SCHNURR KIRSH OELBAUM TATOR LLP HAS BEEN A LEADER IN ESATE LITIGATION SINCE 1974 WITH EXPERIENCE SPECIALIZING IN THESE AREAS.
Contested Wills
To be valid, a will must be a free expression of the wishes of the testator with respect to the distribution of his or her estate upon death. A will must be in writing and conform to the requirements of execution as set out in Part I of the Succession Law Reform Act.
The common challenges to the validity of a will are:
the will was not executed in accordance with the requirements of the Succession Law Reform Act;
the testator lacked testamentary capacity;
the testator did not have knowledge of or approve the contents of the will; and
the testator was unduly influenced.
Less frequently, wills are also challenged based upon allegations of forgery or fraud.
The procedure followed when seeking to determine the validity or invalidity of a will is very different from the procedure involved in general litigation. There are also a number of specific rules of evidence having unique application to will challenges. The onus of proof is placed upon the propounder of the will to demonstrate that a will was duly executed; that the testator had testamentary capacity at the time that the will was made; and, that the testator had knowledge of and approved the contents of his or her will. A will challenger has the onus of proof respecting allegations of undue influence. The presence of various evidentiary presumptions impact upon the manner in which evidence is proffered in court challenges involving the validity of a will.
TRUSTEE DISPUTES
While a personal representative named in a will cannot be required to assume that office, once an individual has commenced acting as an estate trustee, he or she cannot unilaterally resign and divest himself or herself of the position. A person named in a testamentary document who does not wish to act may renounce his or her entitlement to act as an estate trustee and file that renunciation with the court. However, once a Certificate of Appointment of Estate Trustee has been issued by the court, a personal representative must be removed by court order upon application made pursuant to the Trustee Act. A court may remove a personal representative and appoint a new personal representative upon an estate trustee’s own application or upon the application of an estate beneficiary.
A removal application may be brought by a beneficiary who is displeased with the actions of a personal representative or by a trustee who is unable to work with a co-trustee or cannot resolve a fundamental disagreement respecting the administration of an estate.
The application is brought pursuant to section 37 of the Trustee Act. The application must be served upon any co-trustees and upon all beneficiaries including those beneficiaries with a contingent interest in an estate. Where minors are involved or where, there is a class of beneficiaries including unborn or unascertained, The Children’s Lawyer must be served.
PASSING OF ACCOUNTS
Estate Trustees, trustees of inter vivos trusts, attorneys for property and guardians of property of mentally incapable individuals are all required to maintain records of their dealings with the property under their administration and care. This is because the law imposes a duty upon them to account for their dealings with the property under their control. These accounts may be presented to the beneficiaries and to the court for approval. Accounts are presented for approval either voluntarily by the trustees or when trustees are compelled to do so by any person appearing to have a financial interest in the estate or trust. Accounts are passed before the court by way of application. The accounts are presented in a manner prescribed by Rule 74 of the Rules of Procedure which rule also sets out those upon whom the application must be served; the time for delivery of a Notice of Objection to Accounts by any person who is unsatisfied with the accounts or the claim for compensation by the trustee; the manner in which the application proceeds if no objections to the estate accounts are made; and, requests for increased costs on the application.
Objections to accounts arise when accounts are not properly prepared in accordance with Rule 74 so that it is difficult to understand the various transactions. Objections can also arise where beneficiaries object to a particular disbursement made by the personal representative, trustee, guardian or attorney from the estate or the amount of the disbursement. A person having a financial interest could have an objection relating to the choice of investments or rates of return on funds invested in the estate or trust. Finally, the amount of compensation claimed by the personal representative, the allowance of which is in the discretion of the court, is often the basis for disagreement between beneficiaries and trustees.
WILL INTERPRETATIONS
On occasion the intentions of a testator as expressed in his or her will are unclear. This may be a result of poor drafting or a change in circumstances following the execution of the will that was not contemplated by, or addressed, in the will. An estate trustee should not administer this unclear will in a manner that he or she believes was intended by the testator. Rather, an estate trustee, or any person with an interest in the estate, may apply to the Court to have the will construed. In interpreting the will, the objective of the court is to ascertain the actual or subjective intention of the testator respecting the disposition of his or her property. The court of construction must give consideration to the testator’s peculiar and unique use of language in the will as well as all of the circumstances surrounding the testator’s life, which may have impacted upon the type of disposition actually intended by the testator in the will.
