Deed of Gift – A Gift at a Discount – or Partial Payment

deed of gift
Date: 09 Mar, 2023

Elsewhere we have discussed Deeds of Gift. I direct our loyal readers to the blog titled “Start with no one gets anything for nothing…”.

One of the main purposes of a deed of gift is rock solid proof that indeed a gift was intended, and also to take advantage of various provisions of the Family Law Act.  Specifically, to the degree possible by the donor to protect the recipient from any claims by an ex-spouse. This is not perfect, but it is the best that the donor can do.

To give a simple example, if a parent wishes to gift $100,000 to a child, one of the best ways of protecting that money from a claim by an ex spouse is for it to be held solely in the name of the child, not used to buy or improve a matrimonial home and the child has evidence that indeed a gift was intended.

However, there are tax ramifications to deeds of gift and one must be very careful to appreciate them. Advice by a competent accountant would be very helpful in this situation.

An example of a scary pitfall is when a parent wants to gift a property at a discount to a child. As an example, selling/gifting a $1,000,000 rental property for $400,000. If the agreement called for that type of payment, a sinister tax circumstance would arise. Namely, the government would take double its pound of flesh. The government would ignore the actual price paid and simply deem that the rental property had been sold for its true market value namely $1,000,000.  If not a principal residence, this would be a taxable disposition.

The child in turn would not be able to use an adjusted cost base of $1,000,000, but rather only the $400,000 that was paid. A parent simply applying a nominal price of one dollar would be even more horrendous.

On the other hand, if the transfer is a clean and simple gift, there is a deemed disposition at fair market value. The recipient will have a cost base of fair market value resulting in no double taxation. One option is simply gifting a certain amount of money to the child and let the child use the funds received to buy the property from the parent at its real market value.

Simply put, no discounts in a Deed of Gift.  There are work arounds, but they must be discussed with your accountant and Estate lawyer.

These are all important estate planning concerns and must be kept in mind when thinking about gifting real estate or indeed any capital property to family members.

Surrogate Will Signing Or How Does Someone Who Is Paralyzed Sign A Will – Part 3

Surrogate Will Signing 3
Date: 20 Feb, 2023

Substantial Compliance – Fixing a Defective Will After Death

Part 3

In the first 2 parts of this commentary on the Meyer case ( Part 1 and Part 2 ) which primarily discusses a surrogate signing a will, we saw how a “Probate” application failed.  However when one looks at the case from a present day view point there is a further twist.  As of January 1, 2022 ( 11 years after the Meyer case ) the law was changed on the formality of wills.

In this author’s view it became foolishly a game of horseshoes.  A very expensive game of horseshoes.  Referred to in the legal world as substantial compliance, the author refers to it as “close enough”.  The Succession Law Reform Act (the primary but certainly not the only law governing wills ) at section 21.1(1) in essence states – If you can convince a judge that the document – which does not meet the requirements of the simple formalities for a will set out in the Act – and really they are not numerous – but can show that the defective document is what the Testator wanted his or her will to say – the judge can order that the document is a valid will.  There are no Ontario decisions on the subject yet.  But would the Will questionnaire completed by Mr. Meyer meet the new test?  Of course Meyer was decided in 2011 and the law was changed 11 years later.

So in conclusion, there is a ready methodology of meeting the problem of physical limitations. However, the drafting lawyer needs to be careful to ensure that there is evidence, and that all the other factors set out in The Succession Law Reform Act are met. This is not a step to be taken by someone without a great deal of experience in the law of Wills and Estates.

Surrogate Will Signing Or How Does Someone Who Is Paralyzed Sign A Will – Part 2

Surrogate Will Signing 2.
Date: 20 Feb, 2023

A Promise to Make a Gift

Part 2

In Part 1 of this blog we looked at the Meyer case and examined getting someone else to sign the will on behalf of a disabled Testator.  It was part of an application for “Probate” that failed.

And what of the written promise to transfer the house to the former girlfriend? That unfortunately failed as there was no consideration for the promise.

Consideration, is a very basic concept of a binding agreement. I give you X and in return you give me Y. It matters not whether or not X and Y are of equal value, there simply must be an exchange. There was no exchange in the written promise. Further, for there to be a valid gift which we discuss in other blog articles, titled “Gift Gone Wrong” , one needs to be numerous factors, including delivery. There is no gift until the object is actually transferred.

In this 21 page decision, one cannot help but feel empathy for the former girlfriend, who had been strung along by her former partner.  From a distance, it was obvious that Clark Meyer’s repeated promises and excuses showed that he had no intention of ever fulfilling the promise. That was obvious to Justice Sosna and played an important part in the decision he reached.

