COVID-19 – SIGNING OF WILLS AND POWERS OF ATTORNEY

Date: 17 Apr, 2020

Hopefully readers of this blog years from now will read this document and chuckle in amazement looking upon the subject matter as being a historical anomaly. 

However as this blog is drafted, we are in the middle of a global pandemic COVID-19 that I shall simply refer to as the plague. 

The plague has caused one and all to self-isolate around the world and has caused thousands of deaths.  There are a few of us who cannot recite the names of relatives or friends that have been taken far too early from us as victims of COVID-19. 

The plague has impacted the practice of Will and Powers of Attorney signing and the Government authorities have shown an uncharacteristic rapid flexibility in dealing with practical problems arising from the effect of the plague. 

The Provincial Government has allowed under very strict guidelines virtual signing of wills pursuant to a Provincial order in counsel, 518-2020 Ontario Regulation 50-20, pursuant to section 7.0.1 of the Emergency Management and Civil Protection Act and extended pursuant to section 7.0.7 of the Act.  In essence, during the duration of the declared emergency, the interpretation of the presence of the testator and witness as being present, under the Succession Law Reform Act (the Act that sets out the formalities for signing of a Will and Power of Attorney) permits that the requirement that witnesses be present for the execution of a Power of Attorney and Will may be satisfied by means of audio, visual communication technology provided that at least one person who is acting as a witness is a lawyer within the meaning of the Law Society Act. 

Audio, visual communication technology means any electronic method of communication in which the participants are able to see, hear and communicate with each other in real time. 

In other words, the myriad of social media apps such as WhatsApp’s, Facetime and Zoom are valid work arounds over the problem of Will and Power of Attorney signings during this crisis. 

Remember that “Testator” means the person making the will and giving instructions on what is to happen to their assets upon their death.  Testator and Will Maker are synonyms.

The specific process which we will outline below in greater detail is more laborious and time consuming, but it is an acceptable methodology of dealing with this plague induced crises.  This assumes that the lawyer/witness and witness #2 are physically together (Code for my ever helpful wife is beside me. The steps to follow are as follows:

  1. Our office will forward onto you in advance copies of the Wills and Powers of Attorney for you to review and confirm that they accurately reflects your instructions. 
  2. By teleconference, you will have a discussion with the drafting lawyer confirming that you understand the terms of the Will and Powers of Attorney and answering questions that you may have.
  3. Our office will email onto you a final version of the Will and Powers of Attorney for signing. 
  4. The clients/testator shall print out at least one copy of the Will and two copies of the Powers of Attorney. 
  5. The client will have forwarded by email onto our office by way of scanning or photograph photographic identification such as a Driver’s Licence.
  6. When the parties are ready to sign a video conference shall take place.  All testators must be visible and audible and be part of the video conference.  From our offices’ perspective, the two witnesses, one of whom must be a lawyer will be physically with each other and will participate in the video conference. 
  7. Each of the parties will confirm that they can see and hear one another, that the sound and video are on and transmitting. 
  8. Each of the testators shall identify themselves by holding up a piece of ID to the camera so that the parties can be identified. 
  9. No one else may be present with the Testator/Will maker who may be a beneficiary or who may be influencing the Will maker.  In other words, the testators and grantors of the Powers of Attorney must not have any other family members or friends present.   The obvious exception is a married couple who are making each other their primary sole beneficiary.
  10. The Will maker will follow the following process:
    • Hold up the first page of the Will to the camera. 
    • The two witnesses will confirm that they see the first page.
    • The Will maker will place their initials on the bottom right corner of each page.
    • The Will make will hold up the first page to the camera to show those initials. 
    • Each of the two witnesses will confirm that they see the initials. 
    • Repeat the process for each page until the last page.
    • On the last page, insert the date of signature where indicated. 
    • If not already inserted, place your initials next to the date if handwritten. 
    • The Will maker shall each sign with the regular signature on the last page when indicated.
    • The Will maker will hold up the last page to the camera to confirm and identify their signature. 
    • Each of the two witnesses shall confirm that they see the signatures. 
    • Rinse and repeat for the Powers of Attorney, no need to initial pages, just the signature on the last page at the appropriate location.
  11. The Will maker will arrange to deliver to the lawyer the signed Will and Powers of Attorney by courier.  The lawyer will tell you where to have the document delivered.
  12. When the lawyer receives the Will and Powers of Attorney the lawyer along with the second witness shall be present and a second video conference shall be held. 
  13. At the second video conference, all of the participants in the first video conference shall be present, and the following will take place: 
    • All the parties shall confirm that they can see and hear one another and that the sound and video are on and transmitting and each participant shall identify themselves. 
    • The first witness who is not the lawyer shall hold up the first page of the will to the camera.
    • Have the Will maker and the lawyer confirm that they see the first page. 
    • The witness number two shall place their initials in the bottom right corner of each page. 
    • Hold up the first page to the camera to show those initials.
    • Have the Will maker and lawyer confirm that they see the initials of the first witness. 
    • Repeat the process for each page until the last page. 
    • The non-lawyer witness shall place their initials next to the date if handwritten. 
    • The second witness shall insert the date of signing of the witness signature beside their witness line. 
    • The second witness shall sign with a regular signature on the last page where indicated.
    • Witness number two shall hold up the last page to the camera to show the signature. 
    • Have the Will maker and the lawyer confirm that they can see the last page of the witness number one. 
    • The lawyer shall then repeat the same instructions with respect to the non-lawyer witness.
    • Repeat the entire process for the Powers of Attorney however no witnessing of pages, only the signature page.
    • All parties shall be present throughout both of the video conferences.
  14. The lawyer shall then prepare an Affidavit of Execution of the will.
  15. The Will and Powers of Attorney shall be stored in accordance with the instructions of the client. 

