Toronto Estate Litigation Lawyer

Author: htE@55Viw

  • Beneficiary Forced to Pay Legal Costs of Estate Trustee During Litigation out of Inheritance

    Beneficiary Forced to Pay Legal Costs of Estate Trustee During Litigation out of Inheritance

    Naming an estate trustee during litigation (“ETDL”) is meant to reduce conflict and streamline the administration of an estate. However, problems can arise when a former estate trustee (and beneficiary) continues to cause conflict and frustrate the efforts of the ETDL. This was the case in the recent Ontario Superior Court decision Estate of Georgia Manos, deceased, 2023 ONSC 1962 (“Manos”) from Justice Gilmore.

    Background of the Case

    This case concerned an application to pass accounts by the ETDL and a notice of objection filed by beneficiary and former estate trustee, James Manos (“James”).

    The testator, Georgia Manos, died on April 10, 2012 and appointed her sons, James and Nicholas, as co-estate trustees. Following several proceedings between the estate trustees, Doug Lewis, a qualified accountant and lawyer, was appointed as ETDL for the estate on October 31, 2018.

    After being appointed, Mr. Lewis took steps to liquidate the remaining assets of the estate, including the testator’s property in Florida and the testator’s shares in PZ Cussons PLC, a company in the UK. Throughout this process, James repeatedly objected to and frustrated Mr. Lewis’ efforts. In an affidavit, Mr. Lewis described his appointment as the most difficult he had encountered in years and remarked that he would never have accepted the role if he had known about James’ conduct.[1] On December 2020, James brought an application to remove Mr. Lewis as ETDL. In an effort to respond to James’ concerns, Mr. Lewis brought a motion to pass the accounts for the estate.

    The following issues were disputed in this case:

    • How Much Compensation Should Mr. Lewis Receive for Acting as ETDL?

    Mr. Lewis sought $70,670.71 in compensation for acting as ETDL. Justice Gilmore agreed with Mr. Lewis’ proposed compensation.

    Subsection 61(1) of the Trustee Act asserts that a trustee “is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and abut the estate.” Subsection 61(3) of the Trustee Act allows a judge to award such compensation in passing the accounts of a trustee.

    In determining how much compensation to award, courts look to the following five factors:

    1. The total value of the estate;
    2. The care and responsibility involved in the estate’s administration;
    3. The time spent by the trustee in administering the estate;
    4. The skill and ability demonstrated by the trustee; and
    5. The success of the administration.[2]

    Applying these factors, Justice Gilmore held that Mr. Lewis was entitled to the amount he sought:

    1. This was not a modest estate; the approximate value was over $1.9 million.
    2. This was not a simple estate and involved the sale of property in foreign jurisdictions.
    3. Although Mr. Lewis did engage foreign professionals, this did not mean his recorded hours were excessive. His use of outside professionals was reasonable given that he lacked the authority to undertake transactions in the US and UK.
    4. Mr. Lewis demonstrated skill and ability in his administration of the estate. By liquidating the main assets of the estate, Mr. Lewis accomplished more in three years than the previous estate trustees accomplished in five, despite the toxic environment he had to operate  in.
    5. James claimed that the administration was not successful because significant interest was charged on the sale of the UK shares due to the delay selling the shares following the testator’s death. The Court rejected this assertion; there was no evidence that the original estate trustees took any steps to sell the shares in the five years following the testator’s death.

    Justice Gilmore was also critical of James’ conduct in the proceedings:

    James could have compelled a Passing of Accounts in 2019 and avoided a significant amount of the costs in issue in this matter. Instead, the matter apparently became a personal mission to grind down the ETDL. James’ proposed reduction in compensation by 25-30 percent is unwarranted and without foundation based on the test in Laing Estate and the facts found by this Court.[3]

    • Should Mr. Lewis Be Fully Indemnified for the Legal Fees He Incurred in Defending Against James’ Objections?

    Mr. Lewis also claimed $60,000 for legal fees on a full indemnity scale which he incurred defending himself against James’ objections. Again, Justice Gilmore agreed with Mr. Lewis’ position.

    Generally, estate trustees are entitled to be fully indemnified for reasonably incurred expenses, including the legal costs of an action reasonably defended.[4] Neuberger Estate v York also introduced the concept of “blended cost awards”, in which part of the costs are payable by the losing party and the remainder are paid by the estate. These awards are available at the court’s discretion if one or more of the following public policy considerations are engaged: “(1) where the difficulties or ambiguities that give rise to the litigation are caused, in whole or in part, by the testator; and (2) the need to ensure that estates are properly administered.”[5]

    Blended costs were awarded in the Divisional Court case, In the Estate of Stefanie Aber, deceased. In Manos, the litigation was not precipitated by the  testator’s actions.  The Court found that the Applicant was responsible for a portion of the costs as the losing party. However, the Applicant was entitled to request a Passing of Accounts and his conduct was not scandalous, reprehensible, or outrageous, and the litigation was not frivolous, therefore blended costs were appropriate. The Applicant was responsible for Mr. Lewis’ legal costs on a partial indemnity basis (approximately 60% of actual legal fees) with the remainder to be paid out of the funds of the estate.[6]

    Justice Gilmore rejected James’ argument that the costs of the litigation and his objections should be shared by all the beneficiaries. The other beneficiaries had nothing to do with the majority of the motions and objections brought by James and did not interfere with the sale of the Florida property as James had. Justice Gilmore held that “James must bear some responsibility for [his] irresponsible approach. The other beneficiaries should not be burdened with all of the costs in relation to what unfolded and which they were powerless to stop.”[7]

    However, per the approach in Aber Estate, James took a misguided approach to the litigation, but did not take a “scandalous or egregious position.”[8] Justice Gilmore held that a blended cost award was appropriate; James would be responsible for 60% of the legal costs from his share of the estate, while the remaining 40% would be payable from the estate in general.[9]

    Conclusion

    This case establishes that the compensation earned, and legal fees incurred by an ETDL while acting in their role, can be fully paid by the Estate, even in the face of strong objections from the beneficiaries.

    This case also has important implications for beneficiaries of an estate managed by an ETDL. One’s conduct does not have to meet the threshold of malicious, scandalous, or egregious to attract an adverse costs award. Even frivolous or misguided objections and actions against an ETDL can result in an adverse costs award, albeit one that is shared from the funds in the estate.  It is important to note that legal fees and expenses paid out by an estate ultimately hurt the beneficiaries; a testator does not leave funds for lawyers, a testator leaves funds for the beneficiaries.  Beneficiaries should be mindful of this when contemplating any type of litigation related to an estate.    

    Contact Derfel Estate Law for Estate Administration and Trustee Disputes

    At Derfel Estate Law, our estate litigation lawyers work with clients in all aspects of estate disputes, including trustee and executor issues and passing of accounts. We provide personalized assistance to beneficiaries, guardians, executors, trustees, and any other party involved in estate matters. If you are wondering how we can help you, please don’t hesitate to reach out online or call 416-847-3580 to speak with an estate lawyer who will work tirelessly to resolve your dispute.

    This blog was co-authored by David Derfel and law student, Leslie Haddock.

