Challenging the Validity of Wills

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IS DISINHERITENCE BECAUSE OF SEXUAL ORIENTATION LEGAL?

August 19, 2011 in Challenging the Validity of Wills, Claims Against Estate: Summary Procedure, Dependant Support Claims, Equity, Estate Litigation, Public Policy & Estates, Variation of Trusts, Wills by Charles Wagner

Will a Canadian court vary or set aside a will when a parent disinherits a gay/lesbian child because of his/her sexual orientation? The law may be different depending on the province.

In Canada, the law balances the idea of testamentary independence against public policy concerns. While cherishing testamentary freedom, the law intervenes when it finds provisions in the will offensive to public policy and or equity. In Ontario, this restriction on testamentary freedom has been expressed by laws passed to protect spouses (under Part I of the Family Law Act [FN1]) and dependents (under Parts II and V of the Succession Law Reform Act [FN2]).

Two true stories from British Columbia: In both Patterson v. Lauritsen [FN3] and Peden v. Peden Estate [FN4], a parent disinherited or reduced the inheritance of a child because the parent did not approve of the child’s homosexuality. The Court in each of these cases held that, in today’s society, homosexuality is not a factor that would justify a judicious parent disinheriting or limiting benefits to a child.

Would the same thing happen in Ontario? Maybe – maybe not. In the British Columbia cases, even though the parents had capacity and were not subject to undue influence, their wills were open to challenge on the ground that the parents had disinherited their children without, what the court considered to be, reasonable cause. While the Ontario Court of Appeal has stated that the “moral considerations” underpinning the British Columbia approach apply in Ontario, to my knowledge, there has been no case to date where an Ontario Court has varied a will to benefit a non-dependent disinherited adult child [FN5]. In Ontario, except where a will offends public policy, it is still open to debate whether a capable parent, acting voluntarily, is entitled to disinherit a child - however whimsical, mean-spirited, or controlling such action may seem.

A comment made by an Ontario judge in 1995 is of interest insofar as it suggests where an Ontario court may draw the line. In Fox v. Fox Estate [FN6], a decision of the Ontario Court of Appeal, the father named his wife the executrix under his will. The income was to be used for the grandchildren with the capital for the son. The will also gave the mother an unfettered discretion to encroach on the capital of the estate for the benefit of her son’s children. She took all the capital, eliminating her son’s inheritance because he was involved with a non-Jew. The judge commented, “….in response to a query from the bench, counsel in this case were not prepared to argue that any court would today uphold a condition in a will which provides that a beneficiary is to be disinherited if he or she marries outside of a particular religious faith”. The Court viewed the mother’s behaviour as being mala fides and contrary to public policy.

Testators that ignore the changing winds of public policy do so at their own peril. In M v. H, [FN7] the Supreme Court of Canada compelled Ontario to change the definition of “spouse” as set out in the support provisions of the Family Law Act. Prior to that case, common-law heterosexual couples were included in the definition of spouse, but gay and lesbian couples were not. The Supreme Court of Canada ruled that, for the purposes of support under the Family Law Act, a spouse includes “…either of two persons …”. The court ruled that limiting the definition of “spouse” to heterosexual couples, for the purposes of support, was discriminatory and not justifiable. In Canada today same-sex marriages are legal. It is therefore entirely possible that an Ontario court would set aside a provision in a will that disinherited someone because of his/her sexual orientation, on the grounds that such disinheritance offended public policy.

Charles B. Wagner is a partner at Wagner Sidlofsky LLP. This Toronto office is a boutique litigation law firm whose practice is focused on estate, commercial and tax litigation. The author gratefully acknowledges the assistance of Michelle Kotzer in the preparation of this article.

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FN1. Family Law Act, R.S.O. 1990, c. F.3

FN 2. Succession Law Reform Act, R.S.O. 1990, c. S.26

FN3. Patterson v Lauritsen (1984) CarswellBC 381, 58 BCLOR 182, [1984] 6 WWR 329, 17 ETR 316. Available on line at Patterson v. Lauritsen, 1984 CanLII 353 (BC SC)

FN4. Peden v Peden Estate (2006) CarswellBC 2801, 2006 BCSC 1713, [2007] WDFL 1837. Available on line at Peden v. Peden, Smith et al., 2006 BCSC 1713 (CanLII)

FN5. See Justice Cullity’s 1998 decision of Banton v. Banton, 1998 CanLII 14926 (ON SC) and in particular paragraph 36 where he states, “It is hardly necessary to say that the principle of freedom of testamentary disposition is in the background to the issues relating to the validity of the wills of December 21, 1994 and May 4, 1995. If George Banton had capacity and was not subject to undue influence at the time of the execution of one of those wills, its validity and effect are not open to challenge on the ground that he thereby disinherited his children. In this jurisdiction, unlike others in Canada and elsewhere, unless the children are dependants, a capable parent acting voluntarily, is entitled to do this however mean and ungrateful it may seem, or how selfish the motive; hence the focus in this case, as in so many others, on testamentary capacity and undue influence.”

