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Posts from the ‘Estates’ Category

Deceased’s Estate Division Pits Sister and Ex-Wife Against Each Other

Deceased’s Estate Division Pits Sister and Ex-Wife Against Each Other

Here’s a slightly convoluted tale, but it’s an interesting one involving a dispute between the estranged wife and sister of a deceased man over his estate. Here is the cast of players:

1) Paul, who died in 2013.

2) His wife Pauline, from whom he separated in 2002.

3) Paul’s sister Rita, to whom he left half his estate, and who was also his Estate Trustee.

When Paul and Pauline separated, Paul agreed under their separation agreement to designate Pauline as beneficiary of a $150,000 insurance policy and keep up the premium payments. If Paul failed to maintain the insurance, it was agreed that Pauline would have “first dibs” against his estate for $150,000, in the role of a creditor.

In fact, Paul did not maintain the life insurance as agreed, and it lapsed before he died.

But there was a problem: Paul’s estate was too small to pay Pauline the $150,000 he owed, since his assets at death totaled only about $100,000.

Enter Paul’s sister Rita. As a beneficiary under his Will – and but for Pauline’s $150,000 claim – she stood to inherit 50% of Paul’s estate. In the role of Estate Trustee, she had obligations to all estate creditors, including Pauline. These duties These duties included ascertaining the debts and liabilities of Paul’s estate, and paying them. So Rita essentially wore “two hats”.

Pauline’s asserted first-dibs claim against Paul’s estate became a contentious issue, and the matter went to court for resolution. In an earlier application, the court rejected Rita’s argument that Pauline had missed the deadline for bringing her claim against Paul’s estate, which she did in 2015, more than two years after Paul’s death.

On appeal, the Court of Appeal confirmed that finding. The reason for Pauline’s delay was actually Rita’s own obfuscating conduct, and it would be unfair to hold her to that deadline in the circumstances.

As Estate Trustee, Rita had control over the information Pauline needed to ascertain whether Paul held any insurance policy for her benefit, as the separation agreement required. Pauline could not obtain the information from the insurer directly, so she was understandably beholden to Rita to provide it. Only Rita knew whether Pauline’s debt claim against the estate even existed; this put her in a unique and privileged position.

The problem was, Rita was not forthright with Pauline, and withheld the information she needed.

Initially, she had her lawyer advise (inaccurately) that Paul had maintained the life insurance, and later had the lawyer advise that the policy “may have lapsed”. Neither of these statements were true: Rita had known early on that Paul had let the life insurance lapse despite his obligations under the separation agreement, knew Pauline had a valid claim against his estate as a creditor. Yet she kept the information from Pauline and caused her to delay taking timely steps in pursuit of it.

From a legal standpoint the Appeal Court found that – wholly unrelated to their family connection – Rita and Pauline had a “special relationship”, and that Rita’s withholding of information made her guilty of fraudulent concealment, and made her conduct “unconscionable”.

The Appeal Court referred to and endorsed the findings of the application judge, who had written:

By withholding material facts, the estate trustee [the sister, Rita] concealed from [Pauline, the wife] that she had a legitimate debt against the estate as a creditor. In my view, given the special relationship between the estate trustee [Rita] and [Pauline], it was unconscionable for the estate trustee [Rita] to initially suggest that insurance was in place, then delay matters by promising to bring an application for directions, and then later take the position (a position which provided a direct material benefit to her as a beneficiary of the estate), that the time for claiming against the estate had expired.

The court accordingly found that the usual deadline for Pauline to claim for $150,000 against Paul’s estate did not expire in this case, and could proceed.

For the full text of the decision, see:

Roulston v. McKenny, 2017 ONCA 9 (CanLII)

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com

Testator’s Freedom to Make Even “Unsavoury or Distatesful” Bequests Upheld – In Some Cases

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Testator’s Freedom to Make Even “Unsavoury or Distatesful” Bequests Upheld – In Some Cases

Although my law firm focuses primarily on Family Law, we also provide legal advice and services in relation to Wills and Estates, and it’s a topic that I don’t often write about.

But perhaps I should: There is an interesting recent case from the Ontario Court of Appeal, for example, that is certainly worth looking at.

Imagine this scenario: A 71-year old man name Eric had two daughters with his first wife, whom he later divorced. After their parents’ separation, one of the daughters went to live with her mother in England; the other, named Verolin, lived with her father in Canada.