    [1] Estate of Georgia Manos, deceased, 2023 ONSC 1962 at para 35 [Manos Estate].

    [2] Toronto General Trust Corp v Central Ontario Railway (1905), 6 OWR 350 (HC) and endorsed by Laing v Hines, 1998 CanLII 6867 (ON CA).

    [3] Manos Estate, supra note 1 at para 101.

    [4] Brown v Rigsby, 2016 ONCA 521 at paras 11 and 14.

    [5] Neuberger Estate v York, 2016 ONCA 303 at paras 24-25.

    [6] In the Estate of Stefanie Aber, deceased, 2015 ONSC 5123 at paras 68-70.

    [7] Manos Estate, supra note 1 at para 114.

    [8] Ibid at para 115.

    [9] Ibid.

  • I Want My Daughter to Be Independent and Self-Sufficient – Can I Cut Her Out of My Will?

    I Want My Daughter to Be Independent and Self-Sufficient – Can I Cut Her Out of My Will?

    So you’re thinking about disinheriting your child. Contrary to what you and others might think, this does not make you a bad parent. Unlike in forced heirship regimes, children in Ontario have no legal right to inherit anything from their parents’ estates. You may disagree with their lifestyle, politics, finances, or simply desire to see them make their own way in the world without depending on you for support. Your testamentary freedom grants you the right to dispose of your estate however you choose. However, this right remains subject to various limitations from the courts and legislatures which might impact your ability to choose your beneficiaries. Here are several things you should keep in mind when considering whether to disinherit your child.

    Dependant Support Provisions

    A major limitation to testamentary freedom are dependant support provisions, which allow courts to interfere with your Will if you have not adequately provided for your dependants.

    Under section 58(1) of Ontario’s Succession Law Reform Act (SLRA), if a deceased has not made adequate provisions for the proper support of their dependants, the court can order that adequate provisions be paid out of the estate. Section 57(1) of the SLRAdefines a “dependant” as:

    (a) the spouse of the deceased,

    (b) a parent of the deceased,

    (c) a child of the deceased, or

    (d) a brother or sister of the deceased,

    to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.

    A “child” under the SLRAincludes a grandchild and “a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family.” This means that a “child” could include biological children, adopted children, and even stepchildren, in some circumstances.

    As such, per the SLRA, you cannot effectively disinherit any minor children, children you were supporting, or children you were legally obligated to support. If you fail to adequately provide for them, then your estate could be subject to a dependant support claim. But what about adult children who are not financially dependent on you?

    Adult Children

    Whether you can disinherit your adult child is more complicated. It is also highly dependent on what jurisdiction you live in as different provinces have different rules.

    While all provinces recognize support claims based on financial need, the Supreme Court of Canada also recognized the validity of moral claims which a child might have to their parents’ estate.[1] These principles were accepted to apply in Ontario in Cummings v Cummingsas factors to be considered when determining the amount and duration of support under section 62(1) of the SLRA.[2]However, there is no moral obligation in Ontario to include your child in your Will.[3]

    In Ontario, the definition of “dependants” is limited by financial need and courts can only consider moral obligations when determining how much support to award. There is no statutory entitlement for adult children to seek dependant support against their parent’s estate in Ontario.[4] In contrast, in British Columbia, courts can interfere and order support that is “adequate, just and equitable in the circumstances” for the testator’s spouse and children of any age.[5] This leaves Wills in British Columbia significantly more vulnerable to challenges from disappointed children. For instance, in Pascuzzi v Pascuzzi, the court found that the testator had a moral obligation to provide for his 32-year old daughter and awarded her 30% of his $1.8 million estate.[6]

    In practice, disinheriting your non-dependent adult child in Ontario has rarely, if ever, been interfered with by courts, as discussed in a previous blog. Courts have even upheld Wills which excluded children for discriminatory reasons. In Spence v BMO Trust Company[7], a father excluded his daughter from his Will after she had a child with a man of a different race. The Court found no discrimination on the Will itself and was unable to admit outside evidence of the testator’s discrimination. The court noted that:

    Absent valid legislative provision to the contrary, the common law principle of testamentary freedom thus protects a testator’s right to unconditionally dispose of her property and to choose her beneficiaries as she wishes, even on discriminatory grounds.[8]

    As adult children are not able to make a claim for support against their parent’s estate in Ontario, the next step for disinherited children would be to challenge the validity of the Will itself.

    What Can I Do To Prevent My Will from Being Challenged?

    Although applicants must meet a minimum evidentiary threshold to successfully launch a Will challenge, there are several things you can do to help prevent a Will challenge or decrease the likelihood of its success:

    • Document your reasons for excluding your child. This will show that the exclusion of your child is a reflection of your testamentary intentions and not a result of external influences or incapacity.
    • Ensure that your Will is properly executed and meets the formal requirements in Ontario. A Will must be in writing, signed by the testator (or someone else at the testator’s direction), and signed by two witnesses.
    • Document your mental capacity when making your Will. There are several ways you can do this.
      • You should make a Will with an experienced and reputable estate lawyer. They will ask questions to gauge your mental capacity and whether you are making decisions free from influence. They can also take notes during consultations, which can be used as evidence of your capacity.
      • Get a capacity assessment. Ontario’s Capacity Assessment Office provides training and certification to capacity assessors, who can conduct a capacity assessment and show that you have the requisite testamentary capacity.
    • Meet with your lawyer alone. If you come to the consultation with your child or another beneficiary under the Will, this could lead to challenges based on undue influence. When you are concerned that your Will may be contested, it is best to avoid even the appearance of impropriety.
    • Update your Will. By updating your Will and continuing to exclude your child, you will show that the decision to not include them was not made on a whim and remains a true reflection of your testamentary intentions.
    • Be honest with your child. While you may want to avoid an unpleasant and awkward conversation, it is best to be open about your plans to your children. Some children commence a Will challenge simply because they were surprised by their exclusion and did not understand their parent’s decision. This ensures that your child is not financially planning around an inheritance they will not receive and is not blind-sided by the news after your passing.

    Derfel Estate Law in Toronto Represents Clients in Contentious Estate Litigation or Estate Planning Matters

    These issues demonstrate the importance of consulting with a lawyer when preparing your Will. While it may be tempting to save costs by creating a Will without the assistance of a professional, it can result in serious consequences for your beneficiaries and estate.

    The experienced estate lawyers at Derfel Estate Law in Toronto act on behalf of executors to defend various estate litigation matters, including Will challenges and capacity concerns. To learn how we can assist you with estate planning or your estate litigation dispute, call our office at 416-847-3850 or contact us online.

    This blog was co-authored by Law Student, Leslie Haddock.

    [1] Tataryn v Tataryn Estate, 1994 CanLII 51 (SCC), [1994] 2 SCR 807.

    [2] Cummings v Cummings, 2004 CanLII 9339 (ON CA), [2004] CarswellOnt 99 at paras 40and 46.

    [3] For example, see Stewart v Stewart, 2021 ONSC 1222 at paras 125-127.

    [4] For example, see Shafman v Shafman, 2023 ONSC 1391 at para 1.

    [5] Wills, Estates and Succession Act, [SBC 2009] ch 13, s 60.

