incapacity or had a conflict of interest with the trust. This list is not exhaustive but it sets out some of the basic grounds for a successful application to remove an estate trustee.

If you have questions about estates and the conduct of an estate trustee, contact the lawyers at Dale Streiman Law LLP. They are experts in wills and estates and estate litigation. They can evaluate your claim and help you resolve the problem efficiently and effectively.

DEPENDENT RELIEF CLAIMS WHAT IF YOUR COMMONLAW SPOUSE LEAVES YOU NOTHING IN HIS/HER WILL

Date: 06 Mar, 2014

Under the Succession Law Reform Act, a deceased is forced to make adequate provision for their dependents upon their death. Section 58 of the Succession Law Reform Act states:

Where a deceased.has not made adequate provision for the proper support of his dependents,the court.may order such (support) as it considers adequate

Dependents means the spouse, the parent, a child or a sibling of the deceased whom the deceased was providing support or was under a legal obligation to provide support immediate before his or her death.

A spouse includes the same definition as can be found in the Family Law Act, namely a common law partner with whom the deceased had lived continuously for no less than three years or in a relationship of some permanence and had a child together.

It is important to note that any such application must be made within six months from the date that the deceased’s Will is probated.The court has the ability to look at many different factors in determining what is appropriate but in the end, common sense is suppose to prevail. The court has wide latitude in making almost any kind of an Order. It can order a lump sum, periodic payments, payments to third parties or even mortgages against property.

One also should note that you cannot contract out of this right. It does not matter what a separation agreement states, this right cannot be extinguished or bartered away.It is important to note that what forms part of the deceased’s estate is quite wide and wider than what one would have thought have. Assets that the deceased held as joint tenants forms part of the assets. Life insurance proceeds is another common example. The court can freeze any money that it believes forms part of that estate from being administered or distributed.

Recently, the Superior Court of Justice in Ontario also injected a component of a moral obligation over and above that of simple dependency. Justice Di Tomaso in the Stevens v. Fisher case, held that a common law spouse who arranged no coverage and left nothing in their old Will to their common law spouse of eleven years, had clearly not made adequate provision for their dependent. Not only that, for eleven years, the common law spouse had been a devoted caregiver and wife. There was an old insurance policy for $84,000.00 which the deceased had named as a beneficiary his previous common law spouse.

The court was not impressed and ordered virtually all of the insurance policy left by the deceased be paid to Ms. Stevens, the devoted common law spouse of eleven years.It may very well be that the deceased simply forgot to do a new Will and to change the beneficiary of his insurance policy.These claims are complex and require the assistance of a lawyer experienced in estate litigation. The lawyers at Dale Streiman Law LLP would be pleased to assist in any claims following under this interesting legal umbrella.

By: Fred Streiman
Fred-Streiman