Compare this with the decision of the Court of appeal in Cummings v. Cummings CanLII 9339 (ON CA). At paragraph 40, Blair J. A. states, “[40] In my view these questions have been resolved by the decision of the Supreme Court of Canada in Tataryn v. Tataryn Estate 1994 CanLII 51 (S.C.C.), [1994] 2 S.C.R. 807. There, the Court held that a deceased’s moral duty towards his or her dependants is a relevant consideration on a dependants’ relief application, and that judges are not limited to conducting a needs-based economic analysis in determining what disposition to make. In doing so, it rejected the argument that the “judicious father and husband” test should be replaced with a needs-based analysis: see para. 23. I see no reason why the principles of Tataryn should not apply equally in Ontario, even though they were enunciated in the context of the British Columbia Wills Variation Act R.S.B.C. 1979, c. 435, in which the language is somewhat different from that of the Succession Law Reform Act.

I also recommend the reader to see Susan J. Woodley’s paper entitled “The (Almost, Possible, Probable) Right of an Adult Child to Receive Support”, presented at the Ontario Bar Association 2009 Institute of Continuing Legal Education.

FN6. Fox v. Fox Estate 1996 CanLII 779 (ON C.A.), (1996), 28 O.R. (3d) 496, 10 E.T.R. (2d) 229 (C.A.),

FN7. M. v. H. [1999] 2 S.C.R. 3. I refer the reader to an aritlce written by Mary C. Hurly entitled “Sexual Orientation and Legal Rights”. The article appears on the Parliament of Canada Website and can be found at Sexual Orientation and Legal Rights (PRB 08-49E) . When considering the impact of the decision and how it reflects on public policy in Canada her conclusion speaks to how a court may view the public policy issue. “Judicial and legislative reforms, particularly since the M. v. H. decision in 1999, have effected a significant shift in Canadian society with respect to recognition of the legal status and claims of same-sex conjugal couples. The watershed nature of this shift is illustrated, most notably, by federal legislation sanctioning same-sex marriage.

Opponents of these reforms continue to argue that the extension of same-sex rights in general, and same-sex marriage in particular, undermine the traditional family and family values. At the same time, some gay and lesbian couples (like some heterosexual couples) do not want either the legal obligations or the benefits that flow from spousal status or marriage. As the 2002 report of the former Law Commission of Canada and other indicators suggest, the question of whether the matter of entitlements based on the marital or conjugal nature of a partnership should be re-examined remains open.”

May 16, 2011 Seminar – Bnai Brith Seminar – “Financial Predators and the Elderly – Banton v Banton.”

May 1, 2011 in Applications for the Opinion and Direction of the Court, Capacity, Challenging the Validity of Wills, constructive trust, Dependant Support Claims, Elder Law, Estate Litigation, Executors / Trustees, Fraud, Wills by Charles Wagner

The Estate and Trusts Group, Lawyers Division Bnai Brith and the adult education committee of Shaarei Shomayim are sponsoring a continuing legal education seminar entitled “Financial Predators and the Elderly – Banton v Banton.”

In this case the 88 year old George Banton fell in love with a 32 year old waitress named Muna. He married Muna and made a new will that disinherited his children. Virtually all contact with his kids stopped. At the time Mr. Banton was depressed, terminally ill, and mentally unwell. On hearing that their father was certified as incapable and that Muna, had withdrawn $10,000 from his account, George’s sons used their power of attorney to transfer George’s money into an irrevocable inter vivos trust under which they and CIBC Trust Corporation would be the trustees. The trust allowed the money to be used for George’s during his life and would go to his children after his death.

When George died his children challenged the new Will and the validity of the marriage to the much younger Muna. She challenged the sons’ creation of the trust. The fact situation in Banton v Banton underscores the risk to the elderly of being victimized by financial predators who look to marry a vulnerable older person as a means to take away their money and disinherit their children. To quote the judge in the Banton case, “I have no doubt at all that this influence was deliberately exerted to enable her to obtain control and, ultimately, the ownership of his assets…. After she consented to marry him, her influence became overwhelming and irresistible. The speed with which she was able to procure a will and a power of attorney in her favour is testimony to this as well as to his weak and vulnerable mental condition. …Thereafter, he was held incommunicado as far as his family were concerned…. I believe George Banton was a mere puppet, when he was not simply a bystander, during the guardianship proceedings.”