    [6] Pascuzzi v Pascuzzi, 2022 BCSC 907, aff’d 2023 BCCA 131.

    [7] Spence v BMO Trust Company, 2016 ONCA 196.

    [8] Ibidat para 75.

  • How Can I Account for Assisted Reproduction in My Estate Planning?

    How Can I Account for Assisted Reproduction in My Estate Planning?

    Assisted reproductive technology (ART) is a rapidly growing field and becoming increasingly popular with Canadian couples. ART procedures such as in vitro fertilization (IVF) (whereby an egg is fertilized in a laboratory setting and the resulting embryo is implanted into the uterus) and artificial insemination (whereby donated sperm is implanted directly into reproductive organs) represent the last hope for many couples to have a biological child of their own. With advancements in technology and the recent availability of government funding, ART is also becoming more accessible to couples. In Canada, there are over 7,000 children born annually from IVF alone. In 2014, one to two percent of live births in Ontario were the result of infertility treatments. However, ART presents numerous complications for estate planning.

    Consider the following example: Mary and John have been married for years and are having difficulties conceiving. They decide to undergo IVF and freeze several of their embryos. They eventually have two children from these embryos and are thinking of having another with the frozen embryos remaining. However, soon after the birth of their second child, they separate and John dies. Can Mary use the final embryos to have another child after John’s death? If the embryos are compromised, could Mary obtain some of John’s reproductive material after his death to create another? Would a child produced from these embryos be included as one of John’s “children” under his Will or inherit from his estate upon intestacy? This blog will seek to explore and address these issues.

    Consent Required to Use Your Reproductive Material After Death

    Under the Assisted Human Reproduction Act (AHRA), your reproductive material cannot be used to create an embryo without your written consent. After your death, it is illegal to remove your reproductive material to create an embryo unless you have given your prior written consent per the standards in the Consent for Use Regulations (Regulations) under the AHRA in regards to:

    • removal of your reproductive material after death; and
    • use of your reproductive material for one or more of the allowable purpose identified in the Regulations:
      • the reproductive use of the person’s spouse or common-law partner at the time of their death;
      • improving assisted reproduction procedures; or
      • providing instruction in assisted reproduction procedures.

    Under the AHRA, “consent” must be given:

    • by someone who is legally competent;
    • without undue pressure or the promise of some kind of benefit or reward; and
    • by someone who is fully informed of their choices and the implications of those choices. The donor must provide a written statement confirming the information they received and that they understood it.

    In essence, your reproductive material cannot be used without your prior written consent after your death and cannot be used to create a child with someone other than your spouse or common-law partner. Courts have strictly adhered to the legislative requirements for consent. For instance, in LT v DT Estate (Re), the British Columbia Court of Appeal rejected the application of a surviving spouse to extract her husband’s reproductive material post-mortem.[1] While the surviving spouse provided evidence that her husband wanted more children, the couple did not contemplate a scenario where his reproductive material would be used to create a child after his death. As such, she could not prove that he would have consented.

    There is an exception to this rule if your spouse can show that you would have consented. A court has given an applicant permission to use her husband’s reproductive material after his death when the couple was undergoing IVF treatments.[2] In this case, the couple had already began the process of IVF and the applicant provided extensive evidence that her spouse would have consented if he knew that his consent was required.

    Definition of “Child” Under the Succession Law Reform Act

    If a child is produced from your reproductive material after your death, then they may be considered your child under provincial legislation. Ontario’s Succession Law Reform Act (SLRA)’s definition of “child” includes “a child conceived and born alive after the parent’s death,” provided that the four requirements for “posthumous conception” in subsection 1.1(1) of the SLRA are met:

    1. Your spouse must give written notice to the Estate Registrar for Ontario that your reproductive material or embryo can be used to attempt to conceive a child to which you intended to be a parent.
    2. The notice must be given within six months of the your death.
    3. The child must be born within three years of your death. The Superior Court of Justice may extend this period under subsection 1.1(3) of the SLRA upon application if they consider it appropriate in the circumstances.
    4. A court must make a declaration under section 12 of the Children’s Law Reform Act which establishes your parentage of the posthumously-conceived child.
      1. The application to the court for a section 12 order cannot be made until the child is born or more than 90 days after the child’s birth, unless the court directs otherwise.
      1. You must have consented, in writing, to be the parent of the child with the applicant conceived posthumously through assisted reproduction and must not have withdrawn your consent before your death.

    If these conditions are met, then a child conceived after your death will be considered your child under the SLRA. This has several important implications, including:

    • Inheritance under intestacy. If you die without a Will, then your children have a claim to a share of your estate under intestate succession, subject to the preferential share given to your spouse. A child born alive after your death which meets the requirements under subsection 1.1(1) would likewise have a claim to your estate.
    • Dependant support claims. If you, with or without a Will, have not made adequate provisions for the support of your dependants, then the court, on application, can make an order for adequate support for your dependants from your estate. Children posthumously conceived which meet the requirements under subsection 1.1(1) are included as “dependants” under this section. However, an application for support for a child not yet conceived must be made within six months of your death.

    Tips for Estate Planning

    Here are some things you should do when estate planning to address the possibility of children born after your death:

    • Provide written consent for your reproductive material to be used. If you are in the process of using ART and you want your reproductive material to be available for use after your death, provide written consent to that end. This can be accomplished through documentation from the fertility clinic or including a provision in your Will addressing how your reproductive material should be used.
    • Revise your Will to exclude children born posthumously. If you want to exclude children born after your death from your Will, you can add a clause to that effect. Similar to a “born outside of marriage clause”, which protects estates from claims from children born outside of the testator’s marriage, you can exclude children born after your death. However, this will not preclude children born after your death from making support claims against your estate.
    • Ensure that your executor knows about your wishes. As assisted reproduction remains a relatively new field, your executor may not consider the possibility of children born after your death when administering your estate. To prevent any possible issues arising in the future, you should make it clear whether children born after your death is a possibility.

    Contact the Toronto Estate Lawyers at Derfel Estate Law

    These issues demonstrate the importance of consulting with a lawyer when preparing your Will. While it may be tempting to save costs by creating a Will without the assistance of a professional, it can result in serious consequences for your beneficiaries and estate.

    The experienced estate lawyers at Derfel Estate Law in Toronto act on behalf of executors to defend various estate litigation matters, including Will challenges and other estate disputes. To learn how we can assist you with estate planning or your estate litigation dispute, call our office at 416-847-3850 or contact us online.

    This blog was co-authored by Law Student, Leslie Haddock.

    [1] 2020 BCCA 328.

    [2] See KLW v Genesis Fertility Centre, 2016 BCSC 1621.

  • How Can I Plan My Estate to Protect A Beneficiary with a Disability?

    How Can I Plan My Estate to Protect A Beneficiary with a Disability?

    Estate planning is something that everyone should do; it provides you with peace of mind, decreases disputes among your family and friends, minimizes taxes payable by your estate, and helps you ensure that your loved ones are provided for. Estate planning becomes even more important if one of your loved ones has a disability. How can you ensure your loved one will be taken care after your death, especially if they are not able to financially provide for themselves? One way is through a registered disability savings plan (RDSP).