But when Eric, who was black, learned that Verolin was pregnant and that the baby’s father was a white man, it caused a permanent rift in their relationship; eventually Eric cut Verolin off entirely and never met his grandson, who is now 13 years old.

After Eric died, his Will revealed that although he had included the other daughter and her children, he had specifically excluded Verolin, ostensibly because (according to the wording in the Will itself) she had shown “no interest in [him] as her father.” However, the extrinsic evidence from witnesses told a different story: Eric had actually excluded his daughter Verolin in order to show his disapproval of the fact that her son’s father was white.

Verolin applied to the court to have the Will declared set aside and declared invalid because it was against public policy on racial grounds. Verolin was initially successful in the lower courts.
On appeal, the court reflected on the basic question of whether it was entitled to scrutinize Eric’s Will – which was unambiguous on its face – merely because a potential beneficiary like Verolin was being excluded.

In this regard the Appeal Court pointed out that a “testator’s freedom to distribute her property as she chooses is a deeply entrenched common law principle”, and that this testamentary autonomy “should not be interfered with lightly, but only in so far as the law requires.” With that said, the court added that the testator’s right can still be constrained by public policy considerations in some circumstances.

But even applying those general principles here, the fact remained that the wording on the face of Eric’s Will was not, in and of itself, legally objectionable. It adverted only to cutting off Verolin for not communicating with him; any other racially-discriminatory motives on Eric’s part were hinted at only through external evidence. Plus, even though she was his daughter, under Ontario law Verolin was not entitled to demand a share of Eric’s estate. Nor was there anything in the Will that called for the trustees or beneficiaries to act in a way that was discriminatory, unlawful, or contrary to public policy, in order to give effect to Eric’s wishes.

In ultimately upholding Eric’s Will, the Court of Appeal concluded:

I conclude that to apply the public policy doctrine to void an unconditional and unequivocal testamentary bequest in cases where, as here, a disappointed potential heir has been disinherited absolutely in favour of a different, worthy heir, would effect a material and unwarranted expansion of the public policy doctrine in estates law. Absent valid legislative provision to the contrary, or legally offensive conditional terms in the will itself, the desire to guard against a testator’s unsavoury or distasteful testamentary dispositions cannot be allowed to overtake testamentary freedom.

Do you agree with the Court’s ruling?

For the full text of the decision, see:

Spence v. BMO Trust Company, 2016 ONCA 196

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com.

Ever wonder what happens if you die without a will? – video

 

Wednesday’s Video Clip: Ever wonder what happens if you die without a will?

This LawPro video emphasizes how preparing a will can avoid a lot of headaches. As stated in the video, a surprising 65% of Canadians don’t have a will. Everyone should consider getting a lawyer to help them prepare a will if they don’t have one, or to review any will that hasn’t been updated recently.

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com.

Battle of the Ex-Spouses – Who Gets the $2.4 “Prize”?

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Battle of the Ex-Spouses – Who Gets the $2.4 “Prize”?

In a contest between two former spouses, which of them gets the deceased husband’s $2.4 estate? That was the question for the court in a recent Ontario case called Quinn v. Carrigan.

The man, Ron, had been estranged for 12 years from his first wife Melodee, with whom he had two now-adult children. They did not divorce or even enter into a formal separation agreement, but Ron promised that he would always support her. For the last 8.5 years of their separation, he had been living common law with another woman, Jennifer, who had a limited income and medical problems. At the time of his sudden death from a heart attack at age 57, Ron was the sole financial support for both women.

After Ron died, it came to light that he had left nothing in his will or pension for Jennifer; instead, he left his whole $2.4 estate to Melodee and their daughters. He also gave a 1/3 share of his $1 million pension to each of them. The title to the condo that he and Jennifer lived in together at the time of Ron’s death was actually in his and Melodee’s name.

Jennifer applied under the Ontario Dependent’s Relief Act, which allows a court to order Ron’s estate to pay her support – whether or not he left a Will – in cases where he failed to adequately provide for her financially. The court awarded her $350,000 to be paid from Ron’s estate and pension.

But after two trials, and two appeals, the true legal characterization of Jennifer’s status for claiming under the estate and pension was still uncertain. Under pension legislation, for example, the question of who was Ron’s “spouse” was unclear: at least one earlier court had found that it was Jennifer (who had been living with him in a common-law relationship at the time of Ron’s death) rather than Melodee (who was technically still married to him). A later appeal ruling had overturned that finding, concluding that the mere fact of living with Ron did not turn Jennifer into a “spouse” for pension purposes.