These continuing B’nai Brith legal education seminars have been going on for approximately four years. Many members of B’nai Brith are professionals whose practice involves servicing senior citizens and their families. B’nai Brith runs these seminars in order to meet present and future educational needs of our membership’s legal and accounting profession. These seminars were inspired, in part, by legal problems of concern to the Jewish community as well as the community at large.

To educate attendees these seminars feature some of Ontario’s premiere estate litigators. These lawyers will be participating in mock court proceedings based on the fact scenario of Banton v Banton. Prior to the moot court Rachel Blumenfeld, an estate lawyer at Miller Thomson (bit.ly/rblumenfeld), will explain the legal options open to children wanting to protect elderly parents in second marriage situations. Thereafter Rabbi Joe Kanofsky of Shaarei Torah will speak from an ethical pastoral perspective about the obligations and choices to the children, parent and professionals when dealing with this type of scenario. The Rabbi’s presentation can be used by lawyers towards fulfilling part of their mandatory 3 hours of continuing professional development related to professional responsibility, ethics and practice management.

The judge for the moot appeal will be Jordan Atin (http://bit.ly/jordanatin). Archie Rabinowitz (http://bit.ly/arabinowitz) and Kimberly Whaley (http://bit.ly/kwhaley) will be representing the Banton children and Ian Hull (http://bit.ly/ianhull) and Charles B. Wagner (http://bit.ly/cwagner) will be representing the waitress.

Each attendee will receive a binder and a flash drive which will contain papers prepared by the lawyers about different aspects of the case as well as some actual court documents relating to Banton. At the end of the seminar there will be a question and answer session from the panel and the participants.

The seminar will be held Monday, May 16^th, 2011 at Shaarei Shomayim 470 Glencairn Ave ON M5N 1V8. Registration starts at 7:30 am. and the seminar starts at 8:00 a.m. For information or to register, call Hyla Reichmann at (416) 633-6224, ext. 128, or email hreichmann@bnaibrith.ca .

Are Adult Children Legally Entitled To Inheritance?

January 6, 2011 in Applications for the Opinion and Direction of the Court, Challenging the Validity of Wills, Claims Against Estate: Summary Procedure, Court Proceedings to Ascertain Heirs of an Estate, Dependant Support Claims, Variation of Trusts, Wills by Charles Wagner

While their father loved both Samantha and Reuben equally, in his will, and in accordance with his culture, all the assets of the father were left to the male heir. Is this legal?

The legality of father’s will may depend on which province’s law applies. If the law of British Columbia governed there is a very good chance that Samantha would succeed and the Court would order the estate be split equally. If Ontario law applied and there were no other legal issues raised concerning the validity of the will then Samantha would have a less likely chance to win. Why the uncertainty? Let’s look at three cases to explain, Tataryn v Tataryn (FN1), Cummings v. Cummings (FN2) and Johnson v. Huchkewich(FN3).

Tataryn was a case in British Columbia. It was ultimately decided by the Supreme Court of Canada. In summary, the deceased’s will favoured one son and disinherited the other son and gave less money to the deceased’s wife. The court varied the will based on the deceased’s moral obligation to his wife and disinherited adult son. In British Columbia, unless there is some debt or the favoured child is a dependent, or there is a valid reason for disinheriting a person, each child has a moral and legally enforceable claim against the estate.

The importance of “moral claims” as set out in the Tataryn case was adopted by the Ontario Court of Appeal in 2004 in Cummings v Cummings. In this unfortunate case a second wife was litigating against dependent adult children of a first marriage. The son, Paul, suffered from a progressively debilitating incurable neuromuscular disease known as Becker’s muscular dystrophy. Paul, was arguably entitled to the all of the small estate. Citing Tataryn, Justice Cullity explained, “The issue of the weight to be given to moral considerations is relevant in this case: it is posed quite directly by the [second wife’s] concession that she is not in need of support. On a strictly needs-based approach, I might well be justified in ordering that the entirety of the net testamentary estate be transferred to the support of Paul…I do not think that this would be the correct disposition of the case. I believe that, apart from any residual value that is to be attributed to freedom of testamentary disposition….moral considerations continue to play a part in the analysis.”

So has Ontario followed British Columbia’s lead? Maybe, maybe not.

