HOLOGRAPHIC WILLS AND HANDWRITTEN WILLS

HOLOGRAPHIC WILLS
Date: 16 Dec, 2021

Not infrequently, we are asked what is wrong with simply downloading from the internet or using a form that someone has purchased at a stationery store. What is wrong with simply doing a Will yourself by writing out your wishes on a piece of paper? The problems are many and it usually boils down to an individual being penny-wise and pound-foolish. The cost of doing a basic Will in our office, including Powers of Attorney, barely covers our own costs in preparing the documents.

There is a provision whereby a person can create their own holographic Will. A holographic Will simply means it is a document that is entirely in the handwriting of the willmaker on a completely blank sheet of paper, with no other writing or printing upon it and simply signed by the author. There is no need for witnesses and indeed there is no formal obligation for a date even.  The question then becomes whether the document in question written by the willmaker does indeed meet the test of being a holographic Will. It would clearly help if the document began by saying this is my last Will, but more often than not even that formality is not reflected nor is it required.

In no way do we recommend holographic Wills, although sometimes in an end-of-life situation, we may guide our clients when there is absolutely no alternative.

The clear risk in using either Will kits or preparing your own holographic Will is that if you make a mistake, the few dollars that you saved in legal fees, will be wildly exceeded by lawyer’s bills incurred trying to interpret what you have done.

In another blog article, we talked about The Sweeping Changes coming effective January 1st, 2022 in which strict compliance is removed from being the law in Ontario and placing it in line with basically the balance of Canada. Ontario will also have a substantial compliance regime.

The test will simply be whether or not the court believes that a document that does not meet all of the required formalities is indeed a reflection of the deceased’s fixed and final expression of his or her intention regarding the disposal of their property upon death.

What will be different as of January 1st, 2022 is the substantial compliance rules intersecting with the long-standing test as to whether not the words of a willmaker and in this case a holographic Will meet the requirements that have now been loosened. Examples have been given of scribbled post-it notes, or crumpled pieces of paper with instructions noted on them.

The author has been involved in an estate in which a handwritten note signed by the willmaker and posted on her refrigerator, filled with spelling errors was determined to be a holographic Will. As a financial lesson, the assets of the willmaker were less than $20,000 and legal fees of $10,000 were necessary to formally prove the document as being a Will. I acknowledge and point to the excellent paper written by Clare Burns McNiven and Dana Chriszenfeld titled Strict Construction of Wills in the Testator’s Handwriting, which was part of the 2021 Estates and Trust Summit. Their paper is a learned and exhaustive summary of the laws across Canada that will likely be the foundation of the law evolving in the Province of Ontario on this new and thorny field.

 

I repeat. Substantial compliance laws are well intentioned but may simply create a mess for the benefit of lawyers

Changes To The Law Of Wills

changes to the law of wills
Date: 09 Dec, 2021

In our blog article titledRevolutionary Changes in the Laws Regarding Wills in Ontario – Part 2, How to Fix a Will After Death, we already touched upon the dramatic changes that are coming to the law of Wills as of January 1st, 2022. More changes are coming as of that date than have been made in the last 50 years. One major change is bringing Ontario in line with the majority of Canadian provinces. If a person dies after January 1st, 2022, irrespective of the date of the Will, the court will have the ability to fix mistakes made within that Will.

The intention is to ensure that a person’s last Will is not defeated by a clerical or unintentional error. Section 21.1 of the Accelerating Access to Justice Act reads as follows (abridged)  “if the court is satisfied that a document was not properly signed or made in accordance with the Succession Law Reform Act, but it sets out the testamentary intentions of the deceased or the intention of the deceased to cancel, change or to revive a will of the deceased, the court may order that the document is valid and fully effective as if it had been properly signed or made”.

Simply put, if a judge is convinced that the document really is a will but is missing some technical or minor point, the judge may fix it after the death of the Testator aka the Willmaker.

The Act specifically excludes electronic Wills and insists upon what is referred to as “wet signatures”. In other words, a digital signature or one made online is simply not valid.

This is law in almost every Province across the country, and they can all be summarized under one phrase which is “that the document in question demonstrates the deceased’s deliberate and final testamentary intentions”. This question puts in sharp contrast the difference between a person’s last wishes and their intention to actually create a Will.   Not everything that a person says or writes is actually an intention to create a Will. There are many cases across the country holding that it is possible to communicate your final intention without intending to make that statement to be the equivalent of a Will.  No doubt this will open a gigantic area of more litigation and court discretion, which will need a great deal of judicial fleshing out. I tip my hat to the authors of the learned article in the 2021 24th Estates and Trusts Summary Summit, co-authored by Anne Posno and Mari Golloway in which they summarize the law of substantial compliance with the formalities of Will creation across the country.

We may regret these flood gates being opened.   How hard is it to just meet the simple formalities of the SLRA?  If you use a lawyer, who is likely losing money preparing the will, and he or she screws up, they have insurance.  Are we not encouraging people to try their hand at doing a will themselves and incurring insane legal fees to determine if their scribblings are or are not a will?   Be assured, no lawyer will do that work for free or at a loss.

WHY YOU SHOULD NOT DEPOSIT YOUR WILL BEFORE DEATH WITH THE COURT

WHY YOU SHOULD NOT DEPOSIT YOUR WILL BEFORE DEATH WITH THE COURT
Date: 21 Oct, 2021

Pursuant to Section 2 of the Estates Act, the office of the local Registrar of the Superior Court of Justice is a place where you may deposit your Will for safekeeping. Rule 74.0 of the Rules of Civil Procedure provides further details of the process by which a Will may be deposited and held by the court. The good news is that the Registrar holds these Wills for a 125 years or more.  So short of having a biblical lifespan, one’s original Will will indeed be available.

