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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.
BEST LAWYERS IN CANADA 2018
Congratulations to John Poyser, Kimberly Whaley and Debra Stephens who have been selected by their peers for inclusion in the 12th Edition of The Best Lawyers in Canada for their work in Trusts and Estates.
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2.
JUNIOR TRUSTS AND ESTATES PRACTITIONERS LUNCH PROGRAM, JULY 31, 2017
Albert Oosterhoff presented at the Junior Trusts and Estates Practitioners (JTEP) lunch program, on July 31, 2017, which was held at WEL PARTNERS on "Compensation and Passing of Accounts". Albert, in his presentation, provided an overview of the relevant statutory regime pertaining to a fiduciary's entitlement to compensation as well as the common law development of the approaches to calculating compensation, particularly with respect to Estate Trustees. He also addressed a number of the circumstances in which a fiduciary's compensation may be reduced as well as when compensation may or may not be taken, including the taking of interim compensation. Furthermore, Albert outlined when a fiduciary is required to pass his or her accounts.
Link tp materials:
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| 3. WEL WISHES TO KATHERINE MORRIS
Katherine Morris, who joined us this summer as a summer student from Windsor Law, is returning to Windsor for her third year at law school. We at WEL wish Katherine all the best for her final year and hope she will stay in touch. We will miss her. Congratulations on your articling position at Bales Beall LLP.
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(i) YOU DON'T CHOOSE YOUR FAMILY, OR YOUR JOINT ATTORNEY
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by Dylan Crosby
A recent decision of the Ontario Superior Court of Justice illustrates the difficulties that can arise in cases where siblings who are antagonistic to one another are appointed joint attorneys for an aging parent. The case of White v. White involved Helen White, an 87 year old suffering from dementia, and her two sons, Mitchell and Raymond. Helen executed a Continuing Power of Attorney for Property in 1994 appointing her husband to be her attorney and in the event of his death, appointing Mitchell and Raymond. She never executed a Power of Attorney for personal care. Helen's husband passed away in 2013 and Mitchell and Raymond soon became involved in a legal fight concerning Raymond's trustee accounts for their late father's estate. That matter settled in September 2015 and the Minutes of Settlement specifically provided that Raymond and Mitchell would continue to act as attorneys for property for Helen in a manner "consistent with past practices." Nine months later however, Mitchell commenced an application to remove Raymond as an attorney for property and to appoint himself as Helen's guardian for personal care. Raymond in turn sought an order appointing himself as Helen's guardian for personal care but did not seek an order removing Mitchell as an attorney for property.
Mitchell's complaints against Raymond included that Raymond refused to agree to purchase needed clothes for Helen, that he refused to authorize expenditures for someone to come and read to Helen, that he refused to have Helen's blood pressure tested, that he refused to cooperate in addressing Helen's obesity and that he refused to respect Helen's adherence to the Roman Catholic faith. For his part, Raymond claimed that he followed the recommendations of Helen's health care providers and noted that Helen's diet had been recently changed at Mitchell's request. Mitchell also conceded that he had in fact purchased new clothes for Helen and reimbursed himself from Helen's bank account. There was no evidence led to suggest that Helen's health care needs were not being met. The brothers assessed their working relationship differently with Mitchell describing it as 'a struggle at best and a battleground at worst' and Raymond describing it as 'functional'. An additional issue in the case was that Mitchell and Raymond had provided Helen's care facility with incompatible Emergency Care Plans.
Justice Taylor began his analysis regarding the attorney for property issue by noting that an attorney who was appointed by a person who subsequently became incapable should only be removed based on strong and compelling evidence of misconduct or neglect on the part of the attorney. Whether an attorney is acting in the best interests of the incapable person is a secondary issue. Justice Taylor was satisfied that Helen wished to have both her sons involved in making decisions relating to her financial affairs and that Mitchell had failed to present strong and compelling evidence of misconduct or neglect on Raymond's part. The decision reads:
In my view, Mitchell overstates the extent of the disagreement between he and Raymond. While they may have differing views about expenditures that should be made for or on behalf of Helen, the evidence satisfies me that both are acting in good faith on Helen's behalf. Although Raymond may not agree with some expenditures proposed by Mitchell, Mitchell has access to an account from which such expenditures can be paid. I do not find that Raymond is acting in bad faith in disagreeing with some of the expenditures proposed by Mitchell.