I have reviewed many related Ontario cases post Cummings. To the best of my knowledge no Ontario court has understood Cummings to mean that the moral claim of a disinherited adult non dependent child was legally enforceable. As you recall both the adult children in Cummings were dependants which means that the father was providing support or was under a legal obligation to provide support immediately before his death. It may be that the courts apply the moral obligation only for dependents. For example, in a recent Ontario case, Johnson v. Huchkewich, one disinherited daughter challenged her mother’s will. The judge did not even address whether a child’s moral claim constitutes a legal claim. The only relevance of “moral claims” was how it reflected on capacity. The daughter argued that her mother lacked the ability to assess and appreciate the moral claims of her children and therefore did not have capacity. The judge did not accept that argument.

So will the winds of non dependent adult children’s moral claims from British Columbia blow through Ontario? It still remains to be seen. However, there are a number of lawyers who believe it’s coming. In her article on this topic, prepared for the Law Society of Upper Canada’s continuing legal education program, Susan Woodley (a very well respected member of the bar in Ontario) answered the question this way, “almost, possibly, probably”.

This short review of the case law should not be taken as legal advice. Based on my experience in dealing with these cases, they often turn on the specific facts. If you have a legal question relating to something similar, you are best advised to seek out competent legal counsel to determine your best course of action.

Charles B. Wagner is the managing partner at Wagner Sidlofsky LLP. This Toronto office is a boutique litigation law firm whose practice is focused on estate, commercial and tax litigation.

FN1 Tataryn v Tataryn 3 E.T.R. (2d) 229 S.C.C.

FN2 Cummings v. Cummings ( (2004), 5 E.T.R. (3d) (81) (Ont. S.C) (Cullity, J.); see Cummings v.Cummings (2004) 5 ETR (3rd) 97 (Ont. C.A.)

FN3 Johnson v. Huchkewich, 2010 ONSC 6002

Second Marriages and Risks to the Estate

November 29, 2010 in Applications for the Opinion and Direction of the Court, Capacity, Challenging the Validity of Wills, Claims Against Estate: Summary Procedure, Dependant Support Claims, Estate Litigation, Unjust Enrichment, Constructive Trust and Quantum Meruit Claims in Estates, Wills by Charles Wagner

Joseph was 60 years old when lost his wife to cancer. On line he met an Israeli called Rebecca, a 40 year old widow. They emailed each other, grew to care for one another, and decided to marry. Rebecca and her children moved into Joseph’s home. Joseph’s adult children from his first marriage feared that Rebecca and her children were going to take away their inheritance. Joseph assured his children that Rebecca signed an agreement under which she gave up all her claims under the Family Law Act and could not claim support against his estate when Joseph died. Joseph assured them that he left his children all of his money. Should the children have relaxed? Maybe – Maybe not.

Revocation by marriage
Unless Joseph made a new will after he remarried or in contemplation of marriage Joseph’s old will was revoked by his marriage to Rebecca. By virtue of the laws of intestacy(FN1) , despite the contract, Rebecca would receive a preferential share (the first $200,000.00) and a distributive share (1/3) of the balance.

Family Law Act Considerations
So let’s assume Joseph makes a new will. Can his children rely on the fact that their father had Rebecca sign a domestic contract? Rebecca’s lawyer may argue that Joseph failed to disclose significant assets when the domestic contract was signed. Furthermore, her lawyer may argue that Rebecca’s English was minimal and she did not have independent legal advice so there is no way she understood the nature and consequences of signing this contract. Accordingly, the contract may be set aside and Rebecca could exercise her right under section 6 of Ontario’s Family Law Act. That would entitle Rebecca to receive an equal division of net family property under section 5 of the legislation.

Succession Law Reform Act Issues
Now let’s imagine that at Joseph’s insistence Rebecca hires a lawyer who speaks Hebrew so she cannot later claim she did not understand the contract. Joseph’s lawyer makes full and frank disclosure of all of his assets in the agreement. Can the children now relax? Unfortunately – the answer is not yet. Under the legislation a domestic contract is only one factor the court has to take into account and the court has the discretion to ignore the contract(FN2). For example, in Butts Estate v Butts(FN3) a husband and wife signed a separation agreement providing for $500 per month support. No one disputed that this was to be a final agreement. Despite the fact that there was a contract where both parties fully understood the terms of that agreement the court decided that the support provided was insufficient and increased the support payments to be paid by the estate to the separated wife by $1000 per month.

There is a very old joke that death is not the end – it is the beginning of estate litigation. While the scenario outlined above is fictional it nonetheless reflects a growing trend. People often feel they were treated unfairly and go to court despite signing a contract where they agreed not to make any claim. Based on my experience in dealing with these cases, and what should be evident from this review. each situation’s facts may make a world of difference to how a court might view a case. Whether a party is seeking is getting married or there is a dispute after death there is no replacement for seeking out the advice of a competent experienced lawyer who knows how to protect your interests.