However for reasons, we will now discuss, it is not a process that our office recommends. It makes changing a Will much more difficult and it is a relatively laborious task to retrieve the Will from the court in contrast to storing it with the lawyer that drafted that Will. The Court’s filing and storage process is incredibly archaic and no notation is made of the date of birth or any other specific identifiers for an individual who has a relatively common name. The only person that can deposit the Will with the court is by and large the testator i.e. the willmaker or someone authorized in writing by the testator.

When one applies for probate, a request is made to the central Registry, to determine whether or not there is a Will on deposit. As long as the name is relatively similar to the name of the deceased,  the application for probate is rejected until one can prove that the deceased is different from the individual whose Will is on deposit anywhere in the province of Ontario.

Our office far prefers that you leave your Wills with our office or alternatively, store them in a safety deposit box and provide details of its location to your estate trustee. Our firm levies no fee for storage of Wills.

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 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 a 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 these magic words are found that is only the first step.  The next step is to see the date of the conversion from registry office into land titles, generally the date of the PIN creation date.  The third step is to look for any transfers or mortgages after that date effecting the land.  If such a transfer or mortgage can be found, then the first dealings exemption has been used up and probate cannot be avoided.  A transfer would include one by a personal representative, which almost always is an executor of an estate.  What does not trigger the loss is a survivorship application and usually a transmission/land.

If the description beneath 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.

EXECUTOR MUST ENSURE HOME INSURER KNOWS OF DEATH

dale
Date: 20 May, 2021

At the outset of every estate, we warn our client/executors to investigate the home insurance status of the property formerly occupied by the deceased.

Sometimes the deceased will have been the last person living in the home and it is now vacant. It is crucial that the executors in writing advise the insurers of the death of testator (the person who made the Will) and the occupation status of the home. Most home insurance policies have a vacancy exclusion clause. Namely, if no one is living in the home there is no insurance coverage.

Insurance companies generally will provide insurance coverage to an estate either in return for a higher premium or if arrangements are made for regular inspections of the property.

Not only must the notice to the insurer be made in writing, the insurer’s written confirmation of ongoing home coverage is crucial.

If you are an executor and fail to attend to this detail, you may very well be personally liable if the estate suffers any loss due to an absence of insurance.

In the recent Ontario Superior Court decision of Gregson v. CAA Insurance, the Court summarily granted judgement in favour of the insurer. In that case, the homeowner became mentally incapable and was eventually transferred into a retirement home where she died. The home had been vacant for a significant period of time and a loss was suffered due to water damage. When the deceased’s estate trustee attempted to make a claim, it was denied based upon the vacancy exclusion found within the insurance policy. This case simply brings home a long-standing rule that insurer’s first reaction upon receiving a claim is to attempt to determine whether or not there is coverage or there is a method by which they can deny such coverage.

Again, we repeat, this is an important obligation of an executor/estate trustee.

TRUST TAX RETURN NOT NEEDED as part of The Full Monty

dale
Date: 14 May, 2021

A common strategy that our firm has been recommending to our clients, is one we call the “Full Monty” which is a comprehensive approach to adding the names of trusted children to the assets of elderly testators.

In English, if one is closer to the end of their life, a facet of estate planning may involve the addition of your adult children’s names as an owner of your assets including your home or as the beneficiary of a liquid asset.

This is not as simple as simply adding the names of the children as it is fraught with many difficulties that are canvassed in other blogs.  I recommend one read our article A STRATEGY TO ELIMINATE OR REDUCE PROBATE TAX.

One example of the strategy is to add adult children as owners to the family home.  This must be accompanied by a comprehensive trust agreement, which confirms repeatedly that there is no change in beneficial ownership and that the owners remain so long as they are alive, the trust beneficiaries namely the parents.    Even upon the death of both parents, the asset, such as the home, is to be administered in accordance with the Secondary Will.

The question has arisen, is this a Trust under the Income Tax Act and as such does the Trust need to file income tax returns.

The answer lies in the Income Tax Act itself section 104(1).  So long as there is no change in beneficial ownership or disposition and the trust is simply an arrangement in which the trustees act solely as agents for all the beneficiaries, then there is no need for tax returns to be filed or income declared.

Simply put, if the formal change of ownership creates simple trustees with no rights whatsoever, in other words, mere placeholders and they are bound to act completely in accordance with the instructions of the beneficiaries then this is not a trust which is subject to income tax nor the necessity to file separate income tax returns.

REVOLUTIONARY CHANGES IN THE LAWS REGARDING WILLS IN ONTARIO – PART 3 WILLS NO LONGER REVOKED BY MARRIAGE

REVOLUTIONARY CHANGES IN THE LAWS REGARDING WILLS IN ONTARIO - PART 3
Date: 13 May, 2021

Amongst the elderly and vulnerable there is a serious problem known as predatory marriages. The common scenario is that an elderly widow or widower marries someone generally much younger while not really understanding what or why they are doing it. The motivation of the predatory spouse is that when the elderly spouse dies, often with no Will at all, the predatory spouse will have acquired a substantial interest in their late husband/wife’s estate. The mental capacity test for marriage is far far lower than the capacity required to make a Will. The new Accelerating Access to Justice Act, once it is finally proclaimed, will eliminate an existing provision of the Succession Law Reform Act. That provision now states that any Will is revoked by a subsequent marriage unless that Will contains magic words stating that this Will is made in contemplation of my marriage to…. Plainly put imagine the following common scenario. Predatory gold digger marries an elderly person whose existing will is cancelled automatically by marriage, and the gold digger gets a huge share of the elderly person’s estate upon their death. Note that this amendment will not be retroactive and only applies to deaths that occur after the proclamation of the law.