Returning to the dependent’s relief application (which was separate from the pension issue), the court reviewed the complex details of Ron’s estate and the various holdings, expenses and entitlements of both spouses and the adult daughters. Although Ron was certainly entitled to arrange his estate so that his first wife Melodee receive the bulk of it (and that it would eventually trickle down to his children and grandchildren), his wishes could not ignore or override Jennifer’s valid legal claims. While there was evidence that he intended to provide for Jennifer somewhat, those intentions were never implemented and in any event they would not have been enforceable unless Ron made full disclosure to her of his substantial wealth (which he did not want to do) and unless she obtained independent legal advice (which was never done).

The court explained that under that same dependent’s legislation, Melodee was still entitled to a “preferential share” of Ron’s estate; however, it was unfair to ignore Jennifer’s support entitlement, particularly since she was in poor health and impoverished. (She had returned to work shortly before Ron’s death, but had lost her job due to an economic downturn. Her health concerns also limited her employment prospects, and had no assets other than her personal belongings, and had some debts. In contrast, the first wife Melodee and the daughters were living comfortably).

Ultimately – and after some complicated analysis – the court allowed Jennifer’s appeal, and awarded her $750,000, comprised of $550,000 for her legal entitlement to spousal support (calculated using the Spousal Support Advisory Guidelines and based on Ron’s significant annual income) plus another $200,000 reflecting her “moral claim” to Ron’s estate.

For the full text of the decision, see:

Quinn v. Carrigan, [2014] O.J. No. 4589, 2014 ONSC 5682 (Div. Ct.)

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com

 

Can Dead Husband’s Kids Drag 90-Year-Old Widow’s Adult Children into Court?

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Can Dead Husband’s Kids Drag 90-Year-Old Widow’s Adult Children into Court?

In a recent Ontario case called Brash v. Zyma, the outcome hinged on certain statutory technicalities, but the question came down to this: Could the adult children of a man, who was on a second marriage at the time of his death, pull the second wife’s children into litigation, hopefully to get a court order that they must support her and thereby keep her from taking more from the Estate than the roughly $20,000 he had left her in the Will?

When they each married for a second time in 1990, Charles was 61 and Dorothy was 67. Charles had previously been married to another woman for 34 years, and had six children with her. Dorothy had four adult children of her own, and had been widowed for 15 years.

When Charles died in 2012, Dorothy was just shy of 90 years old. Her adult children were now all in their 60s. Charles left Dorothy $13,000 in his Will, plus almost $9,000 tied to the value of his home.

However as his wife and a “dependent,” Dorothy also claimed support from Charles’ estate under the provisions of the Ontario Succession Law Reform Act (SLRA). This was necessary because Dorothy was in poor health, had moved into a nursing facility even while Charles was still alive, and had assets of only $60,000 in account with one of her children. Her monthly expenses were said to exceed her income by up to $1,000 per month.

But rather than see Dorothy dip into their father’s Estate funds under the succession law provisions (which money would otherwise go to them), Charles’ own children brought an application to the court to have Dorothy’s three surviving children added to Dorothy’s court application. (Dorothy had declined to add them herself). Charles’ children did so on the basis that Dorothy’s offspring had a legal obligation under certain provisions the Ontario Family Law Act (FLA) to support their mother in light of her modest financial circumstances.

Charles’ children also claimed that given Dorothy’s age and health, she could provide for her own needs from existing resources, particular in light of what their father left her under his Will. Finally, they questioned the motives behind her SLRA dependent-support application: As the court put it, they “go on to say that this whole exercise is being managed by [Dorothy’s] children on behalf of their elderly mother and is nothing more than an effort by them to transfer a larger portion of the late [Charles’] estate from his children to them.”

The court’s jurisdiction hinged on the interpretation of these two competing statutes: the FLA and the SLRA. If Charles and Dorothy had separated before he died, the matter would be simple: Dorothy would be entitled to claim spousal support under the FLA, and under that legislation, the court would have the right to unilaterally add anyone to the litigation who possibly had an obligation to support her as well – which arguably encompassed Dorothy’s children.

As it happened, though, Charles had died, and that made Dorothy eligible for a support claim under the SLRA. She had brought her application under that legislation, which now governed. There were no equivalent provisions to those found in the FLA. Charles kids asked the court to make the same type of order, by analogy.

The court granted the order, and added Dorothy’s three remaining adult children to the litigation. Charles’ children were merely trying to draw Dorothy’s kids into the litigation because they might have an obligation to support her. The court was able to rely on the longstanding basic legal principle that the court should have all interested parties before it, in order to allow the court to properly adjudicate the matter on the merits.