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FN1. See section 16 of Succession Law Reform Act, R.S.O. 1990, c. S.26

FN2 See See Part V of the Succession Law Reform Act, R.S.O. 1990, c. S.26 and in particular section 62(1)(m) which lists the factors taken into account. By virtue of an “agreement” being only one factor the courts have made awards of support even though there was a domestic contract. As well, section 63(4) which provides that an order under this section may be made despite any agreement or waiver to the contrary.

FN3. Butts Estate v Butts (1999), 27 E.T.R. (2d) 81 (Ont.GenDiv.) For an excellent reviewon this topic see Archie Rabinowitz’s article Dependant’s Support Applications – The Statute that Continues to “Speak”

Rectification – the Equitable Remedy to Fix Errors in a Will

November 12, 2010 in Applications for the Opinion and Direction of the Court, Challenging the Validity of Wills, Estate Litigation, Executors / Trustees, Public Policy & Estates, Solicitors’ Negligence in Estate Matters, Wills by Charles Wagner

Sometimes even professionals just drop the ball. Imagine walking into your lawyer’s and asking him to make a few changes to your will. Instead of typing in a bequest of $2,500.00 the lawyer types $25,000.00. The Will is signed and no one notices the mistake until after the testator dies. That is what happened in Nugent v. Lang (http://bit.ly/dhN38j ). The lawyer admitted the error was his and he testified that the testator wanted the bequest to be $2,500. It should be simple right? Not so fast.

The Plaintiff asked the court to fix the mistake. The legal term for this request is “Rectification”. Courts use this equitable remedy very carefully. Exactly what type of evidence a judge may consider is being debated in the courts. How sure does the court have to be to fix the mistake? Is the court limited in how it can fix the mistake? In exercising the remedy is the court limited to only being able to delete certain parts of the will? Can a judge add missing words? In this case the court rectified the draftsman’s error and changed the bequest from $25,000 to $2,500.
Cases like Lipson v Lipson,( http://bit.ly/lipson ), Binkley Estate v. Lang, (2009) 50 E.T.R. (3d) 44 and Balaz v Balaz,( http://bit.ly/cq9BJi] ) all involve situations where the courts fixed some form of lawyer mistake. Either there was an accidental slip or omission because of a typographical or clerical error, the testator’s instructions had been misunderstood, or the testator’s instructions had not been carried out. Despite these recent cases where judges fixed mistakes made in the will it is very important to remember that not every error will be rectified by the courts.
In Re Estate of Blanca Esther Robinson (http://bit.ly/9x5g0B ) the court refused to fix the mistake. In that case the testator signed a Will dealing with her European property. She also signed a Canadian Will dealing with her Canadian property. Years later, she made a new Canadian Will but did not tell her new lawyer about the Spanish will. Since the lawyer had no knowledge about the Spanish Will the solicitor included the standard provision revoking all previous wills. The beneficiaries asked the court to fix the mistake. The court refused. The judge stated, “….if no errors were made by the solicitor and the words in the will were reviewed and approved by the testator, rectification will not be available simply because the testator was mistaken about their legal effect.” So it seems that not every mistake will be rectified.
This short review of the case law on rectification should not be taken as legal advice. Based on my experience in dealing with these cases, they often turn on the specific facts. If you have a legal question relating to something similar, you are best advised to seek out competent legal counsel to determine your best course of action.

Charles B. Wagner is the managing partner at Charles B. Wagner and Associates. This Toronto office is a boutique litigation law firm whose practice is focused on estate and commercial litigation.

DISINHERITING CHILDREN WHO MARRY OUTSIDE THE FAITH

October 3, 2010 in Applications for the Opinion and Direction of the Court, Capacity, Challenging the Validity of Wills, Estate Litigation, Executors / Trustees, Halacha and Estate Litigation, Public Policy & Estates, Wills by Charles Wagner

While I have previously addressed the legality of disinheriting intermarried children in both in the Tribune (http://bit.ly/9ADVJY ) and in the Ontario Lawyer’s Weekly (http://bit.ly/bv9Rjm) a recent case suggests another review is warranted. In Re Estate of Max Feinberg (http://bit.ly/cb5CKo ) three Illinois courts reviewed what they called the Jewish Clause which stated: “A descendant of mine other than a child of mine who marries outside the Jewish faith (unless the spouse of such descendant has converted or converts within one year of the marriage to the Jewish faith) and his or her descendents shall be deemed to be deceased for all purposes of this instrument as of the date of such marriage.”

The court weighed testamentary freedom against the common law’s disdain for wills that restrain people from entering into an otherwise legal marriage. The Illinois’ court of first instance and appellate court ruled that the Jewish Clause was invalid because it seriously interfered with the right of individuals to marry a person of their own choosing. It was now up to the Supreme Court of Illinois.

