The Dead Files

By HONEST ALF Dick – the Little Guy Lawyer

More “bits and pieces” about Wills.

I’ve told you that a Will has to have witnesses – my bad - I am correct in general terms but (in law, there’s always a “but”) it is possible to make a valid Will in Ontario without witnesses if the Will is “wholly” in the Testator’s own hand-writing and signature.  It’s call a “holograph” Will.

Now, I’m not suggesting that you prepare one just to save money – I’m told that one of the favourite toasts at lawyers’ dinners is to the homemade Will because it generates so much litigation due to vague and contradictory language – but a holograph Will can be useful in certain situations.

I recall one case where a farmer was pinned under his overturned tractor, way out in the field where nobody could see or hear him, and, knowing that he was dying, he scratched a holograph Will into the paint of the tractor fender, and it was accepted as a valid Will.  Can you imagine the Judge’s reaction when they brought the tractor fender into Court as an Exhibit?

So, while this is a possibility, don’t wait until you are pinned under a tractor to draw your Will – go see your lawyer.  He or she won’t bite you, I promise.

By Barrie Hayes, Partner 

As our society grows  older the increasing incidence of dementia and Alzheimer’s have led to a corresponding increase in  the court appointments of guardians of property and guardians of the person. 

In a situation where a person, because of the onset of mental illness, dementia or otherwise becomes incapable of managing his or her property or of making decisions involving his or her health care unless the person, while he or she was capable, has executed a continuing power of attorney for property or a power of attorney for personal care, the incapable person will require a court-appointed guardian of property to manage his or her financial affairs and a guardian of person to make decisions of personal care on behalf of the incapable person. 

Anyone can make application for appointment as a guardian of property and  guardian of the person although the incapable person’s spouse and family are the most frequent applicants. More than one person can apply for these guardianship appointments. 

The presumption laws that a person is presumed capable to  manage his or her affairs or to make care decisions unless evidence  satisfies the court on the balance of probabilities that the person is incapable. An affidavit from the incompetent person’s physician or the report of a certified capacity assessor are  commonly accepted as evidence confirming incapacity. 

The person applying for appointment as guardian of property will be required to file an affidavit which among other issues ;addresses the factual background of the incapable person, whether the applicant is requesting a judgement dispensing with the requirement that the applicant post a security bond and confirming that the incapable person has been informed of the nature of the application. 

The applicant is also required to include as an exhibit a completed management plan which details the incapable persons assets, describes the care arrangement to be made for the benefit of the incapable person , the cost of such care arrangement and details the investment plan the applicant has made for the benefit of the incapable person. 

The appointment of guardianship of property provides the guardian with the authority to do anything in respect of property that the incapable person could of done, if capable, except make a will. The guardian of property is a fiduciary whose powers and duties are to be exercised and performed diligently with honesty and integrity and in good faith for the incapable person’s benefit. 

The guardian for property is required to keep careful accounts in administering the incapable person’s financial affairs and to have such accounts reviewed and approved by the court from time to time. 

The application for the appointment of a guardian of the person is similar in form to the guardianship of property but it’s focus is on whether the incapable person can make appropriate decisions for his or her care. The order appointing the guardian of the person will define the scope of the decisions for personal care of the incapable person to be made by the guardian of the person. 

The guardian of the person is required to execute his or her duties diligently and a good faith for the best interest of the incapable person. 

In situations where a person becomes incapable and no person is prepared to be appointed guardian of property or personal care for the incapable person the Office of the Public Trustee and Guardian will become the statutory guardian for the incapable person.

By Barrie Hayes, Partner

Anyone who has an employment pension should, following a separation, discuss with the pension plan the legal effect of the separation or a divorce on the status of the beneficiary the pension plan holder has designated on the pension.

The recently decided case of Carrigan v Quinn warns that beneficiary designations in pensions must be changed following separation to avoid potentially unintended results. In the Carrigan case Mr. Carrigan, the pension owner, was married in 1973 and separated in 1996. The Carrigans, following separation, did not enter into a separation agreement and were never divorced. Mr. Carrigan, in a will dated 1986 which he never changed ,named Mrs. Carrigan his estate trustee and sole beneficiary of the residue of his estate.

In 2000 Mr. Carrigan commenced a common-law cohabitation with Mrs. Quinn which relationship continued until Mr. Carrigan died in 2008.

The issue at trial was who, between Mrs. Carrigan and Ms. Quinn was entitled to receive Mr. Carrigan’s pension death benefit.