Surrogate Will Signing Or How Does Someone Who Is Paralyzed Sign A Will – Part 1

Date: 20 Feb, 2023

Part 1

The Succession Law Reform Act, section 4 (1) (a) sets out one of the basic requirements of a valid Will, specifically  “…a Will is not valid unless it is signed by the testator or by some other person in his or her presence and by his or her direction;”.

Testator is the formal name of the person making a will.

It is not unusual for our office to be asked near the end of someone’s life to prepare a will for them while they still have the mental capacity to make a Will, but they have lost the use of their hands. Numerous neurological and muscular diseases can render one physically incapable of signing their name or even making a mark yet still leaving them with the mental capacity to instruct and meet one of the tests for a valid Will. In this author’s practice, this scenario has arisen more frequently than one would have thought.

This situation has rarely been reviewed by the courts and on a single occasion in Ontario. In the 2011 Ontario Superior Court decision in The Estate of Clark Ross Meyer, the Honorable Mr. Justice Alexander Sosna, within three years of becoming a judge, had to rule upon a near soap opera like fact situation.

The former common law spouse of the late Clark Meyer had been promised repeatedly that a house owned by her former paramour would be transferred into her name. The relationship only lasted a few years and then Mr. Meyer moved on, subsequently marrying the woman that became his widow, Mrs. Sylvia Meyer.  The former girlfriend was trying to “probate” the contested will signed by Mr. Meyer.

Clark Meyer not only promised a house to his former girlfriend, but he even entered into a rental amending agreement in which he again made the same promise.

The former girlfriend was strung along literally for years by promises and excuses from Mr. Clark Meyer. Mr. Meyer contracted AIDS and was soon close to leaving this earth. At his request arrangements were made for a lawyer to attend at the bedside of Mr. Meyer where he was to sign a Will in which he left to his former girlfriend the house that he had promised numerous times.  He completed a will questionnaire at the lawyer’s request.

Mr. Meyer was too ill to physically sign the Will and it was signed on his behalf, and supposedly at his direction by a neighbour of Clark Meyer acting as his surrogate.

The case is almost voyeuristic in its description of the life of the late Clark Meyer.  As is not uncommon in the law, bad facts make for bad law.

There is no specific or magic wording to place at the end of a Will when it is signed by one’s surrogate. However in Meyer v. Meyer, Justice Alexander Sosna emphasizes the importance of formalizing by way of an Affidavit by the surrogate and by any other means possible that all of the factors called for in The Succession Law Reform Act are met.   How was the direction given by the testator to the neighbour to sign on his behalf? What evidence is there that that direction was communicated, in other words how did the neighbour know that the testator wanted the Will signed? How did the surrogate and indeed all of the parties involved, including the lawyer that drafted the Will know that the testator met the legal and mental test for a valid Will? What evidence was there that the testator understood what he was doing and the meaning of the effect of the document?  Did the testator have the requisite mental capacity to make a Will at that time?

The facts are complicated and morally difficult.  They revolve not only around the issue of the adequacy of surrogate signing, but also on the enforceability of the written promise to transfer the house to the former girlfriend.

Justice Sosna had to play the tough guy.  He felt that Clark Meyer’s mental and physical capacity had deteriorated to such a degree by the time the Will was signed by the surrogate, that Clark lacked the appropriate mental capacity. Justice Sosna also criticized the almost total lack of any evidence that the testator Mr. Clark Meyer knew in the fullest sense what he was doing and what he was supposedly directing the surrogate to sign.

I tip my hat to the drafting lawyer for coming up with a scheme to supposedly give direction and instruction from the testator to one of the witnesses to the Will. The lawyer instructed Mr. Myers’s mother, who was also present at the will signing to hold Mr. Myers’s hand.  The lawyer told Mr. Meyer to squeeze his mother’s hand if he approved of each provision in the Will as the lawyer read those terms out.  However, for some reason the former girlfriend failed to call the testator’s mother to give any evidence and there was no evidence from her that she actually established any means of communication with her son. Further, the lawyer, the former girlfriend and indeed the wife, all of whom were present at this bizarre death bed scene, gave no evidence on the point of whether or not the mother’s hand was even being squeezed by Mr. Meyer.

It is for another day and another fact situation to determine whether or not the hand squeezing process would have been sufficient.

Will Is To Be Interpreted As If Written Day Of Will Maker Death

Date: 20 Oct, 2022

It makes common sense that a Will only applies to the net assets owned by the Will Maker, aka the testator, that he or she had on the date of their death.