    This blog will discuss what a RDSP is, how it works, who can qualify as a beneficiary, what happens if the beneficiary predeceases you or you predecease them, and things to consider when drafting your Will.

    What is a RDSP?

    A registered disability savings plan (RDSP) is a registered investment plan designed to provide long-term financial security to people with disabilities by allowing the plan holder(s) to save money on their behalf. Since becoming available in 2008, over 150,000 RDSPs have been opened in Canada and an estimated 500,000 Canadians will benefit from the initiative.

    Depending on the mental capacity and age of the beneficiary, the plan holder of the RDSP, or the person who is authorized to open and manage the RDSP, can be the RDSP beneficiary themselves, a parent of the beneficiary, or someone legally authorized to act on behalf of the beneficiary. The holder does not have to be a resident of Canada.

    When you put money into a RDSP, the government matches your contributions. RDSPs are eligible for two main grants from the Federal Government:

    The government will pay a matching grant of up to 300% of your contributions to the RDSP based on the beneficiary’s adjusted family net income and the amount contributed to the RDSP. RDSPs can get a maximum of $3,500 in matching grants per year and up to $70,000 over the lifetime of the beneficiary.

    Unlike the CDSG, the CDSB is not dependent on contributions; the government will pay up to $1,000 a year into the RDSP for low-income Canadians with disabilities solely based on the beneficiary’s adjusted family net income. The lifetime maximum contribution is $20,000.

    All forms of government funding end the year that the beneficiary turns 49. This is because of the 10-year repayment rule. If the RDSP is terminated, the plan ceases to be a RDSP, or if the beneficiary dies, then all government grants and bonds contributed to the plan over the past 10 years must be repaid. As contributions cannot be made after the end of the year in which the beneficiary turns 59, any government funding paid after the year in which the beneficiary turned 49 would have to be repaid. While there is no limit to the contributions that you can make to a RDSP annually, the lifetime contribution limit is $200,000.

    Who Can Be a Beneficiary in a RDSP?

    An individual can be designated as a beneficiary of an RDSP if they meet the following criteria:

    • They are eligible for the disability tax credit (DTC)
      • The DTC is available for individuals with a severe and prolonged impairment in their physical or mental functions. This must be certified by a medical practitioner on Form T2201, which then must be approved by the Canada Revenue Agency.
    • They have a valid social insurance number (SIN)
    • They are a resident of Canada at the time that the plan is opened and when each contribution is made
    • They are under the age of 60

    A beneficiary can only have one RDSP at a time, but a RDSP can have more than one plan holder at a time and several over its existence. Anyone can contribute to a RDSP so long as they have written permission from the holder.

    If a parent opens a RDSP for a minor beneficiary, and if the beneficiary is deemed to be contractually competent by a physician and the issuer of the RDSP, which is often the bank that opened the account, then the beneficiary will become the plan holder upon reaching the age of majority. If a beneficiary has someone besides their parent appointed as their guardian of property, then that person would also replace the parent as the plan holder when the beneficiary turns 18.

    What Happens if the Beneficiary under the RDSP Predeceases You?

    If the beneficiary of a RDSP dies, then the RDSP must be closed by December 31 of the year after the beneficiary died. Any grants or bonds paid by the government into the RDSP in the 10 years prior to the beneficiary’s death must be repaid. However, any growth on that amount does not need to be repaid. Any remaining funds in the RDSP will be paid into the beneficiary’s estate to either go out in accordance with their Will or on intestacy. They will not be repaid to the contributors.

    Any growth, grants, and bonds are subject to tax from the beneficiary’s estate, but initial contributions are tax-free.

    What Happens if You Predecease the Beneficiary?

    Assuming that the plan holder is not also the beneficiary, then a new plan holder can be named after your death. All of the funds would remain in the RDSP and no assets from the plan will form part of your estate.

    Who becomes the next plan holder depends on the situation. If the beneficiary is declared contractually competent, then they can become the plan holder after your death. If not, then the RDSP will often pass to the executor of your estate until a legal guardian of the beneficiary is added as the plan holder. If the beneficiary has no legal guardian, then the court can appoint a guardian for property to act as the plan holder.

    The best practice in this situation is to anticipate that you will pre-decease the beneficiary and conduct your estate planning accordingly.

    What Should I Consider When Drafting My Will with a RDSP?

    There are several things you can consider incorporating into your Will and estate planning if you are a holder of a RDSP:

    • Confirm the identity of the beneficiary of the RDSP.
    • Provide for additional bequests to be paid into the RDSP if it is not fully funded at the time of your death.
    • If the beneficiary is your child, list you and your partner as joint plan holders. If you do so, the surviving spouse can become the sole plan holder when one of you passes. If you do not name your spouse as a joint plan holder, then they will not automatically become a plan holder.
    • If you are the sole plan holder, appoint a guardian who can be your successor. This will avoid issues of finding another legal guardian for the beneficiary or having the RDSP managed by a court-appointed guardian of property. You should also provide instructions on how the guardian can distribute the funds of the RDSP, such as paying the funds into a discretionary trust or distributing them directly to the beneficiary.
    • Direct that your registered assets, such as a Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF), rollover and be paid into the RDSP. This will defer taxation on the funds from these assets upon your death and they will only be taxed upon withdrawal from the RDSP. The maximum amount that can be rolled over is $200,000; any existing contributions or rollovers to the RDSP will reduce this limit. The government does not match any rollover amounts.
    • If you have any questions about RDSPs or incorporating them into your estate planning, you should consult with a professional.

    Contact the Toronto Estate Lawyers at Derfel Estate Law

    There are several things to consider when estate planning and preparing your Will. While it may be tempting to save costs by creating a Will without the assistance of a professional, the consequences can be grave for both your beneficiaries and estate. To learn how we can assist you with your estate planning or the administration of your estate, call our office at 416-847-3850 or contact us online.

    This blog was co-authored by law student, Leslie Haddock.

  • What does the Clause “I hereby Revoke All Wills and Testamentary Dispositions of Every Nature and Kind Whatsoever Made by Me Heretofore Made” Actually Mean?

    What does the Clause “I hereby Revoke All Wills and Testamentary Dispositions of Every Nature and Kind Whatsoever Made by Me Heretofore Made” Actually Mean?

    When you are doing Estate planning, most individuals want as little as possible to go through their Will. They want to minimize their Estate in order to save on Estate Administration Tax (probate tax).

    Imagine – you are considering drafting a new valid Will. You have already done one previously and ensured that your investments have a designated beneficiary – which allows these funds to go to the beneficiary outside the Will, and avoid tax.

    You have existing RRIF and TFSA accounts and have made all necessary provisions to ensure your beneficiaries will receive these funds upon your death.

    You’ve decided to make a new Will. In drafting the new Will, you consider that you have already designated funds to two of your children (with your RRIF and TFSA). As such, you decide that you will leave money in your Will, but only to your other two children.

    As with most Wills, the Will contains the clause: “I HEREBY REVOKE all Wills and Testamentary dispositions of every nature and kind whatsoever made by me heretofore made”.

    Does this clause act to remove the designations you did previously (as you intended) or does making a new Will revoke the designations and therefore result in two of your children not inheriting at all?

