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WEL Partners provides litigation, mediation and dispute resolution to clients throughout Ontario:
* Albert Oosterhoff, Professor Emeritus Western University, Counsel to WEL consults on matters within his areas of expertise, providing opinions concerning Wills, Estates, Trusts and related Property matters.
Please Enjoy,
Kimberly A. Whaley & Lionel J. Tupman
WEL Partners
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1. WEL WELCOMES AMANDA BETTENCOURT, LAWYER
It is with great pleasure that we introduce and welcome Amanda Bettencourt who joined WEL PARTNERS as an associate lawyer on January 9, 2017.
Amanda's contact information can be accessed on our website:
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2. TORONTO POLICE SERVICES SEMINAR, FEBRUARY 2, 2017
WEL PARTNERS will be presenting once again at the Toronto Police Elder Abuse Seminar, coordinated by Detective Stuart Blower, on "Elder Abuse and Capacity, including Predatory Marriages".
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| 3. WEL POWERS OF ATTORNEY PUBLICATION 
WEL's newest publication, WEL on
Powers of Attorney, 2016, is now published. For inquiries, please contact Kim directly.
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| 4. LAW COMMISSION OF ONTARIO
Mark Handelman is a co-author of the LCO "Understanding The Relationship Between Suffering And Capacity At The End-Of-Life: A Pilot Study". He is also a member of the Law Commission Advisory Committee on end of life decisions.
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| 5. UNIVERSITY SETTLEMENT, DECEMBER 15, 2016
On December 15th, 2016, Krystyne Rusek held a seminar for staff and volunteers of University Settlement, a charitable organization that focuses on providing social services and assistance to newcomers to Canada. The seminar covered aspects of estate planning, including Wills and Powers of Attorney, basics of estate administration, and litigation involving estates and issues of capacity.
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| 6. OSGOODE PROFESSIONAL DEVELOPMENT PROGRAM, PASSING OF ACCOUNTS, FEBRUARY 9, 2017
Kimberly Whaley will be chairing the Osgoode Professional Development program: "2017 Guide to Passing of Accounts and Fiduciary Accounting" on February 9, 2017.
Kimberly Whaley will be addressing The Basics of Passing of Accounts;
Lionel Tupman will be addressing Compensation: Whom When and How Much; and
Birute Lyons will be addressing: What Lawyers need to look for when reviewing accounts.
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7. A NEW WEL CHECKLIST
WEL CHECKLIST: "Red Flags" for Decisional Incapacity in the Context of a Legal Retainer" can now be accessed on our website:
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| 8. LAW TIMES ARTICLE, FEBRUARY 22, 2016
Laura Cardiff was quoted in the Law Times article "Marriage ends, but judge rules against dowry return" by Yamri Taddese:
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| 9. WEL PARTNERS THANK CANADIAN LAWYER (MAGAZINE), ITS READERS AND SUPPORTERS 
WEL PARTNERS is extremely honoured to be named as one of the top 5 National Wills, Trust and Estates Boutiques of 2017-2018:
We greatly appreciate the support of our colleagues and the profession at large and are always striving to improve our client and professional services.
CONGRATULATIONS
to our professional colleagues on their significant achievement
:
- Bales Beall LLP
- Hull & Hull LLP
- Legacy Tax + Trust Lawyers, Vancouver; and
- Schnurr Kirsh Oelbaum Tator LLP
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(i) MEANING OF "CHILDREN" IN A WILL: BIOLOGICAL? ADOPTED? FOSTER?
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by Kimberly Whaley
A recent case out of the Court of Queen's Bench of Alberta[1] looked at the meaning of "children" under a Will and whether that included a foster child of the deceased. Finding that the words of the Will itself were unhelpful, the Court determined the testator's intention at the time she executed the Will.
Background
The deceased was the mother of three biological adult daughters; one legally adopted adult son; and one adult foster daughter who had lived with the deceased since she was between 4-8 months old. The deceased never formally adopted her foster child.