This is a far more laborious process, but it is the best that can be done at this stage.  Failure to following these steps may make the Will invalid and it is important that all concerned pay careful attention to that which is required under these new emergency rules and regulations. 

As hopefully as is obvious from the laborious instructions, this is far more time consuming and as a result, there is a token $250.00 additional charge plus a courier fee.  As always, our clients have the option to simply defer until the passing of the plague and to simply sign the Will and Powers of Attorney in the presence of a lawyer and witness at our office. 

REMOVAL OF THE JUDGE RECUSAL MOTION- REASONABLE APPREHENSION BIAS

Date: 14 Jan, 2020

On rare occasions, one can remove the presiding judge if one can show that the judge is displaying bias in the hearing before them or for some other reason is not objective. One should look at the decision of Justice Paull of the Ontario Court of Justice in CAS Oxford v. EMT, a 2019 decision. In that case, Justice Paull reviewed all of the law in this area, which begins with the Supreme Court of Canada decision in R v. S, a 1997 decision and the Committee for Justice of Liberty v. Canada, a 1976 Supreme Court of Canada decision. The courts had held “the apprehension of bias must be a reasonable one held by reasonable and right minded persons applying themselves to the question and obtaining thereon the required information. The test is what would an informed person viewing the matter realistically and practicality…. and having thought the matter through conclude. The presence or absence of an apprehension of bias is evaluated through the eyes of a reasonable, informed practical and realistic person.

The Ontario Court of Appeal also weighed in Bailey vs. Barbour in 2012. It requires a high threshold of evidence when a party seeks a recusal i.e. the disqualification of a judge. Allegations of judicial bias will have to overcome a strong presumption of judicial impartiality.

Rarely attempted and even more rarely accomplished.

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 Courts Need To Be Run Like A Business

Date: 14 May, 2019

I am a lawyer that has practiced in Brampton Ontario for 40 plus years.

While the judicial system is a fundamental pillar of our democracy, that is no reason for a businesslike approach not be applied to it.

The Government for shortsighted economies has starved the support staff of the courts of funding, which in turn has led to a shortage of qualified clerks able to promptly deal with court filings.

I would propose that except for those litigants that are unable to afford the appropriate fees, that every filing should be accompanied by a fee that properly identifies the true cost to the court for the processing of that document. The Province should retain the services of a cost consultant to determine the proper cost of the processing of the filings that require the court’s attention. That cost should be all inclusive, not only of the clerk required, but the hard facilities that are needed to support that individual. That is the fee that should be charged. Like any business, there must be a cost benefit analysis and the proper burden upon the Province should be alleviated by the fee paid by the individual seeking that relief.

As a result of Government cutbacks which I believe are completely unnecessary and detrimental to all concerned. There are huge backlogs on the processing of mundane applications that my office is involved in.

