Land Titles First Dealings Probate Exemption – Part 2

dale
Date: 02 Sep, 2021

When a lawyer looks at the Province of Ontario’s Parcel Register, one can find an official record of the legal status of any parcel of land in Ontario.  Some people take advantage of other online services, but those are not legally reliable.  There is no substitute for a parcel register operated by the Province of Ontario – Service Ontario.  This is all registered under the Teranet system by which the Province of Ontario keeps track of all properties throughout the Province of Ontario.

The magic words one needs to find when looking at the parcel register to determine whether or not property qualifies for the land titles first dealings probate exemption can be found in the upper left-hand corner under the title Estate Qualifier.  If a property qualifies, one needs to see the acronym LTCQ or Land Titles Conversion Qualified.  If the description beneath the estate qualifier is Fee Simple Absolute, then the exemption has been lost and probate must be applied for.

An exotic and esoteric corner of the world that can have very significant cost consequences to our clients.  Again, justifying why one needs a qualified Wills and Estates’ lawyer to assist in the administration of an estate.

A COMMERCIAL APPROACH TO THEIR DOMESTIC ARRANGEMENTS PART 2

dale
Date: 20 Aug, 2021

The Presumption of Resulting Trust

Part 2 of 2

MY OBJECTION IS BASED ON A NUMBER OF GROUNDS

Clearly there is a moral to this story, which is if you do not want to find yourself swimming in shark infested waters, do your very best to ensure that there is something in writing and indeed as much as possible in writing to confirm who gets what in the event of a separation.  Everyone enters into a domestic arrangement based upon an expectation of permanence.  But no one is blind to the fact that this is almost as likely not to occur as succeeding.  At the very least, the lawyer acting for the two gentlemen when they bought their home should have made sure that the real estate lawyers reporting letter to them confirmed what was the intention between the two of them should they go their separate ways.  In an ideal world, a formal domestic contract should have been prepared.  It is this writers’ experience this rarely occurs at the start of a first relationship unless a parent insists upon one before they will hand over any money.  At the very least, if one is facing such a situation, speak to a lawyer who has knowledge of these matters for some guidance.  This decision is relevant both in Family Law, and Wills and Estates. In this case, we had the two men able to give their own evidence as to what their intentions and expectations were.   Imagine the dramatic increase of difficulty in proving intention when one of the parties is dead and their estate and executors are attempting to prove the presence or absence of the intention to gift.

What the court is doing is permitting the parties to be lazy and not attend to obvious difficulties at the outset of their relationship.  They should have been alerted simply by virtue of the fact that they were contributing wildly different amounts towards the price of the home.  Surely the psychiatrist, a highly educated individual should have thought as he poured over the years a half a million dollars into a property that there should have been some contract that protected him in the event that he and his partner separated. The court by permitting an after-the-fact rule of equities, such as the presumption, simply encourages litigation, uncertainty and societal difficulty.  We are referring to a 33 year relationship.  If the Court of Appeal asks that one considers the intention of the psychiatrist when he advanced the money, it is not fair to just ask is this a gift or is this a loan?  The question might very well have put to him should be….”If this relationship lasts less than 3 years is this a gift or a loan?”    What if the question is “What is your intention if this relationship lasts 33 years?”   From that perspective, the length of the relationship in this author’s humble opinion was indeed a relevant question, which was answered by the trial judge. The situation is very different if the parties were of unequal bargaining positions.  However, in this case, the party with more money and potentially more education and a greater degree of sophistication was the party who is now alleging the loss. Sorry but the courts are simply enablers of people who are not looking after their affairs.

A COMMERCIAL APPROACH TO THEIR DOMESTIC ARRANGEMENTS PART 1

dale
Date: 20 Aug, 2021

The Presumption of Resulting Trust

Part 1 of 2

There are laws floating out there that are the equivalent of silent sharks ready to devour reasonable expectations.  One of those laws is the presumption of resulting trust.  In the recent Ontario Court of Appeal decision in MacIntyre v. Winter, the court permitted the shark to devour what a 33 year common law relationship had created.  The legal concept of the presumption of resulting trust has been discussed in other blog articles and I recommend them to the reader.  This law was not made by any legislature or parliament.  It was never debated publicly before a committee.  No political party ever campaigned on its existence.  It is entirely a judge made law stretching back many years.  However, this law is alive and well in Ontario.  The law was given a blood transfusion by the 2007 Supreme Court decision in Pecor v. Pecor.  Boiled down to its simplest meaning, the presumption of resulting trust holds the following.  Equity presumes bargains, not gifts.  In other words, the starting point is you get nothing for free even if you have been in a relationship for 33 years unless you can prove that it was a gift.