    As with most situations, the Testator/Testatrix is not available to give their intentions and it is left to the court to decide.

    Recently, in Alger v. Crumb[1], the court addressed the issue of whether this general revocation clause makes a Will not effective under s. 52(1) of the SLRA (Succession Law Reform Act) to revoke those designations. In analyzing this decision, the court reviewed these sections of the SLRA.

    Sections 51 and 52 of the SLRA governs designations and revocations under a Will on the death of the Testator/Testatrix. Section 53 deals with the payment of the benefit under the plan to the designated beneficiary and enforcement.

    Section 51 of the SLRA sets out the approach to designations in Ontario. Under s. 51(1), a person is able to designate a beneficiary of a benefit payable under a plan on the person’s death through two mechanisms: (a) a signed instrument, or (b) by Will.

    Where a party elects to designate a beneficiary by Will, the designation is only effective “if it relates expressly to a plan, either generally or specifically”[2]. A later designation will revoke an earlier designation where there is inconsistency.[3]

    In Alger[4], the court set out a test to determine the meaning behind this standard clause. The Court determined that, the first question in interpreting the clause is whether the term “testamentary dispositions” includes the designations of beneficiaries by instrument of the RRIF and TFSA plans. In MacInnes v. MacInnes,[5] the Supreme Court held that the designation of a beneficiary under an employee benefit plan to receive the proceeds of the plan on death is a testamentary disposition, the test being whether the intent of the maker was that the gift be dependent on the maker’s death. That case has been interpreted and relied on subsequently to apply to an RRSP beneficiary designation[6].

    In the case of Alger[7], the judge concluded that this first question is answered in the affirmative, the RRIF and TFSA plans are testamentary dispositions and therefore are included within the meaning of that term as used in the general revocation clause of the will.

    The remaining question is whether the revocation of “all…Testamentary dispositions of every nature and kind whatsoever” relates “expressly to the designation, either generally or specifically.” This statutory requirement has two components for the revocation to be effective: 1) it must relate to the designation, as opposed to the plan; and 2) it must relate to the designation “expressly…, either generally or specifically”.

    In Alger[8], the judge concluded that this clause, which is provided in a lot of Wills, does not relate to designations “expressly”. In other words, if a general revocation clause commonly used within a Will does not relate expressly to the beneficiary designations made by the testator/testatrix, for example for her RRIF and TFSA plans, it does not comply with s. 52(1) of the SLRA, and it is therefore not effective to revoke the designations of beneficiaries of the RRIF and TFSA plans.

    This decision assists people when drafting Wills and understanding that interpretation is sometimes left to a judge. Rest assured, named designated beneficiaries remain unless a new Will “expressly” excludes them.

    Contact the Estate Litigation Lawyers at Derfel Estate Law in Toronto for Guidance on Wills

    At Derfel Estate Law, our estate litigation lawyers have substantial experience helping clients manage probate and estate administration in Ontario. Often, executors do not have a complete picture of a testator’s debts until after their passing. Dealing with an estate that has significant debts can be confusing and frustrating. If you are an executor of an insolvent estate, contact our lawyers at 416-847-3850 or reach out to us online to find out how we can help

    Blog by articling student Kathleen Judd, BSc. (Hons), JD

    [1] Alger v. Crumb, 2023 ONCA 209 (CanLII)

    [2] Succession Law Reform Act, at s. 51(2)

    [3] Ibid, at s. 52(2).

    [4] Supra, note 1

    [5] MacInnes v. MacInnes, 1934 CanLII 16 (SCC), [1935] SCR 200, at para. 14

    [6] see Amherst Crane Rentals Ltd. v. Perring (2001), 241 D.L.R. (4th) 176 (Ont. C.A.), 2004 CanLII 18104, leave to appeal to S.C.C. refused, [2004] S.C.C.A. No. 430

    [7] Supra, note 1

    [8] Ibid

  • Estate Debts and Insolvency

    Estate Debts and Insolvency

    Stepping into the role of an executor often comes with many uncertainties. Navigating grief alongside estate administration can be a lot for one person to handle. Whether it is figuring out how to apply for probate or managing beneficiaries’ expectations, executors can face several challenges throughout an estate’s administration.

    In most cases, executors do not have full knowledge of the debts and liabilities of an estate before the testator’s death. An executor may face a difficult situation if an estate has incurred more debt than it has funds to settle, which can be frustrating for everyone involved.

    Can Debt be Inherited?

    In Ontario, a testator’s next-of-kin will not inherit, or be responsible for, the debts of their loved one. Unless, however, they are a personal guarantee or co-signer. Further, it is not the beneficiary’s responsibility to ensure the deceased’s debts are paid up unless they act as the estate trustee.

    An appointed executor will also not automatically inherit a testator’s debts unless they are a named party to the debt or liability. However, an executor or next-of-kin may be sought out by creditors of the deceased in an attempt to recover outstanding debt.

    How are Estate Liabilities Handled?

    The estate trustee is responsible for ensuring proper estate administration, including ensuring that the testator’s debts are appropriately managed. The estate trustee is responsible for ensuring that the existing debts of the deceased are paid to creditors. All debts should be paid from the estate before distribution proceeds. If a trustee distributes the estate to beneficiaries without ensuring all creditors have been paid in full, the trustee may be held personally liable for payment of the outstanding debts.

    Initial Executor Duties

    At the outset of the administration, the trustee must review the deceased’s will and complete the legally prescribed duties such as arranging a funeral, securing the deceased’s assets, applying for probate, paying taxes and debts of the deceased, distributing assets to beneficiaries and providing a final accounting. In most cases, the estate pays reasonable funeral-related expenses before paying other creditors.

    One of the first substantial undertakings a trustee must perform is to obtain a clear idea of the assets and debts of the deceased as quickly as possible. It is important to collect and total any debts which may exist as of the testator’s date of death. Generally, there are three types of debt categories: taxes, unsecured debts, such as credit cards and lines of credit, and secured debts, which are registered against something, such as a mortgage.

    Once the debts have been prioritized, the estate assets must be reviewed.

    Does a Trustee Have Options When Administering an Insolvent Estates?

    An estate may be considered insolvent if its debts exceed its assets. In some cases, the trustee must decide whether the estate should pay its debts or file for bankruptcy.

    Pursuant to the Bankruptcy and Insolvency Act, a trustee must administer an estate and file for bankruptcy. Either the estate trustee or creditors of the estate may file for a declaration of bankruptcy. If an estate is declared bankrupt, the court will proceed with bankruptcy proceedings per the Bankruptcy and Insolvency Act.

    If an Estate is Declared Bankrupt, is the Trustee Relieved of Their Duties?

    The next step in bankruptcy proceedings is to appoint an official receiver for the estate. After a trustee has renounced their role as trustee and a receiver has been appointed, a trustee is generally relieved of their duties and obligations with respect to estate administration.

    Bankruptcy proceedings can help ensure that an estate trustee is not held personally liable for issues that may arise throughout the administration, as the trustee is no longer involved in, or responsible for, the matter. The receiver will be responsible for collecting assets, administering the estate and repaying the creditors as much as possible in accordance with the law.