However, it is not unusual for even experienced Wills and Estates lawyer to ignore the effect of the Succession Law Reform Act section 22.  It is a relatively brief section and we set it out in its entirety.

Will to speak from death

22 Except when a contrary intention appears by the will, a will speaks and takes effect as if it had been made immediately before the death of the testator with respect to,

(a)  the property of the testator; and

(b)  the right, chose in action, equitable estate or interest, right to insurance proceeds or compensation, or mortgage, charge or other security interest of the testator under subsection 20 (2).  R.S.O. 1990, c. S.26, s. 22.

Unless the Will strongly points to being interpreted as of the date of writing rather than the date of death, almost all provisions of a Will are interpreted as if the Will was written the day the Will Maker died.

This lens can have an interesting effect and this was clearly shown in the Ontario case that found its way all the way to the Court of Appeal titled Van Sickle Estate v. Van Sickle.

The Will was written in 1985 when the Will Maker along with her husband owned a fully operating farm. One of the children worked far harder than his siblings in working the farm. However over time, the farm was converted into a rental property whereby it was rented out for others to farm. The son who had devoted, it appears the majority of his life in assisting his parents in operating the farm, was granted an option to purchase the farm at a far lower than market value price.

The plain reading of the Will seemed to grant that option only if it was an ongoing farming operation, rather than the situation that existed as of the date of death.

At the trial level, the judge used the common sense interpretation of the appropriate clause within the Will.

However in 2022, the Ontario Court of Appeal brought everyone back to the actual law, namely the above quoted section of the Succession Law Reform Act. If one interpreted the Will as if it was written the day before death, the farm still met the definition contained within the four corners of the Will and as such the trial decision was overturned.

Section 22 is important and when a Will is being drafted, one needs to take a close look at what may occur with the passage of time.

A careful lawyer will generally object to specific bequests (gifts) of assets to specific people as one never knows what assets one will own on the date of your death.

Conversely, if the Will Maker insists on leaving specific assets to specific people, one needs to spend some time looking at all the possibilities before drafting a Will.

A great deal of time and money was spent on the Van Sickle case, which could easily have been avoided had a hypothetical question been put to the Will Maker at the time of that the Will was written.

Rectification B.C. Style – Part 2

Date: 02 Sep, 2022

Part 2

In part 1 we began our exploration of the law of rectification British Columbia style as set out in the case of Simpson v. Zaste. Part 1 Rectification B.C. Style

The court was of the view that the Will failed to accurately reflect what the will maker husband’s true intention was. There had obviously been a desire by the husband, and as was confirmed in the drafting lawyer’s notes, to leave the shares of his company to his children. At the very least, the children should have received the value of those shares, but subject to the terms of the shareholder’s agreement. Part of that shareholder’s agreement called for life insurance.

This was an appeal from a trial decision which the Court of Appeal felt was overly generous to the children.

To quote the British Columbia Court of Appeal, “to restate the general principles of rectification within the context of WESA rectification aligns the Will with what the Will maker intended to and not what with the benefit of hindsight the Will maker should have intended to do.” The court relied upon the 2016 Supreme Court of Canada’s decision in Canada Attorney General v. Fairmount Hotel.

To meet the terms of rectification, the court required evidence. As stated in the Supreme Court of Canada in Fairmount, that evidence needs to exhibit a high degree of clarity, persuasiveness and cogency before substituting the terms of a written instrument with those said to form the party’s true if only orally expressed intended course of action”. In simple English, if you want the court the fix the Will, the evidence that you need to put before it must be very persuasive, clear and cogent. It is not a subject for speculation.

The appeal court looking at all the facts felt that it was clear that common sense would suggest that the husband never intended to give the net value of his shares to his children and that his true intentions can be gleaned from looking at not only the drafted lawyer’s notes, but the shareholder’s agreement.

It is interesting that this British Columbia Court of Appeal decision specifically pointed out that the Ontario decision in Robinson did not enjoy the provisions of section 59 of WESA. There is no ability as is permitted under WESA for affidavits to be filed expressing what indeed was the intention of the Will maker.

This author would not be surprised if the law in Ontario eventually was expanded to include all of the provisions of the rectification provisions set out in WESA. However, the differences are not that great, and it is important for all to remember that rectification, in other words, a limited ability to fix a mistake made in a Will does exist.

Rectification B.C. Style – Part 1

Date: 02 Sep, 2022

Part 1

One would think a Will is a Will and that we are all bound to follow just the words found in the Will itself.

However, the legal system is more flexible than that and in limited circumstances can fix or rectify a Will that does not address obvious drafting problems.