The Illinois Supreme Court held that the Jewish Clause was valid. The test was whether the provision was capable of producing harm that its enforcement would be contrary to the public interest. The Illinois Supreme Court upheld the Jewish Clause because they placed a premium on the right of individuals to decide what happens to their assets after they die. They disagreed with the lower courts who suggested that the clause in question was a restraint of marriage.

What is the position of other jurisdictions? As Illinois’ Justice Greman, pointed out, “… In most states they allow this – not just with Jews but for Catholics and others.” So what about Ontario? The Ontario Court of Appeal, in a non-binding aside (obiter), addressed this issue in the Fox Estate case (http://bit.ly/98b5gw). Fox’s will gave the executor absolute discretion to use trust money for his grandchildren. The executor removed all the money to disinherit her son because he married a non Jew. At issue was whether the executor’s conduct was proper. The judge commented, “….in response to a query from the bench, counsel in this case were not prepared to argue that any court would today uphold a condition in a will which provides that a beneficiary is to be disinherited if he or she marries outside of a particular religious faith”.

Given the treatment of this issue in the US, does that mean a Jewish Clause would be void in Ontario? Maybe – Maybe not. The fact that three Illinois courts came to different conclusions should tell you that this issue is complicated and this review should not be taken as legal advice. I receive calls about this and other similar issues all the time. Cases often turn on the specific facts. If you have a legal question relating to something similar, you are best advised to seek out competent legal counsel to determine your best course of action.

How to Apply for Probate In Ontario

May 4, 2010 in Challenging the Validity of Wills, Elder Law, Estate Litigation, Executors / Trustees, Orders for Assistance, Probate, Wills by Charles Wagner

The best step an estate trustee can take is to approach an experienced solicitor for assistance in obtaining probate. The process will likely go far quicker and more efficiently. For those who wish to educate themselves on how to obtain probate here are some sites that might prove useful:

The Law Society of Upper Canada at http://rc.lsuc.on.ca/jsp/ht/prepareAppCertAppEstateTrusteeWithWill.jsp#s7
Ministry of Attorney General – Where do I file an application for “Letters Probate”
See RULES OF CIVIL PROCEDURE – R.R.O. 1990, Reg. 194 Rules 74.04, 74.05, 74.05.1, 74.06, 74.07, 74.08, 74.09
sections 5-7 of the Estates Act, R.S.O. 1990, c. E.21
Estates Administration Act
Estate Administration Tax Act
Succession Law Reform Act

Stopping Probate

May 2, 2010 in Capacity, Challenging the Validity of Wills, Claims Against Estate: Summary Procedure, Executors / Trustees, Probate, Wills by Charles Wagner

Why would someone want to stop a probate application? How can probate be stopped?

Imagine that Mom is senile and in the nursing home. She is at death’s door and her daughter Debbie brings in a lawyer to draft a new will in which Mom names Debbie as her executor and bequeaths her home and all her money to Debbie. When Mom dies, her son Ian is upset especially since the previous will divided everything equally between him and Debbie.

WHY STOP PROBATE? In Ontario when the deceased left a Will, Probate is called a “certificate of appointment with a will”. In our case scenario if the court issues Probate Debbie, as estate trustee/executor, has authority to administer the provisions of the Mom’s will. Ian will want to stop probate because otherwise his sister will inherit Mom’s home and get all of Mom’s money. Without probate:

banks are unlikely to release the Mom’s money or give the executor access to the deceased’s safety deposit box;
public companies will not transfer shares to the estate;
insurance companies are loathe to pay out on policies without first seeing a certificate of appointment; and
the land registrar ordinarily does not permit the transfer of land based only on the will. It is for this reason that, more often than not, executors apply for and receive a certificate of appointment with a will.

This certificate of appointment gives these institutions the certainty that the document in question truly is the last will and testament of the deceased and permits the executor to carry out his duties.
So – the bottom line is if there is a will challenge the challengers want to prevent the Will from being probated.

HOW TO STOP PROBATE IN ONTARIO
If the court has not granted probate then the first step should be filing a Notice of Objection to prevent the Will from being probated. The Notice of Objection will set out the nature of our client’s financial interest and the grounds for the objection. As long as the objector follows the necessary legal steps, as a result of filing the notice of objection the applicant for a Certificate of Appointment of Estate Trustee (the Probate application) cannot obtain probate without the issues in dispute being litigated or resolved. For more information on this process see Rule 75.03 of the Rules Of Civil Procedure – R.R.O. 1990, Reg. 194.