    In general, beneficiaries do not receive anything from an estate that has been deemed bankrupt unless there are exempt assets.

    What are Exempt Assets?

    Under the Execution Act, there are limited assets which may be exempt from seizure for debt repayment, including:

    • clothing;
    • personal items such as furniture, tools, food, and furniture up to a maximum value of $13,150;
    • a maximum of $10,000 equity in a property;
    • one motor vehicle worth up to $6,000;
    • pension plans and retirement savings plans; and
    • certain life insurance policies.

    However, it is important to ensure that any potentially exempt asset is owned outright by the testator, free of a lease, loan or lien. If an exempt asset is truly exempt, it can be distributed following the instructions in the will or the rules of intestacy.

    Delayed Payment and Liquidation Issues

    In some instances, a trustee may choose not to file for bankruptcy. However, bankruptcy proceedings may be the best option in situations where an estate has large debts, since the possibility of additional claims may occur and creditors are prioritized in an intricate manner.

    If a trustee knows that the estate will eventually have the funds to pay all debts in full, things may be tied up while assets are liquidated. However, issues with liquid assets can be significant and complicated; therefore it is recommended that a trustee seek legal advice to gain a better understanding of the legal obligations under The Trustee Act and Estate Administration Act,

    Contact the Estate Litigation Lawyers at Derfel Estate Law in Toronto for Guidance on Administering Insolvent Estates

    At Derfel Estate Law, our estate litigation lawyers have substantial experience helping clients manage probate and estate administration in Ontario. Often, executors do not have a complete picture of a testator’s debts until after their passing. Dealing with an estate that has significant debts can be confusing and frustrating. If you are an executor of an insolvent estate, contact our lawyers at 416-847-3850 or reach out to us online to find out how we can help.

  • Validity of Will Upheld Despite Allegations of Capacity Issues

    Validity of Will Upheld Despite Allegations of Capacity Issues

    Estate litigation can involve highly contentious proceedings, particularly among family members. When a person, particularly a child, feels as though they have not been adequately provided for or have been left out of the Will, feelings can get hurt, and proceedings can become emotionally driven. That individual may then commence proceedings against the estate to challenge the validity of the Will in question or to raise issues regarding the testator’s capacity. However, these challenges are not taken lightly by the courts.

    This issue arose in a recent case before the Ontario Court of Appeal, where the deceased had disinherited two of her children, leaving one child as the sole beneficiary and estate executor. The testator’s daughter commenced an application seeking a declaration that the Will was invalid, which was initially dismissed by the Supreme Court of Ontario. The decision was appealed to the Ontario Court of Appeal.

    Mother dies of cancer, disinherits two of her three children

    In Di Nunzio v. Di Nunzio, the testator passed away at age 80 on July 20, 2018. She prepared a Will dated March 1, 2017, which appointed one of her daughters as sole beneficiary and executor of her estate. The testator expressly disinherited her other daughter (the appellant in this case) and son.

    The Court issued a certificate of appointment on October 23, 2018 to the executor. The appellant commenced an application on October 29, 2018, claiming that the testator’s Will was invalid based on suspicious circumstances, lack of capacity, and undue influence.

    Lawyer who drafted Will did not believe capacity was an issue

    In the years leading up to her passing and throughout her illness, the executor and the testator’s son were actively involved in their mother’s care, with the executor acting as the testator’s primary caregiver. The testator named the executor her power of attorney for personal care and property.

    In January 2017, the testator was referred to the lawyer who prepared her Will. The lawyer was not concerned about capacity when he met with and obtained instructions from the testator. The lawyer claimed that the testator was clear about how she wanted her estate distributed and believed that the executor would take care of the testator’s son with her share of the estate. Her choice to not include her other daughter (the appellant) was based on that daughter’s previous issues with drugs and money.

    Despite not being well enough to travel on the date scheduled to execute the Will at the lawyer’s office, alternative arrangements were made, and the testator appeared alert and her usual self.

    Testator and disinherited daughter had rocky relationship

    The testator had three prior Wills. A Will created in 2014 appointed both daughters as estate trustees, with a Henson Trust set up for the son. A subsequent Will in 2015 appointed the executor as sole executor, with the estate distributed equally among her three children. When the testator advised the lawyer that drafted the 2014 Will that she wished to remove one of her daughters as executor and beneficiary in her revised Will, he required her to submit to a capacity assessment. This decision was based on the daughter taking a large sum of money from the testator’s bank account without permission. Ultimately, the daughter (appellant in the current case) was removed as executor and power of attorney but remained a beneficiary.

    Evidence in both the son and executor’s affidavits stated that the appellant and her mother had a rocky relationship for many years due to her history of drug and alcohol abuse and issues with money. While the appellant did not deny these statements, she claimed that the relationship was amicable during the time period in question.

    Application judge held presumption of testator’s capacity not rebutted

    The disinherited daughter applied for an order from the Supreme Court of Ontario revoking the Certificate of Appointment and requiring that the Will be proved and declared invalid and of no force. She put forward three affidavits of her own, affidavits of two friends, and three expert reports of a handwriting examiner in support of her claim.

    The other daughter (the executor) provided an affidavit of her own and of the son, along with affidavits from the lawyer who drafted the testator’s Will and the two witnesses to the Will’s execution.

    The Court began by referring to the decision of Vout v. Hay, which held that if a Will is executed and complies with the formal requirements and the testator knew its contents, a rebuttable presumption arises that the testator had the necessary capacity. The Court found that, based on the evidence, the disinherited daughter could not rebut the presumption and could not establish suspicious circumstances. She appealed this decision.

    Court of Appeal upholds application judge’s findings

    The Court of Appeal dismissed the application and upheld the application judge’s initial findings. The Court found that the application judge applied the principles from Vout v. Hay appropriately and gave sufficient consideration to the evidence in reaching their decision.

    The Court found the application judge provided adequate reasons for accepting the evidence submitted by the executor, establishing that the testator had sufficient capacity when she prepared her Will (aside from her illness and the effects of her medication and treatment). The Court further affirmed the application judge’s finding that the appellant and her mother had a relationship that “had been tumultuous and difficult for a very long time”. As a result, the appellant’s evidence could not support her claims of incapacity and undue influence.

    Argument for public policy considerations rejected

    The appellant also claimed that the application judge erred in not finding a public policy consideration to justify payment of her costs from the estate. As per the case of MacDonald Estate v. Gooderman, if there are ambiguities in a Will that give rise to litigation, it is appropriate for the testator (through their estate) to bear those costs.

    The Court of Appeal stated that because the Will was valid and no issues were found related to the testator’s capacity, the public policy considerations set out in MacDonald Estate were not applicable in these circumstances. Therefore, the appellant was responsible for her own costs.

    Derfel Estate Law in Toronto Represents Clients in Contentious Estate Litigation Matters

    The experienced estate litigation lawyers at Derfel Estate Law in Toronto act on behalf of executors to defend various estate litigation matters, including Will challenges and capacity issues. Managing estate administration can be a tedious and confusing responsibility, particularly when disputes arise among family members, which is why we are here to help. To learn how we can assist you with your estate litigation dispute, call our office at 416-847-3850 or contact us online.

