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Category: Estate Litigation

SUPPORT DEAD OR ALIVE

Date: 12 Dec, 2019| Author: Fred Streiman

One’s entitlement to support from an estranged spouse or common law partner is governed either by the Divorce Act or the Family Law Act. After death, a dependent that has not been properly looked after by the deceased in their Will may bring an application for dependent relief under the Succession Law Reform Act. In most circumstances, if a party is a dependent of a deceased that failed to make such a provision, they may commence an action under the Succession Law Reform Act for dependency relief. One cannot contract out of that obligation unlike the right to receive spousal support under both the Divorce Act and the Family Law Act.

The courts have held on a number of occasions the purpose of a dependent support order under the Succession Law Reform Act is significantly different than the purpose of a spousal support order under the Divorce Act. One needs to start with the decision in Cummings² a 2004 decision of the Ontario Court of Appeal and the decision in Phillips- Renwick vs. Renwick Estate a 2003 trial decision of the Ontario Superior Court of Justice.

While support if bared under a valid agreement can be waived one cannot contract out of the entitlement to dependent relief under the Succession Law Reform Act.

How to fix a will after death rectification

Date: 02 Oct, 2019| Author: Fred Streiman

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| Author: Fred Streiman

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| Author: Fred Streiman

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| Author: Fred Streiman

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| Author: Fred Streiman

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

 

Applying to Remove an Estate Trustee: Replacing Executors

Date: 05 Mar, 2014| Author: Fred Streiman

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.

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

Date: 05 Mar, 2014| Author: Fred Streiman

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 Law and meet with our legal professionals to discuss your legal issues.

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