The trial judge found that at the time of Mr. Carrigan’s death the statutory definition of “spouse” in the Pension Benefits Act included both Mrs. Carrigan because she was legally married to Mr. Carrigan and Mrs. Quinn because she was living with him in a conjugal relationship for more than three years prior to his death.

After a review of the pension benefits act the trial Judge held that Mrs. Quinn was entitled to receive the pension death benefit.

Mrs. Quinn appealed the trial decision and, on appeal, the Court of Appeal held that Mrs. Carrigan and her daughters were the proper designated beneficiaries for the pension death benefit.

There was a dissenting judgment in the Court of Appeal decision which favored Ms. Quinn as the proper designated beneficiary. There has been much legal discussion following the decision questioning why the court did not declare both Mrs. Carrigan and Ms. Quinn co-beneficiaries of the death benefit. I suspect there may be future legislative changes to the Pension Benefit Act addressing the issue.

By Barrie Hayes, Partner

Mental or cognitive capacity is an issue which arises not infrequently in estate practice. At law, one is presumed capable unless and until this presumption is rebutted. One’s capacity may fluctuate with any given decision or task in question and from time to time.

The legal standard for capacity varies in relation to the legal task being undertaken by the person in question.

• Capacity to manage property 

This legal task arguably requires the highest level of capacity namely the ability to understand the information that is relevant in making a decision in the management of one’s property; and the ability to appreciate the reasonably foreseeable consequences of the decision or lack of a decision.

• Capacity to make personal care decisions

This task requires the ability by the person to understand the information that is relevant to making a decision relating to his or her own health care, nutrition, shelter, clothing, hygiene or safety; and the ability to appreciate the reasonably foreseeable consequences of the decision or lack of decision.

• Capacity to grant and revoke a power of attorney for property

This task requires that the person have knowledge of what kind of property he or she has and its approximate value; that the person demonstrate awareness of obligations owed to his or her dependents; that the person have knowledge that the attorney designated will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney; that the person have knowledge that the attorney must account for his or her dealings with the persons property; that the person have knowledge that he or she may, if capable, revoke  the continuing power of attorney; that the person appreciate that unless the attorney manages the property prudently its value may decline; and that the person appreciate the possibility that the attorney could misuse the authority given to him or her.

• Capacity to grant and revoke a power of attorney for personal care

This task requires that the person have the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and that the person appreciate that the person may need to have the proposed attorney make decisions for the person.

• Capacity to make a will, revoke a will, make a codicil and make a testamentary designation

These tasks require the person to demonstrate an ability to understand the nature and effect of making a will revoking same or making a codicil and testamentary designation; the ability to understand the extent of the person’s property in question; and the ability to understand the claims of persons who would normally expect to benefit under a will, codicil or testamentary designation of the person.

By Honest ALF Dick – the Little Guy Lawyer

Okay, we’ve talked about “what is a Will?”, we’ve talked about what a Will deals with and about its benefits and we’ve talked about what your lawyer needs to know about you and your assets. 

Now, let’s talk about some interesting (at least to me) bits and pieces about Wills

First about age:

Basically, you have to be over 18 years of age to make a Will but (as always with the law) there are exceptions.  Did you know that if you are under 18 years and are, or have been, married, you can make a Will?  I guess there may be some people out there who get married when they are legally minors – I doubt if there are many – but they can make a Will. 

A related situation is where you are under 18 and are “contemplating” marriage and if your Will says so (and if you do in fact marry that person), you can make a valid Will in Ontario. 

Maybe you better keep an eye on your under-age son or daughter – they may be contemplating! 

A member of the Canadian Forces can make a Will while under 18 – and so can a “mariner or seaman” (I guess that includes a “seawoman”) while at sea or in the course of a voyage.  Maybe that’s all the more reason to watch that underage child when she or he wants to go on a boat ride! 

Oh, by the way, that under age person who made that valid Will can also revoke it while under the age of 18 years.  That makes sense.

by Honest Alf, the Little Guy lawyer

This is a multi-part series - please read Part 1, Part 2 and Part 3 before reading this post.

“Now Is The Hour” as that old song goes – not to say “goodbye” but rather to get in to see your lawyer about preparing a Will. What do you have to do?

Basically, not a great deal.

If you are married, take your spouse with you because you won’t be able to withstand his or her cross-examination of you when you get home if you try to do it alone. The spouse should have a Will too and it’s more efficient for the lawyer to explain everything once to the two of you – besides, the lawyer will have to meet the spouse at some point in time if you try to give Will instructions on his or her behalf, just to make sure that the spouse agrees with what has been prepared.