  • What Happens When You Can’t Locate a Loved One’s Will?

    What Happens When You Can’t Locate a Loved One’s Will?

    While grieving the loss of a loved one, it can be challenging to know what steps to take. However, if a valid Will has been prepared, this can help take some of the pressure off of the executor by outlining who will inherit what and confirming what rules apply to the administration of the estate. Often, if the deceased left behind an estate plan, the appointed executor(s) will know where to look for a Will. But what happens when a Will cannot be located?

    Substantial Efforts Must Be Made to Locate the Will

    Sometimes an individual will fail to provide clear instructions as to whether they made a Will or where it is kept. In Ontario, there is no requirement for a Will to be registered in a central registry. As a result, family members may be unable to find their deceased loved one’s estate documents.

    Generally, there must be an extensive effort to locate a Will before a court will conclude that it cannot be found (and, as a result, the estate declared an intestacy). Because only one original copy of a Will should exist, if it is not accessible for an unforeseen reason, questions may arise regarding the testator’s intentions.

    Common Places to Look for a Will

    A loved one may think they knew the deceased’s safe hiding places. But, if nothing turns up, some common ways to attempt to locate a Will may include:

    • Reviewing personal paperwork and filing cabinets;
    • Checking safety deposit boxes;
    • Contacting the lawyer(s) who the deceased might have; and
    • Advertising to other lawyers through the Bar Association.

    If the search remains unsuccessful, an individual may be required to apply to the court to establish that they have made reasonable efforts to locate a Will. For this reason, keeping a record of all search efforts is vital.

    Did the Testator Intend to Revoke the Will?

    If the testator took possession of the original Will after signing a new one and had the opportunity to destroy the original, there may be a presumption that they have done so. This presumption may be overcome depending on the circumstances.

    If a Will is not located, an individual who applies to the court for estate administration will be required to prove their efforts to find it. However, if an original Will that predates the last known Will is found, questions may arise as to whether the deceased had actually revoked the original. If it is deemed that the older Will is valid, it might be eligible to be probated. If not, the estate will proceed under the rules of intestacy (i.e., as if no Will existed, with the estate to be administered as per intestate succession laws).

    Is a Photocopy of a Will as Good as the Original?

    In some cases, a draft or copy of the testator’s Will may be located while the location of the original remains unknown. If this happens, probate may still be able to take place. However, unique rules and processes apply that may require extra time and expense. Generally, supporting documents such as affidavits from the testator’s lawyer who prepared the Will and the deceased’s executor may be needed to prove the photocopy is a copy of the original Will.

    Proving the Deceased’s Wishes in Court

    Rule 75.02 of the Ontario Rules of Civil Procedure outlines the procedure for proving a lost or destroyed Will by stating that:

    “75.02 The validity and contents of a will that has been lost or destroyed may be proved on an application,

    (a) by affidavit evidence without appearance, where all persons who have a financial interest in the estate consent to the proof; or

    (b) in the manner provided by the court in an order giving directions made under rule 75.06. O. Reg. 484/94, s. 12.”

    If only a copy is available, the applicant will have to prove that the testator executed an original Will and that the original is lost but has not intentionally been destroyed.

    To assist with proving a Will, it can be helpful to locate witnesses who can attest to the execution of the Will. Evidence may be required from someone (other than a potential beneficiary) who can speak to the contents of the Will.

    Disputes Can Arise Over the Validity of a Lost Will

    In situations where every person with a financial interest in a Will does not contest its validity, proving the Will is a relatively straightforward process that does not necessarily require a court appearance. Usually, an application is filed with affidavit evidence proving the validity and contents of the lost Will. In O’Reilly (Re), Justice Brown set out the proper form for the order once consent has been obtained from all individuals with a financial interest.

    However, more complex court proceedings are required in cases where one or more individuals do not agree with the validity of the Will and therefore disagree with the Will being proven. In Sorkos v. Cowderoy, the Ontario Court of Appeal set out the four-step test that the person applying to the court must prove, which includes:

    1. The due execution of the Will
    2. The particulars tracing the possession of the Will to the date of death and afterwards if the Will was lost after death;
    3. That the testator did not destroy the Will with the intent of revoking it; and
    4. Proof of the contents of the lost Will.

    Derfel Estate Law in Toronto Helps Executors Navigate Probate and Estate Administration

    Executors are required to fulfill substantial obligations and carry numerous responsibilities. However, fulfilling this process can be particularly difficult from the outset if the deceased’s Will cannot be located, which may increase the potential for estate disputes. At Derfel Estate Law, our estate litigation lawyers assist executors with each step of the estate administration process. Call us at 416-847-3850 or reach out to us online to learn how we can help you minimize the cost and conflict involved in administrating your loved one’s estate.

  • Deceased’s Former Partner Makes Claim to Estate

    Deceased’s Former Partner Makes Claim to Estate

    Having a valid Will is one of the best ways to mitigate the risk of estate litigation. However, disputes can arise when a testator passes away without making arrangements for their child support obligations in their Will. This was the central issue in the recent case of P.C.L. et al. v. The Estate of B.L. et al. before the Ontario Superior Court of Justice.

    Former partner of deceased applies to receive benefits

    The litigation was triggered by the death of B.L., who passed away in March 2019. The applicant, E.C., had been romantically involved with B.L. for eight years before his death. About five months before B.L. passed away, E.C. gave birth to a child.

    In the days following B.L.’s death, E.C. reached out to his employer to state that she and B.L. were involved in a common-law relationship and had a child together. She advised the employer that she and the child were his dependants and entitled to receive his pension and benefits. E.C. then applied to the courts to make a claim to B.L.’s estate under the Succession Law Reform Act, which states:

    “Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants…”

    Questions over relationship and parentage arise

    As evidence was presented to the Court, it became clear that the relationship between E.C. and B.L. was not understood equally amongst those who knew them. While E.C. initially insisted she was the common-law wife of B.L., she later stated that they simply had a history of romantic involvement. She had also initially sworn that B.L. was her child’s father. The evidence received by the Court included the following:

    1. B.L. and E.C. were not common-law spouses, and their relationship was not a permanent one;
    2. E.C. knew at the time of the child’s birth that B.L. may not be the child’s father;
    3. E.C. did not convey any information regarding uncertainty of parentage to B.L.;
    4. DNA testing took place after B.L.’s death proved that he was not the child’s biological father;
    5. B.L. allowed himself to be entered as the child’s father at the hospital, on the child’s birth certificate, and with the Children’s Aid Society;
    6. B.L. was involved in the child’s life from her birth until his death.

    Can a non-biological parent owe child support?

    Although B.L. was not the biological father of the child, the Succession Law Reform Act defines “dependant” as including “a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family.” As a result, a lack of biological connection between a child and an adult does not negate responsibilities around supporting that child.

    In 1999, the Supreme Court of Canada issued its decision in Chartier v. Chartier, which still serves as the leading case for determining whether someone is standing in the place of a parent. One of the differences between the facts in Chartier and that of B.L.’s estate is that in Chartier, the person standing in place as father knew he was not the child’s biological parent, whom the mother had in a previous relationship. However, the factors the Supreme Court used to determine whether someone had the intention to stand in place of a parent can still be applied broadly. They include whether the person provided financially for the child and whether the person represented to the child or the world that they are the child’s parent.