For the full text of the decision, see:

Brash v. Zyma, 2014 ONSC 4066

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit our main site.

Should Deceased Mother’s New Partner Win Custody Over Kids’ Biological Father?

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Should Deceased Mother’s New Partner Win Custody Over Kids’ Biological Father?

The recent decision in Van v. Shilletto features an unusual custody contest between a biological parent on the one hand, and the new partner of now-deceased other parent, on the other.

The background facts were a little unusual, too: The parents of two children had divorced and each parent was living with a new partner. In the mother’s case, the new partner was a patron at the restaurant where she worked. In the father’s case, the “new” partner was actually his first wife – who happened to be the mother’s older sister.

(To explain: The father and mother were both from Vietnam. The father had been married before – to the mother’s older sister, whom he divorced after moving to Canada. After that divorce, the father returned to Vietnam to marry the mother, who joined him in Canada two years later. But when she arrived, she was dismayed to learn that he was back living with his first wife, i.e. the mother’s own older sister. Although the mother was not pleased, this living situation – which involved both women having separate sections of the house – apparently continued throughout their marriage until the mother moved out several years later).

In any event, when the children’s mother later died of cancer, her will stipulated that her surviving new partner was to be the guardian and have custody of the children, and that they were to spend all day each Saturday with the father as they had been doing. The children themselves were on-board with this plan, and neither of them expressed an interest in spending more time with their father than had been the case until now. In fact, at times each of the children expressed an unwillingness to see their father at all, and pronounced the Saturdays they currently spent with him to be “boring”.

Nonetheless, the father brought a court application for custody, which the new partner countered with a custody application of his own.

The court considered the situation, starting with the fact that the mother’s new partner had made considerable effort to get along with the father, had cared for the children and the mother during her battle with cancer, and had been an important and positive influence in their lives for the past few years.

In contrast, the father had shown that he was not sensitive to the children’s emotional needs: After the mother’s death, for example, he denigrated her in front of the children, calling her “mental” and a “bad woman”. He routinely made negative remarks about the new partner as well, calling him “evil” and accusing him for breaking up the marriage and “stealing” the children. This was despite the fact that the new partner had been providing love and security to the children both before and after the mother’s traumatic death.

The court observed that a child’s biological parentage is not determinative in a custody dispute; rather, it is one of several factors, including the wishes of the children themselves, which was to be given considerable weight.
In this case, it was not in the children’s best interest to be in their father’s custody. The application of the mother’s new partner was granted, with the father being given access on the same Saturdays-only schedule as before.

For the full text of the decision, see:

Van v. Shilletto, 2014 ONCJ 104 (CanLII)

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com.

Ontario Wills 101: Issues to Consider Before Meeting your Lawyer – video

Wednesday’s Video Clip: Ontario Wills 101: Issues to Consider Before Meeting your Lawyer

In Ontario, a Will is a written document that sets out the person’s wishes about how his or her estate should be taken care of and distributed after death. In this video, we look at what a will is, some of the early issues to consider for preparing a will, and what steps you should take once you have your will in place.

To learn more about child support visit our website at www.russellalexander.com or join us on Facebook at http://www.facebook.com/RussellAlexanderFamilyLawyers

 

 

What Is A Power Of Attorney?


 

Wednesday’s Video Clip: What Is A Power Of Attorney?

In Ontario, a Power of Attorney is a legal document that gives someone else the right to act on your behalf.

This video discusses the importance of a Power of Attorney and what options and decisions you should consider when deciding who should be your power of attorney.

Thinking of entering into a marriage contract or prenuptial agreement? Make sure you also consider estate planning considerations.

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Thinking of entering into a marriage contract or prenuptial agreement? Make sure you also consider estate planning considerations.

This was an issue canvassed by Donna Neff in her blog “When to Make a Marriage Agreement Part of Your Estate Planning”. Donna noted that her advices was “to have a marriage agreement or contract prepared which spells out what the husband and wife agree to do with their assets if one of them dies or if their marriage ends in separation or divorce.” Good point Donna that often gets overlooked.

You can read Donna’s full blog here.

We will be featuring Donna Neff this Friday as a part our interview series with lawyers from across Canada (and beyond).

Mother Disinherits Son for Growing Pot and Not Cleaning His Room – Should Court Intervene?

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Mother Disinherits Son for Growing Pot and Not Cleaning His Room – Should Court Intervene?