The personal representative of the estate (the deceased's adopted son) filed an application for probate naming the foster daughter as one of the deceased's children listed as a residuary beneficiary. The deceased's three biological daughter's disputed this, arguing that the foster daughter was not one of the "children" as contemplated by the Will.
The residuary clause in the deceased's Will, paragraph 4(b), stated:
To transfer the rest and residue of my estate, including all articles of person, domestic and household use or ornament belonging to my estate at my death for the benefit of my children and to divide the residue of my estate then remaining into as many equal shares as the number of my children. . ." [emphasis added]
The following paragraph in the Will, paragraph 4(c), stated:
For the purposes of this Will, a child or children of a person named in this Will shall mean the biological and legally adopted children of such person. [emphasis added]
An application for advice and direction was brought to answer the question of whether the foster child was one of the deceased's "children" and therefore a residuary beneficiary under the Will.
Interpretation of the Will
At first glance, to many it might seem that the definition of "children" in the Will was conclusive and the foster child was not a child of the deceased as defined in the Will as she was neither a biological nor legally adopted child of the deceased. However, the Court disagreed for three reasons:
- First, the Court found that paragraph 4 (c) referred to a "child or children of a person named in the Will" and that "none of the 'children' of the testatrix was 'named' in the Will in paragraph 4(b)".[2] The Court concluded that in paragraph 4(b) "only the description 'children' appears." Paragraph 4(c), then, might be found not to have been engaged given the language of the Will.
- Second, the Court noted that "if that approach is too literal and pedantic, the crucial question is whether 'a named person in this Will' includes the testatrix".[3] This could mean anyone whose name occurs in the Will or it might mean any person the testatrix has named in the Will. The Court preferred the latter interpretation, in that the testatrix was not included as "a person named in this Will" as the testatrix was doing the naming. It was her Will. So in other words it referred to children of a person that the testatrix named in the Will, not the testatrix's "children".
- Third, the Court found that if the purpose of paragraph 4(c) was to define "child" or "children" for all purposes under the Will, the words "of a person named in this Will" would not have been necessary. They were added for a reason. That reason, the Court found, was to distinguish the testatrix's children from her children's children.
In finding that this paragraph did not determine if the foster child fell or did not fall within the scope of the term "children" in paragraph 4(b) the Court found that the testatrix's intention must be determined.
Intention
Section 26(b) of the applicable Alberta Wills and Succession Act[4] requires that a "will must be interpreted in a manner that gives effect to the intent of the testator, and in determining the testator's intent the Court may admit . . . evidence as to the meaning of the provisions of the Will in the context of the testator's circumstances at the time of the making of the Will".
With respect to allowing extrinsic evidence to determine the testator's intention the Court relied on the Alberta Law Reform Institute report entitled Wills and the Legal Effects of Changed Circumstances: "The recommendation of ALRI is that a court should be able to consider the extrinsic evidence in every case, including evidence of the testator's intention."[5] The Court also noted the need for corroborated evidence under s.11 of Alberta's Evidence Act.
On the same day that she executed her Will, the deceased signed an Enduring Power of Attorney naming the foster child as an attorney. She described the foster child as "my daughter" in the POA document. The other attorney was her biological daughter who was also described as "my daughter". The Court recognized that the deceased's evidence was hearsay but necessity was established because she was deceased. Reliability was established because the description of the foster child as her daughter was found in a signed, witnessed and reviewed-with-counsel document. The Court determined that this evidence of the testatrix's intention respecting the term "children" at the time of making her Will was "corroborated and utterly convincing".
[6]
The Court noted "a daughter is a child. That is common sense. The estate planning documents provide solid evidence of how, at the time the Will was executed, the testatrix regarded [the foster daughter]. She was her daughter and she therefore was one of her children for the purposes of the Will."