In the 2022 decision of the Court of Appeal for British Columbia in Simpson v. Zaste, the court in a long and exhaustive decision reviewed the law and facts.

One must be careful in that the law of British Columbia with respect to rectification is not identical to that of Ontario. However, British Columbia is a frequent leading source of the law of Wills. As we saw in 2021, as a result of covid, a number of B.C. provisions were enacted in Ontario.

British Columbia enjoys the Wills, Estates and Succession Act “WESA” which contains many provisions for which there is no Ontario equivalent. However at section 59 of WESA, we find much but not all of the current judge made law on rectification in Ontario. Specifically, WESA holds on an application for rectification of a Will…the court may order that the Will be rectified if the court determines that the Will fails to carry out the Will maker’s intentions because of:

  1. An error arising from accidental slip or admission;
  2. A misunderstanding of the Will maker’s instructions; or
  3. A failure to carry out the Will maker’s instructions.

However the law in British Columbia is the same as Ontario in many respects. WESA does not permit rectification of an error stemming from the Will maker’s lack of appreciation of the legal effect of the terms in the Will. There is a difference between that and an omission in expressing the Will maker’s intention. In other words, if the Will maker turns their attention to an issue, but screwed up and did not appreciate the legal effect of what they were saying, that is an error beyond the court’s ability to correct. EXOTIC ATTACKS ON WILL VALIDITY THE USUAL vs THE UNUSUAL

It is in the Ontario Robinson Estate v. Robinson case, that the court felt that it could not fix an error when the provisions of the Will had been clearly and carefully reviewed by the Will maker. That is not the court’s authority.

Simpson v. Zaste featured the frequently occurring conflict between the children of a first marriage and the second wife. It is unnecessary to review the facts that led to this lengthy decision aside from a general comment. The husband and wife attempted to leave everything to each other in their mirror Wills with the exception that the husband wished to leave his 50% of the shares in his company to his children and his children alone. The difficulty was that the husband was bound by the terms of a shareholders agreement and strictly following the terms of the Will meant that the children would have received nothing.

To be continued and see part 2 of our case comment and blog. Part 2 Rectification B.C. Style


Date: 24 Aug, 2022

Almost every Will written in Ontario, and indeed in most jurisdictions, begins with the phrase or something close to it “I hereby revoke all Wills and testamentary dispositions of every nature and kind whatsoever made by me before”.

To the average person this simply means that any previous Will you made is canceled and replaced with your new will.  However, a testamentary disposition is far wider than a Will.  It speaks of what is to occur with respect to any asset upon one’s death. Think about that. That includes insurance policies, beneficiary designations in RRSPs and potentially placing a property in joint tenancy with right of survivorship.

The average person would think that the only way to change a beneficiary designation in a RRSP or life insurance policy would be by changing that beneficiary designation at the very institution where the insurance policy or RRSP was held. That is not the case. The Ontario Succession Law Reform Act sections 51 and 52, permit beneficiary designations and indeed changes and revocations to be made in one’s Will.

One must be very careful.  Generally in the Wills that we draft they contain a provision whereby their spouses are often named as their beneficiary of assets such as RRSP or TFSA.

When the “Full Monty” process is undertaken, this is not the case and we carefully must ensure that there is a consistent approach.  For information about the Full Monty simply use that search term on our website.

So what is the law in Ontario and indeed across Canada when we have a standard Will with a revocation/cancelling clause at the start of one’s Will when there is a prior beneficiary designation for registered assets such as an RRSP or TFSA?

In the 2021 decision by the Honourable Madame Justice Catriona Verner of Alger v. Crumb, a decision of the Ontario Superior Court of Justice, this very question was debated.

It is interesting to note that Justice Catriona Verner had only been sitting on the bench approximately a year when she released her decision.  Justice Verner came to the court with a very serious criminal law background, but not one in civil law and certainly not Wills and Estates. Nonetheless, her legal intellect was brought to bear in this decision and the author heartily agrees with the decision that she reached.

Alger v. Crump is a case dealing with a small estate. But the fact situation is almost universal and as such is an important decision. It reviews the law as this issue has come up a number of times across Canada. If your Will says I revoke my earlier testamentary dispositions, and a beneficiary designation of an RRSP is a testamentary designation, does that mean it’s canceled, does that mean the RRSP now forms part of the estate?

In this decision, Justice Verner had before her a number of decisions holding different positions across the country. She had the decision of Justice McIssac in McNaughton Automotive v. The Co-operators General Insurance.  We discussed in another blog article how that decision was clearly wrong. WHAT HAPPENS WHEN A JUDGE IS WRONG?