Although not strictly a family law matter, a case was heard recently involving the interesting question of whether courts can or should impose a moral obligation on parents which would prevent them from disinheriting their children in a Will.
The case in Holvenstot v. Holvenstot, which was heard by the B.C. court, concerned the validity of a Will by a woman named Patricia. Patricia had four children – three daughters and a son named Bruce – and over the years had prepared five separate Wills. The last one, which was executed about three years before she died, effectively divided her estate assets evenly amongst the three daughters but left Bruce only one cent.

Patricia’s bequest of one penny was accompanied by a 6-page, handwritten explanation, enumerating her many longstanding grievances about Bruce’s behaviour, some of which occurred when he was a teenager. Several of the complaints were trivial (such as the allegation that Bruce rarely read books or cleaned his room), while others were more serious (such as his growing marijuana on family property, which resulted in Patricia being placed on one-year probation, and his trying to have Patricia declared incompetent and committed). The court summarized Patricia’s litany of alleged complaints to include the following:

a) When he was about 17 years old, the plaintiff [Bruce] was stealing money from her.

b) At a later date, he tried to get [his sisters] Taffy and then Leslie, hooked on drugs.

c) He planted marijuana plants in her garden and lied about what it was.

d) He said that she had Parkinson’s Disease and Alzheimer’s disease (which was not true) and tried to have her declared incompetent by the court.

e) He made himself executor, tried to get her stocks and tried to get two acres of her land.

f) He allowed her house insurance and land taxes to lapse, as well as her Blue Cross and Blue Shield coverage.

g) He let Victor Valerani use her dog kennel as a shop, without requiring payment of rent or for electricity, and she had a hard time evicting Mr. Valerani from the property.

h) He kept many of her personal possessions.

i) She paid him $1,600 a month (including $400 a month for food) to care for her, but he did not feed her properly.

j) She felt that “He robbed me blind.”

k) He has been using, growing and selling marijuana since he was a teenager. He grew marijuana at two places, including at her home in Long Valley. The police seized the growing marijuana and she and Taffy were charged with “growing and possession.” She was convicted and put on probation for a year, and had to meet with her probation officer every month.

l) He continued to grow marijuana on a neighbour’s land, until she phoned him and told him that the police had found the marijuana, which was not true, but which was done to protect him.

m) “The final straw was he tried to have me declared incompetent. I went to several doctors who all said I was competent. This cost me money. It cost me $15,000 to go to a hearing in Morristown to be declared competent.”

n) “It’s clear to me that Bruce will never change. He blames everybody, never takes blame – is money mad – is cruel to his dog . . . .”

Bruce applied to the court to have his mother’s Will varied so that he would inherit some of her $320,000 estate. However, his application was unsuccessful; the court did not interfere with Patricia’s desire to disinherit him. Bruce had failed to show on the balance of probabilities that Patricia’s reasons for disinheriting him are either false or (if true) they are not “rationally connected to the act of disinheritance”.

Admittedly, the B.C. legislation under which Bruce applied (namely the Wills Variation Act) is unique amongst the Canadian provinces, since it expressly allows a court to vary a person’s Will in order to “make adequate provision” for the support of his or her spouse or children. Furthermore, the Act has been interpreted to intend for recognition of a “moral obligation” toward one’s children, even when they are independent adults. The court in Holvenstot accordingly pointed out that there were competing principles at play: namely the notion of “testamentary autonomy” versus the idea that parents executing a Will have a “moral obligation” toward their adult children. In this case, the balance favoured giving effect to Patricia’s wishes.

In contrast to B.C., Ontario has no equivalent legislation. Nonetheless, courts in this province have in the past recognized a similar moral obligation, in cases involving both dependent and independent children. As such, the decision in Holvenstot remains noteworthy: in refusing to invoke its discretion under the Wills Variation Act the court essentially showed that – notwithstanding the moral duty – there may be judicial reluctance to interfere with or vary a Will in those cases where the deceased parent had provided a legitimate and logical reason for his or her decision to disinherit an adult child.

Still, the situation In Ontario is still speculative, since there is no comparable overarching legislation and there has been (as yet) no comparable fact scenario for this province’s courts to consider.

Your thoughts?

For the full text of the decision, see:

Holvenstot v. Holvenstot, 2012 BCSC 923 http://canlii.ca/t/frt0f

Russell Alexander Family Lawyers work exclusively on divorce law and family related matters, including custody, spousal support, child support, alimony and separation. For further information, or to schedule an appointment, call (905) 655-6335.