    The Court wrote that no post-Chartier cases share facts that are the same as those in B.L.’s estate dispute. Most situations where this issue arises involve someone having a long-term relationship with a child instead of the period of less than the one year that B.L. had with the child.

    “Settled intention” to stand in place of a child’s parent based on time and evidence

    The Court found that even though B.L. was led to believe he was the child’s biological father, his direct involvement in the child’s life was for just a few months. The court wrote that B.L.’s lack of knowledge of the facts about the child’s parentage should be considered one of the factors, but not the only one. In addition, his financial contributions towards raising the child were “modest and not fully fleshed out.”

    The Court also noted the difference between an “intention” and a “settled intention,” stating that the latter is revealed over time and supported by evidence of people who know the adult and the child and how their relationship functions or appears in public. As a result, the Court determined the applicant mother had not met her onus to prove that before his death, B.L. had a settled intention to treat the child as his own. As a result, the mother and child were not entitled to any of B.L.’s estate.

    Derfel Estate Law Provides Experienced Advice on Dependant Rights & Estate Disputes

    At Derfel Estate Law, our estate litigation lawyers work with clients in all aspects of estate disputes, including Will challenges, trustee and executor issues, trust disputes, and passing of accounts. We provide personalized assistance to beneficiaries, guardians, executors, trustees, and any other party involved in estate matters. If you are wondering how we can help you, please don’t hesitate to reach out online or call 416-847-3580 to speak with an estate lawyer who will work tirelessly to resolve your dispute.

  • Estate Planning for Blended Families in Ontario: A Guide

    Estate Planning for Blended Families in Ontario: A Guide

    Often, the most complicated part of estate planning is figuring out who you want to benefit from your estate. For blended families, estate planning can feel especially complicated – after all, you’re now dealing with more family members and more dynamics to keep in mind. Whether you are a longstanding member of a blended family or entering a new relationship (and possibly a new family unit), it’s important to think about the implications when creating your estate plan.

    With Ontario’s Make-a-Will Month running throughout November, we’re covering the benefits of estate planning for individuals at various stages of their lives. Today, we’ll be talking about some of the unique considerations for estate planning in a blended family and why there’s no better time than the present to begin your estate planning journey.

    The Inheritance Rights of Individuals in Blended Families

    As a starting point, we’ll cover the legal rights of former partners, current partners, and stepchildren for estate planning purposes.

    As covered in some of our previous posts, Ontario’s Succession Law Reform Act provides direction regarding how your estate will be handled if you die without a will. Typically, if your spouse survives you, they are entitled to your assets. If your spouse does not survive you, your children will be entitled to your assets.

    These considerations become a little more complicated in blended families, as you may also be considering the rights of your former spouse, a common-law spouse, or stepchildren.

    Former Spouses and the Succession Law Reform Act

    Section 43.1 of the Succession Law Reform Act specifies that separated spouses cannot benefit from the intestacy rules. To be considered “separated” for the Succession Law Reform Act, the former spouse must have been living separate and apart at the time of the testator’s (will-maker) death and meet one of the following scenarios:

    • The testator and former spouse lived separate and apart because of the breakdown of their marriage for three or more years before the will-maker’s death
    • The testator and former spouse entered into a valid separation agreement
    • The testator and former spouse have a court order settling their affairs because of the breakdown of their marriage
    • A family arbitration award was made under the Arbitration Act, settling the parties’ affairs after the breakdown of their marriage

    Common-Law Spouses and the Succession Law Reform Act

    Common-law spouses do not have the right to inherit from an intestate estate under the Succession Law Reform Act.

    Stepchildren and the Succession Law Reform Act

    The Succession Law Reform Act defines “child” to mean a child conceived by the testator (either before or after death). However, s. 1(3) of the Succession Law Reform Act notes that, despite the legislative definitions, non-blood relatives (e.g., stepchildren) may be deemed to fit the description of a direct family member even though they are not a blood relative unless a contrary intention is expressed in a will. While the legislation suggests that a stepchild may be considered a “child” for intestacy, this assessment can become complex depending on the unique circumstances of the will-maker and stepchild’s relationship.

    Key Takeaways for Individuals in Blended Families

    Complications can arise when a member of a blended family dies without a will. For example, failing to address a separation or prepare a will can confuse the status of a former spouse or a stepchild. Furthermore, common-law spouses are not automatically entitled to inherit from your estate. The best way to ensure your loved ones are cared for is to prepare a will.

    Important Estate Planning Considerations for Blended Families

    We’ve talked about the challenges of dying without a will in a blended family. But what are the benefits of having a will in place? In addition to avoiding some of the issues we’ve flagged above, here are just a few reasons why blended families need a solid estate plan.

    Guardianship for Your Minor Children

    If you have minor children, you’ll want to ensure they are well-cared for if you and your partner pass away. Additionally, in a blended family scenario, you may have unique considerations regarding who will care for the children after you’re gone (for example, whether they will stay together). It’s important to consider the legal implications of guardianship in these circumstances, especially if any former spouses still have parenting rights.

    Providing for Your Minor Stepchildren

    Children cannot inherit property until they turn 18 in Ontario, and you will need to think about providing guardianship of property for your children (whether they are stepchildren or otherwise). You can appoint a guardian to care for your minor children’s property until they are old enough to do so themselves. You can also create a trust for your children, which holds the funds for your children for a certain period and can be executed in different manners. For example, you can dictate that the trust be paid out in installments or released to the child in a lump-sum payment at a particular time.

    Providing for Your Current Partner

    As noted above, common-law partners do not have the right to inherit from an intestate estate. If you are in a common-law relationship and have minor children, it’s critical to have a will in place to ensure your common-law partner is cared for after you’re gone.

    If you are married to your current partner, you will still want to look carefully at your assets and policies to determine whether any designations need to be updated. For example, if you named your former spouse as a beneficiary on your life insurance policy, they may still be entitled to the proceeds of that policy even if you executed a separation agreement.

    Providing for Your Former Partner

    You can provide for your former partner in your will if you choose to do so. Depending on your wishes regarding the guardianship of your children, providing for your former partner may be in your best interests.

    Additional Notes on Estate Planning for Blended Families

    Estate planning for blended families can be a complex and, at times, emotional experience. It’s important for anyone creating an estate plan for blended families to consult an experienced estate lawyer to ensure they understand the respective rights of their family members and other legal issues, such as obligations to a former spouse or guardianship of minor children. Regardless of your situation, the best way to protect your family in the event of the unthinkable is to make your wishes known by creating your estate plan today.

    Contact the Toronto Estate Litigation Lawyers at Derfel Estate Law for Guidance with Wills

    If you need help with an existing will or are considering applying to challenge a will or to dispute a trust, contact the estate litigation lawyers at Derfel Estate Law before you proceed. We can help you determine whether you are eligible to bring such a claim, help you understand your options and rights, and represent you throughout the process. To find out how we can help, call our office at 416-847-3580 or contact us online to schedule a consultation.