Justice Taylor also found it significant that nine months prior to commencing the present application Mitchell had signed Minutes of Settlement that stated he and Raymond would continue to act as attorneys for property for Helen 'consistent with past practices.'
With respect to both sons' competing requests to be appointed guardian of personal care for Helen, Justice Taylor found that both sons had Helen's best interests in mind when making health care decisions on her behalf and that it was appropriate for both of them to be appointed guardians for personal care for Helen:
I also conclude that both Mitchell and Raymond have Helen's best interests in mind when making health care decisions on her behalf. I do not fault Raymond for choosing to follow the advice of the healthcare professionals at Sunnyside. I do not fault Mitchell for questioning and indeed challenging the advice and recommendations of the healthcare professionals at Sunnyside. However, I do not think it appropriate that either Mitchell or Raymond be appointed Helen's guardian for personal care to the exclusion of the other... Although Mitchell expresses concern about some aspects of Helen's present care, the absence of any medical evidence that her health care needs are not being met is a telling omission. I conclude that there is no such evidence because Helen's health care needs are being appropriately addressed... In my view it is appropriate for Mitchell and Raymond to be appointed guardians for personal care for Helen.
With respect to the conflicting Emergency Care Plans provided to Helen's care facility, Justice Taylor preferred Raymond's plan over Mitchell's because Raymond's plan was in accordance with that which had previously been provided by Helen's husband before his death.
This case affirms that mere disagreements between attorneys do not constitute misconduct or neglect sufficient to justify the removal of one at the request of another. The wish of one attorney not to work with another attorney does not override the grantor's wish that they do so. This result apepars appropriate since an attorney always has the option of resigning from their position.
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(ii) CANADA'S ABORIGINALS: THE LEGACY OF INSTITUTIONAL PATERNALISM
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by Alexander J. Swabuk
As previously discussed by Arieh Bloom and Lionel J. Tupman in their Advocates Quarterly paper entitled "The Honour of the Crown and Indian Succession and Inheritance Law in Canada: Fiduciary Protection or Creeping Re-Appropriation of Aboriginal Property?,"[1] although Canada prides itself on being ethnically diverse, and is perceived by many in the international arena to be the "epicenter of cultural pluralism," racism and patriarchal ideals arguably remain imbedded within our nation's laws.[2] Although Canada's particular brand of racism often carries with it a "soothing and even noble veneer," its effects are no less devastating.[3] One must only look at the living standards of Canada's Aboriginal populace and the lack of historical judicial awareness to their plight in order to have a basic understanding of how systemic racism has negatively impacted the legal-decision making process in Canada, and has successively led to the marginalization and dismissal of indigenous peoples and their cultures.
[4]
In recent years, the notion that Canada is failing its indigenous populace has attracted increasing attention from scholars, as well as legislators at both the federal and provincial levels.[5] Yet, despite various public inquiries, and recommendations from those doing academic research,
patriarchal policies remain entrenched within the statutory regime that governs survivorship rights and estates of aboriginals. The Indian Act and the Indian Estates Regulations collectively govern the wills and estates of Aboriginals in Canada. Under the Indian Act, the Minister of Indian and Northern Affairs Canada (the "Minister") has broad jurisdiction over the estate of a deceased aboriginal individual if:
- A person was ordinarily resident on a reserve or on federal or provincial Crown land at the time of his or her death, and
- A person was registered as an Indian or entitled to be registered as an Indian ("Indian"). [6]
Section 46 of the
Indian Act
outlines a number of circumstances in which the Minister may declare a will to be void, either in whole or in part. The Minister may declare the will of an Indian to be void in whole or in part if he is satisfied that one of the following has occurred:
- the will was executed under duress or undue influence;
- the testator at the time of execution of the will lacked testamentary capacity;
- the terms of the will would impose hardship on persons for whom the testator had a responsibility to provide;
- the will purports to dispose of land in a reserve in a manner contrary to the interest of the band or contrary to the Indian Act;
- the terms of the will are so vague, uncertain or capricious that proper administration and equitable distribution of the estate of the deceased would be difficult or impossible to carry out in accordance with the Indian Act; or
- the terms of the will are against the public interest.