Many lawyers like to review with you, in general terms at least, the nature, value and location of your assets – I know, I know, I did say that the Will deals with what you own at your death so why is it relevant to take about your current assets?  Well, you may have a villa in Spain, or a house in Florida – you may have an RRSP or life insurance  - and the lawyer might be able to help you better understand what goes to whom (and at what tax cost) on your death, if he or she has a good idea of your financial situation.

And that leads me to another point – tell your lawyer about your family situation. Are you in a second marriage? If so, is there a Marriage Contract? Do you have disabled children or other persons who are to be beneficiaries? If so, how about a Henson Trust?

The more you tell the lawyer, the better service you will receive – remember, what you tell your lawyer is confidential and he or she must not reveal it to anyone else. For once, you can tell your lawyer “keep quiet for a change” and he or she has to obey!

by Kathryn Whitehead, Associate

When helping clients with his/her estate plan, it is not uncommon to discover assets may be located outside of the Province of Ontario in a foreign jurisdiction(s).  Various issues can arise from having assets abroad, and lots of planning is required to ensure foreign owned assets are dealt with according to your wishes.

Most clients deal with their foreign and domestic assets in one will.  In these cases, individuals will visit their lawyer in their primary place of residence and draft a will that applies to all their assets, regardless of where they are located.  A will created in one jurisdiction and purporting to distribute assets located in another, may or may not be valid.  Validity will depend on whether it’s accepted pursuant to the laws of the jurisdiction in which the foreign asset is located.  For example, if Joe Smith owned a house in Barrie and a Condo in Florida, he may have his lawyer in Barrie draft a will that sets out his wishes for both the Barrie and Florida properties. His wishes for the Florida Condo will only be given effect if the will was drafted in accordance with Florida laws, which is unlikely if the Barrie Lawyer is unfamiliar with Florida law. 

Another approach is to create a separate will for each of the foreign-owned assets. Your lawyer will have to ensure that each will complies with the laws of the jurisdiction where the particular foreign asset is located.  This may require having your lawyer consult additional legal counsel in the particular jurisdiction to draft, or assist in drafting, the multiple wills. Mr. Smith, for instance, would need a Florida will (drafted in accordance with Florida laws) to sort out his wishes for the condo, and an Ontario will (drafted in accordance with Ontario laws) to sort out all his Ontario assets.  This can be a costly and complicated way of dealing with foreign assets in estate planning. 

A much more efficient alternative is to have your solicitor draft an ‘International Will’.  Ontario is party to the Convention Providing a Uniform Law on the Form of an International Will, (also known as the Washington Convention). Under Ontario’s Succession Law Reform Act, if a will is made in accordance with the rules prescribed by the Convention, and both the relevant jurisdictions are contracting parties, the Will is valid as between those parties regardless of where it was made, the location of the assets, or the residence of the testator.  Contracting parties include (but are not limited to) most Canadian provinces, the United Kingdom and the United States of America. This means that Mr. Smith could draft one international will, dealing with all his assets (wherever located), and so long as the foreign assets were located in a contracting party to the Convention, his wishes would have effect in that jurisdiction. 

Depending on where your foreign owned assets are located, an international will may be an estate planning tool you should consider. Did you recently purchase that Florida condo?  A summer cottage in Newfoundland?  Have investments in the UK?  If so, speak with your solicitor about whether an International Will can address your estate planning needs. 

By Honest Alf, the Little Guy Lawyer 

Progress is being made – now you know what a Will is and what it can do for you – but have you ever actually looked at one of these things? 

In olden days, a Will might be one or two pages but now they run 6, 7,  8 or more pages – I tell my friends that “A Will makes good bedtime reading because it will put you to sleep in no time”. So, why all the verbiage? 

The part of an ordinary Will where you appoint the Estate Trustee (the “Executor” to many of us) and set out your gift plan usually may take two or three pages – if you get into fancy Wills with a lot of Trusts and Insurance Designations, you’ll have far more pages – because I’m talking about the “little guy/girl” Will that most of us use. 

The extra pages beyond that contain a lot of guidelines, directives and powers that are there to help the Estate Trustee do his or her job. I call it “the Tool Box” and I know that not every tool is going to be needed in every estate but it does no harm to have all the “tools” available. Remember what I told you about the Will “speaking as of the day you die”? Good for you – we don’t know when you will die  nor do we know what your circumstances will be at death – who knows, you might have won the lottery and have pots of money to deal with at your death - and your Estate Trustee will thank you for furnishing him or her with a full box of tools. 