If Probate was already granted then the parties challenging the will have stop the executor from administering the estate and the only way to do that is to bring a motion for the return of the certificate of appointment or for the court to revoke the certificate of appointment.

Return Of Certificate Of Appointment Rule 75.05 Ian could bring a motion asking the court to make his sister return the certificate of appointment (the Probate) because he is challenging the will.
Revocation Of Certificate Of Appointment Rule 75.04. Ian could also bring an application to have the Probate Revoked. To do so he would have to have an apparent financial interest in the estate and be able to satisfy the court that :

                o the certificate was issued in error or as a result of a fraud on the court;
                o the appointment is no longer effective; or
               o the certificate should be revoked for any other reason.

Seduction, Marriage and Elder Abuse

April 11, 2010 in Capacity, Challenging the Validity of Wills, Dependant Support Claims, Elder Law, Estate Litigation, Executors / Trustees, Unjust Enrichment, Constructive Trust and Quantum Meruit Claims in Estates, Wills by Charles Wagner

Maurice Banton was an 88 year old father too unwell to live alone. His children moved him into a senior’s residence. Maurice meets Muna, a waitress working at the senior’s residence, and romance blooms. Did I forget to mention Muna was 50 years younger that Maurice?

This was the case of Banton v Banton (FN1) and its fact situation underscores the risk to the elderly being victimized by financial predators. Was Muna really after Maurice’s money? To quote the judge, “I have no doubt at all that this influence was deliberately exerted to enable her to obtain control and, ultimately, the ownership of his assets.”

Despite the protestations of his children, the young waitress woos the elder Mr. Banton and gets him to marry her. Unbeknownst to his children the young lady also contacts her lawyer and arranges for her new husband to make new wills which cut out his children. Why would a father who loved his children do such a thing? The court found that “It is the case of a lonely, depressed, terminally ill, severely disabled and cognitively impaired old man whose enfeebled condition made him an easy prey for a person like Muna with designs on his property.” Maurice suffered from the delusions that his children did not love him and only wanted his money. This insane delusion directly impacted on the decision to disinherit his children.

It was clear to the judge that the decision to give him money to his wife was not Mr. Banton’s. On the contrary, that decision was really the wife’s who imposed her will on him. The new Mrs. Banton played on her husband’s upset that his children sold his house and, contrary to his hope and expectation, they had put him into Lifestyles instead of allowing him to live with one of them. George Banton believed his unfounded allegation that his children were not interested in him and were only interested in his money. So does this mean Mrs. Banton gets nothing? Not so fast.

The court noted that while the man did not have the capacity to make a will, he did have the capacity to get married. Since the threshold for the capacity to marry was so low, the children’s attempt to annul it did not succeed. Apparently, even a man who is lonely, depressed, terminally ill, severely disabled and cognitively impaired had sufficient memory and understanding to continue to appreciate nature and responsibilities of marriage and that was sufficient to validate the marriage. Furthermore, in Canada, Ontario’s Succession Law Reform Act provides that a Will is revoked by the marriage of the testator so that despite the fact that Muna deliberately planned this charade it looked like Maurice’s previous Will was cancelled and the woman who schemed to obtain his property would succeed. Under the Succession Law Reform Act a spouse would inherit a preferential share of Maurice’s estate ($200,000.00) under an intestacy plus her distributive share. Fortunately for Maurice’s children, Justice Cullity found a way to do the right thing.

In this case, the children were fortunate that the judge found that the father’s residence was really held in trust for the children so it did not form part of the estate. Muna did not get much money. This time the children were lucky. Unfortunately, that is not always the case.

Anecdotally, as someone whose practice focuses in on estate litigation and elder abuse I see it happening more often. There is a very interesting paper (FN2) published by a Statistics Canada based on Statistics Canada sources. They report that “…overall, 7% of older adults experienced some form of emotional or financial abuse by an adult child, caregiver, spouse or common law spouse with whom they had contact in the five years prior to the survey. The vast majority of emotional and financial abuse was committed by spouses. Senior men (9%) were more likely than senior women (6%) to report being victims of emotional or financial abuse.” To measure financial abuse Statistics Canada and the Toronto Police Service (FN3) asked seniors certain questions which I have summarized below. If one suspects the answer is yes to more than half it’s time to seek out professional counsel for advice.