The processing of an uncontested divorce can literally take months to obtain. We have heard reports of stacks of mail received by the courts that have not been opened as they do not have the manpower to deal with them.

Most egregiously from the Provinces’ financial prospective, the Province is not negotiating cheques that have been submitted. As a specific example, an Application for “Probate” at one time was processed within a reasonable four to six weeks within Peel Region.

That has now climbed to generally exceeding six months. Our office has submitted the appropriate documentation and the government’s estate tax in excess of $9,000.00. Again due to the lack of sufficient staff, the Application has not even been looked at and the cheque has not be negotiated. What business would sit on income of $9,000.00 from a single file without negotiating that cheque? Indeed this has come to my specific attention as our accounting department has pointed out that the cheque is now likely stale dated. The Government is losing vast amounts of money unnecessarily.

I repeat, determine what the true cost is and charge it. At the very least this is a transaction that should be a neutral expenditure.

One must also consider the ripple effect upon the economy. People need to wait hours to file documents, which is a great financial burden to the economy. Similarly, various financial transactions such as selling a home cannot take place until the courts are able to attend to what is often a routine transaction. Again, the Government is losing its land transfer tax that would obviously be earned as a result of such a real estate transaction.

I urge the Government to take a businesslike approach to this problem. If the Province indeed is open for business, then let it at least apply this principle to its own house.

What to do when the bad son will not Move out after mom dies

Date: 17 Oct, 2018

We now look at Justice Spiescomments in the 2017 decision relating to the Filippelli estate. In this case, one child lived with mom for two years prior to her death. There was a very loose and rarely observed understanding that the son living with the mother would pay some type of rent. The son rarely did and after mother’s death, continued to live in the family home rent free.

The son remaining in the home was not one of the executors and refused to leave.

The executors then asked the court for an Order for vacant possession and also to require the son in the home to pay occupation rent. The son in the home tried a tactic that everyone was in front of the wrong court and rather that this was a residential tenancy matter akin to a landlord and tenant relationship.

The court did not buy it and ordered that the hold over son move out and pay some type of rent. It is interesting to note that there actually had been four payments over a sixteen month period of $650.00 towards the mother. It is not inconceivable that the decision might have gone the other way and holding that indeed there was a landlord and tenant relationship.

Beneficiaries Gone Wild

Date: 17 Oct, 2018

Justice Spies, whose decisions have surfaced in this blog repeatedly,grappled with a group of siblings who suffered delusions as they fought over a $30,000.00 painting. I make no comment about the reasonableness of destroying a sibling relationship for mere money.

In the Newlands decision, the court had earlier found that one brother’s position with respect to a $30,000.00 painting was actually correct. The conclusion was the one brother was to pay the other siblings $30,000.00 and a family painting was his. That is not the point of this particular decision. Rather, it is the astounding fact that the two sides each spent approximately a quarter of a million dollars in legal fees fighting over the rights surrounding the painting.

What was crucial in deciding that the two brothers that failed to recognize at an early stage that their sibling was indeed entitled to purchase the painting for $30,000.00 had caused the parties to waste a combined $500,000.00 for no good financial reason though I am certain emotional and family history played a very large role in the parties’ motivation. When the successful brother asked the court to order costs, the judge carefully looked at all the circumstances. Most importantly the successful brother had made an early offer to settle which in the end reflected almost exactly what the court had done. The court ordered the unsuccessful siblings, out of their own pockets to reimburse almost all of the $250,000.00 spent by the successful brother. Justice Spies held:

“In my view, not ordering them to fully reimburse the successful brother for his legal costs would bring the administration of justice into disrepute.”

Some time ago, the norm was that the estate itself would bear the costs rather than the parties personally but the court has a discretion to order that the parties themselves be personally responsible. In another decision, Tarantino v Galvano, the court looked at the same type of factors and especially the lack of proportionality in deciding that costs should be borne by the contesting parties personally rather than the estate.

Negotiation of chattels and fixtures: Are they included or not?

Date: 14 Sep, 2015

Thumbnail-LogoWhen you walk into a new home, you are not just looking at the colour of paint or choice of flooring. The furniture, mirrors, light fixtures, and appliances, all play into the aesthetics and feel of a home and may be one reason you buy a specific home over another. You might like the upgraded appliances or the rustic pantry in the kitchen. One thing to consider though is whether the furniture, appliances and fixtures you see come with the house or whether they are “extra”. Each residential Agreement of Purchase and Sale in Ontario contains a chattels and fixtures clause. When you go to look a new home you must determine, with the use of experienced realtors, whether an item is considered a chattel or fixture, and whether such is included with the purchase price or excluded.