Therefore, don’t worry about all the wording – you are not paying the lawyer  by the word (although, as a lawyer, I sometimes wish I was so paid!) and so, I think there is merit in this motto “when in doubt, spell it out!”.

By Tracey Rynard, Associate

Many married couples mistakenly assume that if they don’t have a Will their spouse will, by default, inherit their estate. As with most things it is dangerous to ass-u-me.

The law governing intestacy (dying without a valid will) in Ontario  is stated in the Succession Law Reform Act (the “Act”). Legally married spouses of an intestate deceased with children are entitled to a preferential share of the estate only. That preferential share is equal to $200,000 plus either ½ of the remainder (if one child) or 1/3 of the remainder (if more than one child). To further complicate matters, the spouse of the intestate may also apply for equalization under the Family Law Act.

Common law families are increasingly common (pun intended) in Ontario. Though much law has developed to recognize common law spouses and to provide the same benefits to those couples as those legally wed, it is a reality that, in Ontario, common law spouses do not have rights to their deceased partner’s estate. Therefore, if you have a common law spouse and do not provide for them in a valid will, the common law spouse will not inherit under the Act. In the case of a common law couple with children, the children will inherit their deceased parent’s estate equally and the common law spouse is statutorily entitled to nothing.

Although a dependent common law spouse can apply to the court for a support award, this can be a time intensive and expensive process. In situations where the couple has cohabited for a lengthy time, spouses may be able to argue for ownership of property based on trust principles. For example, a common law spouse who contributed towards a home through mortgage or other bill payments may have a claim for a constructive trust, however the onus is on the surviving spouse to prove the contributions. Again this is a long and expensive proposition.

These difficult situations can become even worse where one of the common law spouses is still legally married to a previous spouse. Until legally divorced, a separated spouse is still a spouse under the Act and will be entitled to the preferential share of their separated spouse’s estate (or the entire estate if there are no children).

Same sex couples  are caught by the Act, as the Act defines a ‘spouse’ as two persons who are married to each other.

It is doubtful that a caring spouse would want to put their partner, their estate and their other beneficiaries through a protracted court battle. With a properly drafted and prepared Last Will and Testament all of these adverse consequences can be avoided. 

By Alf Dick, Honest Alf - the Little Guy Lawyer

(2nd in a series of 4 blog posts)

Okay, so you are convinced you need a Will (if not, please see Part 1!) – but you might ask” “what will it do for you and what will it cost?” 

First of all, you have to remember that a Will speaks as of the day you die, not the day that you sign it, and this means that it deals with the assets that you own on the day of your death. Obviously, if you know exactly when you will die and exactly what you will own on that day, preparing a  Will would be pretty simple. Since we don’t have such precise information, a Will must be worded in somewhat general terms – for example, “any residence which I own at my death” although it can also deal with specific items that you are reasonably sure that you will own at your death, such as a specific life insurance policy. Because the Will speaks as of your date of death, it can be changed by you at any time during your lifetime provided that you are mentally capable, and it is common advice that a person review his or her Will every 5 to 6 years in order to make sure that it deals with changes in your life. 

A major benefit of having a valid Will is the fact that you have appointed an Estate Trustee (we used to call this person “the Executor”) who has power to deal with your estate immediately upon your death – an Estate Trustee needs no Court Order in order to administer your assets and this can be a cost saving for your Estate. 

What else does a Will do for you? It makes sure that your assets are dealt with in accordance with your wishes – this is the “gift plan” – rather than have government legislation do it for you. And that gift plan can be as simple or as complicated as you desire. 

And this brings us to the cost of a Will. Of course, this will vary from one lawyer to another but it is possible to have one done for a few hundred dollars but more complicated Wills involving such things as Trusts or Insurance Designations will be more expensive. However, a Will properly prepared by an expert, such as a lawyer, can, in the long run, save money and perhaps taxes for your beneficiaries.

You can buy a Will kit and prepare your own Will but it’s like doing your own plumbing at home – you had better know what you are doing. It may be cheaper in the short term but, if you don’t do it correctly, you could cost your Estate a lot of money in legal expenses if its wording is vague or contradictory because, in that case a judge may have to decide what your Will really says. Our advice? Seek out an expert – a lawyer with experience in drawing Wills.