A will interpretation is commenced by application pursuant to Rule 14.03 of the Rules of Civil Procedure. The application is supported by evidence in the form of affidavit. Direct evidence of the testator’s intention is generally inadmissible.
Schnurr Kirsh Oelbaum Tator LLP lawyers are often called upon to given written legal opinions to estate trustees and to interested beneficiaries as to the possible meaning of provisions of wills and are regularly asked to apply to the court to have a will interpreted where there is disagreement among all parties having an interest in an estate as to its meaning.
DEPENDANT SUPPORT CLAIMS
Legislation permits a testator freedom to select the beneficiaries of his or her estate except that a testator has a positive obligation to make adequate provision for the support of his or her dependants. Pursuant to Part V of the Succession Law Reform Act (Ontario) a dependant may initiate proceedings seeking an award from the estate based upon a claim that he or she has not been adequately provided for.
A “dependant” is defined by legislation to include: a spouse, or common-law spouse; same sex partner, parent, child or sibling of the deceased to whom the deceased was either providing support or was under a legal obligation to provide support immediately before death. “Parent” and “child” are given extended definitions and can include those holding themselves out as parents although not a natural or adoptive parent and adult children and grandchildren.
Dependant support proceedings are commenced by application. An application for dependant support must be commenced within six months of the issuance of a Certificate of Appointment of Estate Trustee. An application may be commenced after the six month limitation period has expired with leave of the court where the court considers it proper to do so and only in respect of property that has not been distributed. Within the application an applicant may move before the court for interim support. An application is supported by affidavit evidence which evidence typically includes a detailed explanation of the support that was provided to the applicant during the deceased’s lifetime or an explanation of the legal obligation to provide support. Generally, an applicant will provide a financial statement and budget demonstrating his or her need for support.
CLAIMS FOR SERVICES TO AN ESTATE
Individuals often provide services to a deceased person upon an expectation that the individual will be remunerated or will benefit upon the deceased’s death. These services often include providing for the deceased’s personal care during periods of illness or infirmity. On occasion, a deceased may indicate a willingness to provide some benefit to the caregiver in his or her will in recognition of the services that are being provided by the caregiver. In some cases, although the representations are made and the services are delivered, the deceased fails to provide for the promisee in his or her will.
Under such circumstances the disappointed promisee may advance a claim against the deceased’s estate. Such a claim may be for money commensurate with the services provided by the promisee to the deceased. Alternatively, the person who provided services may seek a declaration that a portion of the deceased’s estate, or all of the deceased’s estate, is held on a constructive trust for the promisee so as to avoid the deceased’s estate from being unjustly enriched by the services provided to the deceased for which the caregiver was not compensated.
FAMILY LAW ACT CLAIMS
When death causes the separation of spouses, the Family Law Act provides certain rights to a surviving spouse. Whether an estate passes pursuant to a will, an intestacy or a partial intestacy, a surviving spouse must determine whether he or she could benefit from making an election to receive his or her entitlement following an equalization of net family properties of the deceased and surviving spouse rather than accepting his or her interest in the deceased spouse’s estate. In the event the surviving spouse wishes to equalize net family property an election must be made, and all statutory requirements complied with, within six months following the deceased’s death. Although there is a very short limitation period in which a surviving spouse is required to make an election under section 5 of the Family Law Act, a spouse may move before the court to extend the time for making an election. Such extensions are sought where there is insufficient information known to the surviving spouse to allow him or her to decide whether to make an election within the prescribed time.
The decision whether to elect to equalize net family property or to accept an interest in an estate as set out in a will or upon intestacy is one that should only be made after careful analysis of entitlements to be received under a will or pursuant to an intestacy; a review of any marriage contract including the circumstances in which the marriage contract was entered into; and, after careful consideration of the nature of each spouse’s property including, but not limited to: the nature of each spouse’s assets and the manner and the time when the assets were acquired.
An application for equalization of net family property might be commenced in conjunction with an application for dependant support under the Succession Law Reform Act, where it is possible that the equalization payment will not afford adequate provision for the support of the surviving spouse from the deceased spouse’s estate.