Has the alleged rogue
1.     tried to limit the elderly person’s contact with his family or friends?
2.     put the elderly person down or calls them names to make them feel bad?
3.     is jealous and doesn’t want the elderly person to talk to other men/women?
4.    Threatens to withdraw care or threatens the elderly persons or someone close to the elderly person?
5.    demands to know who the elderly person is with or speaks to at all times?
6.    damages or destroys the elderly person’s possession or property?
7.    prevents the elderly person from knowing or having access to the elderly person’s income or financial information?
8.    tries to compel the elderly person to relinquish control over finances?
9.    tries to force the elderly person to give up something of value?
10.  they try to force you the elderly person sign documents which were not understood or to change Last Will and Testament or try to obtain Power of Attorney over your finances?
11.   introduced a new lawyer into the situation which the elderly person never met before and has no knowledge of the elderly person’s history?

Do not consider this case review as legal advice. It is presented merely to demonstrate some of the disputes dealt with by this firm and its counsel and how one court dealt with some of the issues relating to elder abuse. It is important to remember that each case has a different set of facts which may give rise to additional and or different remedies or prevent the court from awarding the same type of relief. If you believe your fact situation is similar and litigation may be pending or has already begun, it is always prudent to contact a competent lawyer who will deal with the specific fact situation and legal issues particular to your case.

FN1 Banton v. Banton 1998 CarswellOnt 3423, 164 D.L.R. (4th) 176, 66 O.T.C. 161. Available on line at http://www.canlii.org/eliisa/highlight.do?text=banton+cullity&language=en&searchTitle=Search+all+CanLII+Databases&path=/en/on/onsc/doc/1998/1998canlii14926/1998canlii14926.html

FN2 http://www.statcan.gc.ca/pub/85f0033m/85f0033m2001008-eng.pdf
FN3 http://www.torontopolice.on.ca/crimeprevention/elderabuse.php

First Step in Will Challenge in Ontario

March 24, 2010 in Challenging the Validity of Wills, Estate Litigation, Executors / Trustees by Charles Wagner

The first step to challenging a Will in Ontario depends on whether probate been granted? Any person can go to the local court registrar and do a search to see if the court has granted a certificate of appointment which established the validity of the Will (Probate). If probate has not been granted then the person objecting to the will can file a form called “a Notice of Objection” with the court registrar. If probate has been granted then the person objecting to the will has to bring a motion for the return of the certificate of appointment.

Why is this first step so important? Once the Notice of Objection is filed and in effect the Court Registrar will not issue a certificate of appointment (Probate). It’s important to remember that the granting of probate tells the world that the Will in question is the last will and testament of the deceased and a valid document. It tells the world that the executor is in charge of the assets of the deceased. There is a risk that a dishonest or uninformed estate trustee, when granted Probate, can sell the assets of the estate to an innocent third party or even taken them out of the jurisdiction. This means that even if the will challenge is successful collecting on that judgment may be frustrated because the assets are already gone and possibly untraceable.

Even if the probate application is made in Toronto the person challenging the will can file his/her objection with their local court registrar because Ontario’s court system is linked. But be careful – it is not instantaneous. I have seen certificate of appointments being issued in one city after the filing of notices of objection in another city because they were not inputted into the system yet and the registrar did not know there was any objection. The best practice is to file the notice of objection with the court registrar where the application for probate has been started.

It’s important to remember that filing a Notice of Objection is only one important step in the litigation. The real first step for anyone challenging a will is to seek the advice of a lawyer familiar with the process. That lawyer can review the file and advise you if there is a worthwhile challenge to the will. Furthermore, filing a Notice of Objection is a relatively simple inexpensive step. But, if it is not done properly and as a result the court registrar issues a certificate of appointment. then a more costly process (a motion for the return of the certificate of appointment) will have to be taken.

It is also very important to know that estate assets may be at risk even if the person challenging the will files a notice of objection. Remember, the power of the estate trustee/executor to deal with estate assets comes from the Will itself – not the certificate of appointment. It’s just that there are certain institutions like banks and insurance companies who need to be certain that the documents being shown to them is really the last will and testament of the deceased. There are assets, like the shares in private corporations and real estate (under certain circumstances) that can be transferred without the estate trustee getting probate. An experience lawyer can guide you in how to go to court, freeze the other assets and challenge the will.

Some on line links that may be helpful

Rules 74.12(1) (b) and 75.03 – Objection to Issuing Certificate of Appointment. See http://www.e-laws.gov.on.ca/html/regs/english/elaws_regs_900194_e.htm

Notice of Objection Form 75.1. See http://www.ontariocourtforms.on.ca/english/civil

To Find Lawyers. See the Lawyer Referral Service provided by the Law Society of Upper Canada at http://www.lsuc.on.ca/public/a/faqs—lawyer-referral-service/

It would be a mistake to treat this blog as substantive legal advice. For those considering commencing an application to compell an accounting, there is no substitute for hiring a competent lawyer whose own research, analysis and judgment should be canvassed.