In the MacIntyre case, we have two men co-habiting for 33 years.  Both had some mental health issues although one was a high functioning psychiatrist.  The psychiatrist of course had greater financial means including financial assistance from his family.  The parties bought a succession of two houses, which were registered in both of their names as joint tenants. The concept of joint tenancy produces a right of survivorship upon the death of the first.  In other words, if your co-owner dies first, the house is all yours.  The psychiatrist contributed over the course of their relationship almost $500,000.00 more than his partner towards the purchase of these two homes.  Despite the fact that there was not a drop of evidence confirming either of the opposing positions of this common law couple, the Court of Appeal reversed the trial judge’s decision and found that the presumption of resulting trust did apply.  In essence, the court held that it was necessary for the trial judge to investigate the intention of the psychiatrist when he contributed more money towards the purchase of the two homes.  Did the psychiatrist intend to make a gift of that money to his then partner by registering the property in both names?  The court held that there was no evidence, nothing in writing, nothing independent to corroborate the position taken by either of the two men and then held that the shark would be allowed to bite.  In essence, the presumption of resulting trust was found to apply.  The court held that it should begin from a starting point that this was not a gift and that it was money that should be repaid to the psychiatrist in the event of a breakdown of the relationship.  This was despite the fact that indeed it was the intention of the psychiatrist that should he die first, that his partner would become the sole owner of the entire home.  The court held that there was no difficulty in splitting these two different intents.  Intending to grant a right of survivorship was deemed to be a separate intention from what would have occurred if the parties separated.

I am certain that other commentators will not have the same adverse reaction to the applicability of the presumption to a 33-year common law relationship.  The law would be very different had these people ever formally married.  There has been much conjecture that the law in Ontario will eventually change to erase the different property of common law and formally married partners.   The title of this blog article comes from a direct quote in the decision.  The very senior Justice Nordeimer writing for the Court of Appeal held the following;  “Our courts are strewn with cases where people in a relationship wound up in litigation because they did not take a commercial approach to their domestic arrangements from the outset”.  I find that statement heavy with irony and lacking in recognition of human emotion.  What could the psychiatrist have been thinking when he injected the majority of the money towards the purchase of two homes yet registered title in both names equally.

The court citing another decision of the Ontario Court of Appeal, MacName, held that it was the responsibility of the psychiatrist’s partner to prove that it was a gift, and to do so he needed to satisfy three conditions, which are:

  1. An intention to make a gift on the part of the donor with no consideration or expectation of renumeration.
  1. An acceptance of a gift by the donee.
  1. A sufficient act for delivery or transfer of the property to complete the transaction.

The court held, that there was no evidence either way, so the presumption applies.  The psychiatrist’s partner was ordered to re-pay the psychiatrist out  the sale proceeds of the home almost $500,000.00.   See part 2 of this blog for a further analysis.

CAN ONE USE A POWER OF ATTORNEY TO CHANGE A LIFE INSURANCE BENEFICIARY DESIGNATION

CAN ONE USE A POWER OF ATTORNEY TO CHANGE A LIFE INSURANCE BENEFICIARY DESIGNATION
Date: 20 Aug, 2021

The short answer seems to be no.  Donor means the person making and giving the Power of Attorney.  Testamentary means – through one will or upon your death.   In the Ontario case of Richardson v. New, the court held that a beneficiary designation is the same thing as a testamentary disposition.  This was upheld later by the Ontario Court of Appeal.  In English, one of the few restrictions upon what an attorney can do under a Power of Attorney is that they may not make a Will for the donor.  The courts by calling a beneficiary designation, in essence, a testamentary act are saying that this is the same thing as making a Will.  Specifically, an attorney is required under the Substitute Decisions Act to act in the best interests of the donor.  Clearly changing a beneficiary designation that will only take effect after the donor’s death will have little to do with the best interests of the donor.  This is very different from where the donor does have mental capacity but does not have the physical ability to make the beneficiary change requested.  In those circumstances, someone changing a beneficiary designation is simply acting as an agent and clearly does have the authority to change a beneficiary designation under those very limited factual circumstances.

This situation was discussed in the Hanson Estate, a decision of the Ontario Superior Court of Justice which held that the Substitute Decisions Act was not involved at all and that it was simply an act by an agent and as such was perfectly acceptable.