VARIATIONS OF TRUST
A trustee of an inter vivos or testamentary trust is required to carry out his or her duties in accordance with the provisions of the trust document, applicable legislation and principles of common law. A trustee has no authority to vary the terms of a trust unless the trust document itself permits the trustee to vary the terms. A trustee who varies the terms of a trust without authority is in breach of trust and his or her fiduciary duties.
There are several methods of varying a trust where all persons who are absolutely entitled to the trust assets have requisite capacity and are 18 years of age or older, agree, the trust can be varied or wound up. The court has the inherent jurisdiction to aid in the preservation of the trust and to support the administration of the trust assets by trustees. Variations are possible in certain cases involving charitable matters pursuant to section 13 of the Charities Accounting Act, without application to the court. However, where beneficiaries of a trust are not able to provide consent to a variation or termination of a trust themselves, as a result of minority, or other legal disability, the court may approve a variation of the trust on behalf of the minor or person under legal disability. The court will only vary the trust in accordance with the Variations of Trusts Act where there is a benefit to all persons on whose behalf the court is being asked to provide consent.
In Ontario, The Children’s Lawyer represents the interests of minors and unborn potential beneficiaries of a trust. A variation requires the support or non-opposition of The Children’s Lawyer. Generally, a draft deed of arrangement varying the trust is submitted to The Children’s Lawyer for approval before the application is commenced. Once the requirements of The Children’s Lawyer have been satisfactorily addressed, a deed of arrangement is entered into by all capable adult beneficiaries. The deed of arrangement provides that it shall only become effective upon being approved by court order. The application is accompanied by a supporting affidavit. The affidavit must summarize all of the relevant facts and set out the benefit of the class of beneficiaries on whose behalf the court is being asked to approve the variation.
MENTAL INCOMPETENCY LITIGATION
In Ontario, several statutes stipulate who may make decisions for incapable persons, and the manner in which decisions are to be made respecting the personal care and property of individuals who are incapable of managing their own personal care and/or property. These statutes include the Substitute Decisions Act; the Health Care Consent Act; and the Powers of Attorney Act. An individual may plan for his or her own capacity by executing a power of attorney for personal care and a continuing power of attorney for property in favour of his or her own personal choice of substitute decision maker. The document must be prepared in accordance with the statutory requirements set out in the Substitute Decisions Act.
Where an individual has not made a grant of power of attorney or, if the power of attorney is found deficient or the attorney is unable or unwilling to act, an application may be made to the court for the appointment of a guardian of the person and guardian of property for a mentally incapable person. In certain instances the Public Guardian and Trustee may become the statutory guardian of an incapable person’s property and application may be made by an individual to replace the Public Guardian and Trustee as statutory guardian of property.
APPLICATIONS UNDER THE SUBSTITUTE DECISIONS ACT
Guardianship applications are made to the Superior Court of Justice. Applications are supported by detailed affidavit evidence setting out the reason that the application for guardianship is being sought, including evidence as to the incapacity of the person for whom guardianship is sought and a detailed plan for the care of the individual’s person or property. The plan for the care of the incapable person’s property is called a “management plan”. The plan for making personal care decisions is called the “guardianship plan”. Management plans and guardianship plans must be submitted to the Public Guardian and Trustee for her approval. The management and guardianship plan forms part of the guardianship order. Medical evidence, while not required by statute, is a practical necessity on any application to the court for the appointment of a guardian. Capacity assessments of the individual for whom guardianship is sought are frequently obtained from a designated capacity assessor.
A court will only appoint a guardian where the court is satisfied that the person is incapable of managing his or her property or making personal care decisions and, as a result of being incapable, the person requires decisions be made on that person’s behalf by a person authorized to do so. If there is any alternative to the appointment of a guardian that is less restrictive to that person’s decision making rights, the court is directed by legislation to adopt the less restrictive means.
POWER OF ATTORNEY DISPUTES
A person, while capable, may grant and revoke powers of attorney freely. However, the Substitute Decisions Act stipulates what a person giving a power of attorney must comprehend in order to have the requisite capacity to give a power of attorney. At times there are disputes between attorneys under powers of attorney granted at different times during the grantor’s lifetime as to which power of attorney is valid. Similarly, a person may revoke a power of attorney where he or she does not agree with decisions that are being made in respect of his or her person and property by the named attorney. The attorney in this instance may take the position that the grantor lacks capacity to revoke the power of attorney.