[7]
The Court concluded that the foster child:
was one of the testatrix's children. She falls within the scope of the term "children" in paragraph 4(b) of the Will. That is what the testatrix intended. That is the only reasonable and moral interpretation. . .There is no need to resort to "rectification" of the Will under s.39 of the Wills and Succession Act since what the testatrix testator meant by the term "children" in paragraph 4(b) is clear without the need for any linguistic modification.
[8]
Conclusion
Of note, in Ontario, the use of extrinsic evidence with respect to intention was discussed in the Ontario Court of Appeal in Robinson Estate v. Robinson, 2011 ONCA 493 (CanLII), [2011] O.J. No. 3084. Robinson held that as a general rule, when construing a will, the testator's intention must be determined from the words used in the will and not from direct extrinsic evidence of intent.[9] If however, the testator's expression of intent is less than perfect, extrinsic evidence is admissible to aid the construction of a will but such evidence will be limited to the testator's circumstances and those surrounding the making of the will.[10] Direct evidence of a testator's intentions is inadmissible. As the court in Robinson stated, much uncertainty would be introduced into estate litigation if disappointed beneficiaries could challenge a will based on their subjective belief of the testator's intentions.
[11]
Determining who "children" are has been the subject of many cases. Now with assisted human reproduction and other advances in the science behind human reproduction new questions are being raised with respect to embryos and other human reproductive material. The case law in this area may only increase.
[1]
Matras Estate 2016 ABQB 728 (CanLII)
[10]
Robinson at para. 24
[11]
Robinson at para. 27
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(ii)
REMOVAL OF ESTATE TRUSTEE FOR FAILURE TO BE A "PRUDENT INVESTOR"
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by Kimberly Whaley
What constitutes failing to be a "prudent investor" as an estate trustee?
In the Ontario case of Mowry v. Groome[1] the Court removed an estate trustee for failing to exercise the care, skill, diligence, and judgment that a prudent investor would exercise in making investments. The Court also concluded that the estate trustee erroneously took $70,000.00 which he said was an inter vivos gift from the deceased.
"Prudent Investor" Rule
Pursuant to section 27(1) of the Trustee Act,[2] a trustee must, in investing trust property, exercise the care, skill, diligence and judgment that a prudent investor would exercise in making investments.
Under Section 27(6) of the Act, a trustee must diversify the investment of trust property to an extent that is appropriate to the requirements of the trust, and general economic and investment market conditions.
In this case, after the testator died, the estate trustee (in taking over the finances of the estate and transferring the funds into new accounts) filled out a form that stated his "account objectives" were to be 10% growth and 90% speculative and that his "risk tolerance" was to be 10% medium and 90% high. The Court noted that clearly those percentages were "unacceptable for an estate trustee".
[3]
The investment advisor gave evidence that the new investment accounts and stocks purchased by the estate trustee reflected these percentages. While the risk of each of the stocks was rated medium, the overall portfolio was high-risk as a result of over-concentration in the energy sector, or in other words because of a lack of diversification.
In December 2014 the market for energy stocks crashed and the portfolio lost much of its value resulting in a loss to the trust of $164,983.00 (the total assets of the estate at the time of death were worth $436, 289.00).
Furthermore, the estate trustee chose to invest in certain shares in another company on margin for $48,329.00. The Court noted that buying stocks "on margin" is an "unacceptable risk" for an estate trustee and did nothing to mitigate the risk inherent in the energy stock portfolio. Several weeks after he purchased them, the stocks were worthless and resulted in a loss to the estate of $96,150.00.
Notably, the estate trustee also made the "not particularly wise" choice to retain the deceased's house which had very little equity in it, instead of selling it, so he could renovate it at the expense of the estate and rent it out for rental income.
The Court concluded that the estate trustee failed to exercise the care, skill, diligence and judgment that a prudent investor would exercise in making investments.