In Ontario, all fixtures are deemed to remain with the property unless the seller excludes them. A vendor can take a chattel with them unless they include them in the agreement. It can be confusing to differentiate. A good rule of thumb is to ask whether the item is attached to a wall or space or can it be easily removed, almost temporary. If it only attached by a plug or a hook such as a mirror or picture, it would likely fall under chattel but if it is built in or requires tools to remove it, it likely falls under the category of fixture.

If you are a vendor, even if the answer seems obvious, clarify with your agent if there is something you want to keep to ensure that it is clearly written in the agreement. If you are a purchaser, do not assume that all you see will be yours and ensure your agent understands your needs. It is better to be overly cautious than move in on closing to discovery missing items you thought would be there. The more detail listed in the agreement the better. The parties are best to record by make and model the chattels to remain and what are to be excluded. Often, a good realtor can negotiate what fixtures and chattels are included or excluded in an agreement.

Specific attention should be paid to the hot water tank, furnace, alarm system or other equipment as these may be subject to rental contracts or leases. Your offer should clearly state whether or not the furnace and/or other equipment is being included in the purchase price. If you are a vendor, and if the furnace/a/c/equipment is being financed, you may be surprised to learn that you have to pay the entire balance off before closing. A warranty is made by the vendor that all included chattels are being transferred “free and clear of all encumbrances”, thus all the equipment being transferred has to be fully paid off.

In summary, diligence and detail is key to ensure all parties understand what they are buying, and what they are selling to avoid any disappointment, cost or large out of pocket payouts before closing.

By Shana Dale

Estate Administration Form – NEW FORM

Date: 01 Sep, 2015

Thumbnail-LogoCompleting and filing this form is a new bureaucratic step. All involved, including the Provincial Government administering it, are cutting their teeth on the process as it evolves. One of our clients contacted the information line and asked what value they should input for the real estate owned by the deceased at the date of death. The erroneous answer that they received was whatever the MPAC valuation was. This is wrong. The MPAC valuation is often below the market value. While this may save the estate 1.5% in the estate administration tax, it leaves the estate open to much more in capital gains. Remember that while the deceased up until the date of death was able to enjoy a principal residence capital gain exemption, no such exemption exists for an estate namely from the date of death up until the date of the sale of the home.

As an example, in todays over inflated real estate market, it is not impossible for a property to increase by $50,000.00 in value from the date of death to the date of sale. All of that appreciation would be a capital gains, taxed at the highest market rate, roughly speaking $12,500.00 in tax. For further details on this point, you need to consult with the estate’s accountant, but be alive to the conflict between what is in the estate’s best interest by saving a 1.5% tax rate versus an effective 25% marginal tax for capital gains.

Wills and Estates – Cancelling a Will for Racism

Date: 16 Apr, 2015

Thumbnail-LogoJustice Cory Gilmore of the Ontario Superior Court recently made a decision overturning a Will that she found had been motivated for racist reasons.  In the decision of Spence v. BMO Trust Company, Justice Gilmore found that the testator (person who made the Will) had left nothing to one of his daughters because she had had a child with a man who was of a different race.

Available for the Judge, which was not by way of Affidavit evidence and which was not contradicted  in any way, was the reason for the testator exclusion of his daughter of whom he had been long been estranged from.

The Will on its face contained no such racist language.  The established law which this decision runs contrary to, is that one is not supposed to look outside the four corners of the written Will itself, and not to look at the testator’s motives or state of mind (aside from competency) when drafting their Will.

In other words, no one would complain about Justice Gilmore’s decision had the Will stated the racist reasons within it.

The estate legal community is in a tizzy over this decision in which the Judge in essence found the Will to be void and simply divided up the estate amongst the testator’s two surviving children in accordance with the terms of the Secession Law Reform Act.

It will take some time to see whether or not the decision of Spence v. BMO Trust Company is the leading edge of judicial intervention in changing Wills that perhaps they should not.

There is a legal maximum that hard facts make bad law, but this very well be an example of that.

Stay tuned as we watch to see if this is an anomaly or a trend setter.

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