Where there are multiple attorneys named there may be disputes as to the management of property or personal care decisions. Attorneys may be called upon to account for their management of property by the Grantor, the Public Guardian and Trustee or by any other person with leave of the court.
MEDIATION AND ARBITRATION
Mediation is one way for people to settle disputes outside of court. In mediation, a neutral third party (the mediator) helps the disputing parties resolve the conflict. A mediator, unlike a judge, does not decide the case or impose a resolution. The mediator’s role is to help the people involved in the dispute to communicate and negotiate with each other in a constructive manner and to find a resolution based on common understanding and mutual agreement. Mediation allows for creative solutions to disputes in a way that is not possible at a trial. Rule 75.1 requires all parties involved in estate disputes in certain jurisdictions in Ontario, including Toronto, to attend at a mandatory mediation session. Where not mandatory, parties frequently attend mediation sessions voluntarily. Mediation allows for a quick, cost effective, creative and private way of resolving an estate dispute.
Arbitration is a legal alternative to litigation whereby the parties to a dispute agree to submit their respective positions (through agreement or hearing) to a neutral third party (the arbitrator or arbiter) for resolution.
Felice Kirsh has acted as a mediator for 15 years and is available to conduct mediations throughout Ontario.
ESTATE ADMINISTRATION
A personal representative of an estate has the obligation to carry out the terms of the deceased’s will or to administer and distribute the deceased’s estate in accordance with statutory requirements in the event of an intestacy. A personal representative must take steps as soon as is possible following the death of the person whose estate is the subject of the administration to:
(a) arrange for the burial or other disposition of the remains of the deceased;
(b) ascertain all assets and liabilities of the deceased including advertising for creditors where appropriate;
(c) apply to the Superior Court of Justice, where necessary, for a Certificate of Appointment of Estate Trustee with a Will or a Certificate of Appointment of Estate Trustee without a Will;
(d) realize the estate assets;
(e) determine the lawful distribution of the estate including ascertaining heirs at law;
(f) file all necessary income tax returns and arrange for the satisfaction of all liabilities including income tax liabilities;
(g) respond to any challenges or claims against the estate by beneficiaries or third parties;
(h) maintain and provide to the beneficiaries and/or heirs estate accounts reflecting all of the receipts and disbursements made during the course of the administration of the estate;
Generally, a personal representative will meet with a lawyer shortly after the death of the deceased to review his or her duties. The administration of the estate includes some lawyer’s work for which the estate trustee may be properly reimbursed out of the estate. This work may include preparing an application for a Certificate of Appointment of Estate Trustee; preparing transmission applications necessary for the sale of property, providing advice to the estate trustee with respect to the estate trustee’s duties. The legal fees paid by a personal representative to a solicitor are subject to review by the court of the estate accounts.
ESTATE PLANNING
Proper estate planning is crucial. It is surprising how many individuals delay the execution of, or never execute, a will or other testamentary instrument. In the event an individual dies without a written estate plan the Succession Law Reform Act will determine not only who will administer an estate, but also who will be entitled to the deceased’s assets. This often leaves the estate open to claims from those who expected to receive a portion of the estate or from those who have a valid claim against the estate.
Often when confronted with a serious illness or life threatening circumstances, individuals will prepare their own wills. These are sometimes declared invalid as they fail to comply with legal requirements or the individual is found to have lacked the capacity to make such a will, or has been unduly influenced. Quite often such wills are ambiguous, requiring a court to review and interpret the will in an attempt to ascertain the testator’s intention. This litigation is time consuming and expensive.
Having a qualified professional prepare such estate planning documents including a will, powers of attorney, trusts and other testamentary instruments can avoid these problems. In addition, the professional can provide advice and direction to ensure that taxes are minimized or in some cases avoided on death. The professional will also help to ensure that precautions are taken to reduce the chances that a beneficiary can upset the testator’s estate plan, and to ensure that details of the testator’s assets remain outside of the public domain.
The cost of properly prepared wills, powers of attorney and other such documents is modest compared to the cost of litigation and unnecessary taxes if no plan is put in place or if such documents are found to be deficient or invalid.
How to find us
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