"Gift" To Estate Trustee
The estate trustee alleged that sometime after the death of the testator he "found" a cheque that the deceased had left in the estate trustee's office. The cheque was drawn by the deceased on his chequing account and payable to the estate trustee in the amount of $70,000.00. The reference line on the cheque bore the notation "early inheritance gift". However, at no time between the date of the cheque and the date of death were there sufficient funds in the account to cover the cheque. On the date of death there was only $24,000.00 in the account. The estate trustee took money out of the investment account and deposited it into the chequing account so he could pay himself.
The Court found that there was no valid gift, as for a gift to be valid it must be perfected. The donor must have done everything necessary to "effect the transfer of the property". The money said to be the subject of the gift simply didn't exist. The money "taken out of the investment account to pay himself was not the money which the deceased intended to gift him with the original cheque (if there was in fact such an intention)."
[4]
Conclusion
Ultimately the estate trustee was ordered to repay over $350,000 to the estate including repayment for investment losses (the Court ordered that one-half of the losses incurred be repaid), excess compensation, the money taken as a "gift", partial reimbursement of legal fees paid to estate solicitors and for income tax penalties and interest. The estate trustee was also removed as estate trustee.
Justice Bale made the following observation regarding the estate trustee's actions:
In my view, the actions of Mr. Mowry that caused the losses were not dishonest, just wrong-headed. After listening to Mr. Mowry talk for several days, my conclusion was that his problem was an inflated view of his business prowess, and a desire to be a hero, without regard for the risks involved, or the duties of an estate trustee.
[5]
This case acts as a reminder to choose your estate trustee wisely and to make sure fiduciary duties are explained should you be advising the estate trustee.
[1]
2016 ONSC 7850 ("Mowry")
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PART III: UPCOMING EVENTS
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STEP Toronto
January 18, 2017
Case Law & Potpourri of Trust Issues
Speakers: Ian Lebane, Howard Black, Timothy Youdan
Toronto Police Seminar
Elder Abuse
February 2, 2017
Speaker: Kimberly Whaley, Lionel Tupman
Osgoode Professional Development
February 9, 2017
Passing of Accounts
Speaker: Kimberly Whaley, Lionel Tupman and Birute Lyons
STEP Toronto
February 15, 2017
Life Insurance
Speakers: Ted Polci, Angela Ross and Florence Marino
Legal Education Society of Alberta (LESA), Calgary
Undue Influence
March 1, 2017
Speaker: Kimberly Whaley
Legal Society of Alberta (LESA), Edmonton
Undue Influence
March 8, 2017
Speaker: Kimberly Whaley
STEP Toronto
April 12, 2017
Estate Planning for Global Families
Speakers: Jeff Halpern, Michael Cadesky and Margaret O'Sullivan
Osgoode Certificate in Elder Law
April 20, 2017
Parent/Adult Child & Sibling Struggles
Speakers: Kimberly Whaley & Albert Oosterhoff
Estate Planning and Litigation Forum, Langdon Hall
April 23-25, 2017
Pecore - 10 years later
Speaker: Kimberly Whaley
LSUC Six Minute Estate Lawyer 2017
May 8, 2017
Powers of Attorney Litigation
Speaker: Kimberly Whaley
STEP Toronto
May 17, 2017
Challenges of Probate Planning
Speaker: Gillian Musk
B'Nai Brith Seminar
Power of Attorney and Accounting
May 23, 2017
Speaker: Kimberly Whaley
Toronto Police Seminar
Elder Abuse
June 22, 2017
Speaker: Kimberly Whaley, Lionel Tupman
CBA Wills Estate and Trust PEI
Capacity and Undue Influence/Attacking and Defending Gifts
June 23, 2017
Speaker: Kimberly Whaley
LSUC, Estates Administration
September 29, 2017
Chair: Kimberly Whaley
Toronto Police Seminar
Elder Abuse
October 5, 2017
Speaker: Kimberly Whaley, Lionel Tupman
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PART IV: RECENT BLOG POSTS
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