Category: Uncategorized

What I’m Reading: Interesting Estate Litigation Articles for April 2024

May 3, 2024

The following is a round-up of noteworthy articles published this month on estate litigation and related issues:

  1. Gabriella Banhara of WEL Partners (Ontario) discusses the issue of pets and estates, with reference to a recent Ontario decision: https://welpartners.com/blog/2024/04/pets-and-estates-the-recent-decision-of-carvalho-v-verma/
  2. Ian Hull and Chigozie Enwereuzo of Hull & Hull LLP (Ontario) consider the concept of where an estate trustee “resides”, and why that matters: https://hullandhull.com/Knowledge/2024/04/where-does-an-estate-trustee-actually-reside/
  3. Onyx Law Group discusses a number of questions about family and separation, and estate issues: https://onyxlaw.ca/separated-but-not-divorced-inheritance/
  4. Estate litigation in the news: there have been a number of articles relating to O.J. Simpson’s estate, in particular whether the Goldman and Brown families will be able to collect on their civil judgment: https://www.cbc.ca/news/world/oj-simpson-estate-victims-explainer-1.7171644
  5. Doreen So, also of Hull & Hull LLP, writes about estate issues in the Netflix series “The Gentlemen” in a pair of posts: https://hullandhull.com/Knowledge/2024/04/the-gentlemen-primogeniture-and-intestacies-in-ontario/ and https://hullandhull.com/Knowledge/2024/04/the-gentlemen-enforceability-of-pre-death-contracts/

Happy reading!

Wills Variation Claims by Adult Independent Children

February 16, 2024

In B.C., a spouse or child of a deceased person (the “will-maker”) can bring an action to vary a will if it fails to make adequate provision for their proper maintenance and support. This includes adult independent children.

When determining whether a will-maker has made adequate provision, the Court will consider the will-maker’s legal and moral obligations. Legal obligations are owed to a spouse or dependent children and do not usually factor into the analysis of claims by adult independent children (unless the child contributed to the estate).

Moral obligations are found in society’s reasonable expectations of what a judicious person would do in the circumstances by reference to contemporary community standards. Moral obligations to adult independent children are “tenuous”, but there may be entitlement if the size of the estate justifies it.

The moral obligation may be negated where the will-maker has just cause, consisting of objectively valid and rational reasons, to disinherit the child.

Cases in B.C. have identified factors to be considered when determining the existence and strength of a will-maker’s moral duty to independent adult children:

  • relationship between the testator and claimant, including abandonment, neglect, and estrangement by one or the other;
  • size of the estate;
  • contributions by the claimant;
  • reasonably held expectations of the claimant;
  • standard of living of the will-maker and claimant;
  • gifts and benefits made by the will-maker outside the will;
  • will-maker’s reasons for disinheriting;
  • financial need and other personal circumstances, including disability, of the claimant;
  • misconduct or poor character of the claimant; and
  • competing claimants and other beneficiaries.

Every case is fact specific.

These principles were recently applied in Bautista v. Gutkowski Estatei 2023 BCSC 1485. In Bautista, the will-maker had one child, a son. The will-maker moved to Canada from the Philippines when her son was three months old. She abandoned him, and despite making a life for herself in Canada, she did not petition to have him join her. She did provide for his support by giving money to her parents, who were raising him. At times they had a close relationship, but as her son became an adult, the will-maker disapproved of the lifestyle she was being told that he was leading (although it appears she was being misled). This lead to an estrangement that was the will-maker’s choice (and her son attempted to reach out to her by email and text).

The will-maker made a will leaving 25% of her estate to her son, and 75% to her sister and her niece. The estate was valued at $881,119.

The Court considered the various factors, including the son’s modest standard of living in the Philippines. The Court varied the Will to provide that the son will receive 60% of the estate, instead of only 25%.

Removal of Executor for Conflict of Interest

January 26, 2024

An executor may be removed if their position as personal representative of the estate is in conflict with their personal interests.  A court can order the removal of an executor pursuant to the Wills, Estates and Succession Act, the Trustee Act, or the court’s inherent jurisdiction.

A will maker is entitled to choose their executor, and this choice is entitled to deference.  A court should only interfere with the will maker’s choice of executor if there is clear and cogent evidence that the executor’s acts or omissions are of such a nature to endanger the administration of the estate.  The primary consideration is the welfare of the beneficiaries collectively.

There are certain categories of misconduct that may warrant removal: endangerment of trust property, want of honesty, want of property capacity to execute duties, and want of reasonable fidelity.

An executor may also be removed if they are in a conflict of interest, as this this may represent a want of fidelity.  An executor is a fiduciary and has a duty to protect the best interests of all of the beneficiaries.  If this duty is in conflict with their personal interests (for example, their interests as a beneficiary or a creditor of the estate) then this may warrant their removal.  Even a “perceived” conflict of interest may warrant removal.

This must be balanced against s. 151 of the Wills, Estates and Succession Act, which gives certain persons the right to seek leave to commence proceedings on behalf of the estate, often in circumstances where the personal representative is in a conflict of interest with respect to a potential claim and is unlikely to commence proceedings (i.e. to pursue a claim against their personal interests).

The B.C. Supreme Court recently considered this issue in Thomson (Re) 2023 BCSC 1591.