Justice Verner closely looked at sections 51 and 52 the Succession Law Reform Act. She also looked at the Ontario Court of Appeal decision in LaCzova Estate v. Madonna House.

The law as concluded by Justice Verner is that it is not enough to make a general sweeping statement revoking all testamentary dispositions.  To meet the provisions of the Succession Law Reform Act, the specific asset such as a RRSP, life insurance policy, RIF or a TFSA must not only be specifically referred to, but also the beneficiary designation that is now being changed must also be stated. Failure to do so means a general statement found at the opening of every Will has no effect.

Common sense, good law.

One must be very careful and appreciate the effect of standard clauses contained in Wills across the land. In Nova Scotia, there is no equivalent to sections 51 and 52 of the Succession Law Reform Act. Accordingly in Nova Scotia, such a general opening phrase will cancel an earlier beneficiary designation.

Quite frankly this demonstrates, that using a Will kit or having a Will prepared by a lawyer that does not specialize in Wills and Estates can be an example of playing with fire.

Can a Power of Attorney be used for entering into a Trust Agreement including the Fully Monty Pt 2

dale (2)
Date: 21 Jun, 2022

In another blog article we reviewed the unhappy fact situation set out in the Selkirk case

The court examined the law on whether or not individuals using a Power of Attorney can enter into a Trust Agreement on behalf of the donor of the Power of Attorney. There were three competing decisions across Canada. However, the theme of those three decisions is exactly in accordance with our firm’s own practice. An attorney can only do those things that are in strict accordance with the terms of an existing Will and as such are not creating a testamentary document, (usually a will).  In plain English, you cannot use a Power of Attorney to write a person’s Will. This is both prohibited under the common law i.e. judge-made law and under the provisions of The Substitute Decisions Act.

But you can create a Trust such as the ones we commonly do under the Full Monty using the Power of Attorney if it is completely in accordance with the Terms of an existing will.  You can facilitate the terms of the will, but you cannot change its terms or effect.


Date: 17 Jun, 2022

At our law firm we have devoted a fair amount of time to perfecting our strategy to avoid or eliminate probate. We have called that strategy the “Full Monty” and it is explained elsewhere on this website.

Learn More : A Strategy To Reduce Or Eliminate Probate Fees – Fully Monty

Learn More : The Full Monty

In the May 2, 2022 decision of Madame Justice Sally Gomery of the Ontario Superior Court of Justice she explored this issue.

Sheila Selkirk died and left behind a set of dysfunctional children. What should have been resolved over a cup of coffee instead became a long winding road of disharmony, distrust and division.

Some interesting and novel legal arguments were made, but quite frankly from this observer’s perspective, the position being taken by the unhappy beneficiary siblings was a loser from the very start.

However, the case does stand for the proposition that properly appointed attorneys under a Power of Attorney for property can enter into a trust declaration for property owned by a mentally incompetent donor. That is more fully explored in our Blog titled  – Can a Power of Attorney be used for entering into a Trust agreement including the Fully Monty.  That is more fully explored in our Blog titled – Can a Power of Attorney be used for entering into a Trust agreement including the Fully Monty

Let’s break this down into a concrete example such as in Selkirk so that one can understand this legal mumbo-jumbo. We have a widow who owns a house and she has a number of children. She already has a Will in which while she largely divides her estate equally amongst her children, but she wants a loan made to one of the children to be repaid before they get their share. The mother told a few of her children that she wanted to avoid probate and its expenses.  However the mother lost her mental capacity shortly before she died and was not able to sign anything.

The brothers went to see their lawyer who prepared a Trust Agreement. The Trust Agreement unfortunately was far briefer and less detailed than the document that our office prepares. The Trust Agreement simply indicated that two children were to be added as joint tenant owners of the home in addition to the ailing mother. The brothers using the Power of Attorney granted to them signed on behalf of their ailing mother. The trust declaration simply indicated that their mother remained the sole beneficial owner, but did not say what was to happen upon her death.

The unhappy beneficiaries after mom died tried to argue that she had explained and promised to all that when she died she wanted her house sold and the net proceeds simply divided equally amongst all of the children.

This argument was doomed to fail from the begin.  Nothing was in writing, the Will was not changed nor could the mother’s existing Will have been changed at this stage of her life.

The case is littered with terrible cross allegations between the siblings of theft and other misdeeds and one cannot but help be saddened and shake their head over a family torn apart over a modest amount of money. The house in question upon sale only realized $326,000.  Divided among six people, this is hardly life-changing. On the other hand, it does provide an interesting factual backdrop, but at what emotional expense.