In Thomson, the Court made clear that they were not deciding issues relating to the beneficiaries not getting along and being suspicious of one another.  The Court was to determine whether the executor was in a conflict of interest such that she was unable to act in the best interests of all of the beneficiaries.  The Court held that by commencing actions against the estate, the executor could be liable to pay for costs to the estate.  This put her in a “disabling” conflict of interest.

Further, the executor’s “steadfast” position regarding debts owed by one of her siblings to the estate showed that she could not be neutral in order to act in the best interests of all beneficiaries.  For example, she refused to consider whether this sibling owed rent to the estate, and by refusing to even look into that issue, she endangered the administration of the estate to the detriment of the beneficiaries.

The executor argued that if other beneficiaries wanted to pursue her sibling for rent, they could apply for standing under s. 151 to pursue the claim on behalf of the estate.  The Court held that s. 151 did not absolve the executor of her conflict of interest.

The executor was removed, and as a result of the beneficiaries’ inability to cooperate and continuing mistrust (they were siblings), an independent trust company was appointed.

This decision is a reminder of the importance of an executor remaining neutral and even-handed,.  An executor cannot simply point to s. 151 and the ability of a beneficiary to apply for standing to take the actions that the executor should be taking.

What I’m Reading: Interesting Estate Litigation Articles for July 2022

July 29, 2022

The following is a round-up of noteworthy articles published this month on estate litigation and related issues:

  1. Stan Rule at Sabey Rule LLP (Kelowna) and Albert Oosterhoff at WEL Partners (Toronto) both discuss a recent Supreme Court of Canada decision which concluded that taxpayers could not rely upon equitable rescission of transactions to avoid unintended tax consequences: Rule of Law: Collins Family Trust (rulelaw.blogspot.com) and Rescission Not Possible to Avoid Adverse Tax Consequences | WEL Partners Blog
  2. This month, lawyers at at Hull & Hull LLP (Ontario) posted various articles about digital assets and death, including: https://hullandhull.com/Knowledge/2022/07/digital-assets-planning-considerations-for-the-drafting-solicitor/, https://hullandhull.com/Knowledge/2022/07/digital-assets-are-we-keeping-pace/ and https://hullandhull.com/Knowledge/2022/07/apple-digital-legacy/
  3. James Steele at Robertson Stromberg (Saskatchewan) discusses a recent decision of the Saskatchewan Court of Appeal which serves as yet another reminder to put something in writing when you add a family member on title to your property (in this case, a parent adding a child to title), so that your intentions are clear: Saskatchewan Estate Litigation Update: Martin v Martin, 2022 SKCA 79 | Saskatchewan Estate Law Blog (skestatelaw.ca)

Happy reading!

What I’m Reading: Interesting Estate Litigation Articles for June 2022:

June 30, 2022

The following is a round-up of noteworthy articles published this month on estate litigation and related issues:

  1. Albert Oosterhoff at WEL Partneres (Toronto) discusses the presumption of resulting trust in the context of beneficiary designations: https://welpartners.com/blog/2022/06/designation-of-beneficiaries-and-the-presumption-of-resulting-trust/
  2. Mohena Singh at Hull & Hull LLP (Ontario) writes about a recent Ontario case which considers trustee discretion: https://hullandhull.com/Knowledge/2022/06/when-may-a-court-interfere-with-a-trustees-absolute-discretion/
  3. Joanna Lindenberg at de Vries Litigation LLP (Ontario) discusses retrospective capacity assessments – obtaining an expert opinion after death on the issue of whether the deceased had testamentary capacity at the time they made their will: https://devrieslitigation.com/retrospective-capacity-assessments/
  4. Mohena Singh at Hull & Hull also discusses the issue of the appropriate jurisdiction when there is a global estate: https://hullandhull.com/Knowledge/2022/06/france-monaco-ontario-where-to-seek-relief-in-a-dependant-support-claim-involving-a-global-estate/
  5. Stan Rule at Sabey Rule LLP (Kelowna) identifies a great resource for issues relating to elder abuse and neglect: http://rulelaw.blogspot.com/2022/06/practical-guide-to-elder-abuse-and.html for the post, and http://ccelderlaw.ca/ for the resource

Happy reading!

Bergler v. Odenthal – counsel comments featured in this month’s issue of Take Five

August 4, 2020

We were counsel in Bergler v. Odenthal 2020 BCCA 175.  I discussed this recent decision from the B.C. Court of Appeal in a post found here.

I recently provided my commentary on the case in the July 2020 edition of Take Five, a monthly publication highlighting the most interesting civil cases emerging from the B.C. Court of Appeal.  Here is an excerpt from my comments:

When a deceased person leaves a will, a disappointed beneficiary may have a variety of available claims, including challenges to the validity of the will and, of course, wills variation claims. When a deceased person dies intestate, it may seem at first blush that a disappointed beneficiary has no recourse, as the legislation sets out a non-discretionary scheme as to how the estate is to be distributed.

However, in Bergler v. Odenthal 2020 BCCA 175, there was a remedy available: the secret trust.

As the Court of Appeal notes, secret trusts are “rarely encountered today” and this will likely continue to be the case. There is considerable risk in relying upon a secret trust to carry out your testamentary intentions. The person who would otherwise receive your assets (whether by will or intestacy) will directly benefit from denying the existence of a trust after your death Or, as happened in Bergler, the trustee make seek to add a “clarification” to the terms of the trust, which would postpone his obligation to distribute the assets until his own death.

You can read my comments in their entirety in this month’s issue of Take Five, and the discussion was also featured in an article on Slaw, Canada’s online legal magazine, which can be found here.