In the event the Minister declares that a will is void in its entirety, or in part, the intestacy provisions of s. 48 of the Indian Act apply to the estate assets affected by the voided provisions. Under s. 48 the Minister has the authority to vary the quantum allocated to a surviving spouse, common law spouse or issue. Additionally, the Minister retains authority over all transfers of reserve land to the heirs or beneficiaries. The Minister will not register any administrative transfer of reserve land without documentary proof of a personal representative's authority to act. As such, all transfers of reserve land must first be approved by the Minister.
Reserve land in particular is subject to a vastly different system which can have significant consequences in bequests of property for members of Canada's Aboriginal populace. According to section 50 of the Indian Act, "a person who is not entitled to reside on a reserve does not by devise or descent acquire a right to possession or occupation of land in that reserve." On intestacy, an interest in reserve land cannot be inherited by heirs more remote than brothers or sisters. Therefore, nieces or nephews of a deceased Aboriginal may not inherit an interest in reserve land through an intestate estate. Instead, in a situation where a niece or nephew would have otherwise inherited an interest in reserve land on intestacy, the interest in the land is transferred to the deceased Aboriginal's band.
Prior to colonization, Aboriginal communities cared for their people and children in accordance with their cultural practices, laws and traditions.[7] These cultural based systems of care were based on the notion that one's extended family should be valued and that each individual was a "prized gift from the creator."[8] However, with the arrival of European settlers, and the subsequent imposition of colonial practices and policies, these traditional systems of care were all but destroyed. The Canadian judicial system, which was initially built in order to maintain peace, order, and stability in a Euro-Canadian society subsequently, established policies that continue to have a dramatic effect on the Aboriginal populace. According to Statistics Canada, approximately 799,010 people, or 3 per cent of Canada's population, identified themselves as having an Aboriginal identity in 1996. Ten years later, the census reported 1,172,790 people, or 4 per cent of the population. The proportion of people reporting an Aboriginal identity continues to grow, according to the most recent data. As such, it is quite evident that the government of Canada needs to start adopting policies which "reconcile Indian rights, interests, needs and aspirations," as this is the only way for members of Canada's indigenous populace to truly be "recognized as important actors with independent objectives," and receive the fundamental equality that they deserve as Canadians.
[2]
Kline, M. (1994). The color of law. Social & legal studies: an international journal (pp. 451-476). USA: Sage.
[3]
Mandell, L. (2003). Offerings to an emerging future. In A Walkem (Ed.), Box of treasures or empty box?: Twenty Years of Section 35 (pp. 159-174). Canada: Theytus Books.
[4]
Roberts, J., & Melchers, R. (2003). The incarceration of aboriginal offenders: trends from 1978 to 2001. Canadian Journal of Criminology & Criminal Justice, 45(2), 211-242.
[5]
Andersen, C. (1999). Governing aboriginal justice in canada: constructing responsible individuals and communities through 'tradition'. Crime, Law & Social Change, 31.
[6]
Indian Act, R.S.C. 1985, c. I-5,
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(iii) PROPOSED TAX CHANGES
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On July 18, 2017, the federal government introduced proposals including draft legislation to amend the Income Tax Act, which, if passed, will have a significant impact on the taxation (and thus the viability) of Canadian controlled private corporations (CCPC), particularly those which operate small businesses.
The proposed amendments include increasing capital gains taxes on the deemed disposition of the shares an individual holds on death of a CCPC, including post mortem tax planning. The taxation rate is proposed to be greater for shares of a CCPC that an individual holds on death, than the taxation rate for shares that an individual holds in a publicly traded corporation. This may also affect trusts which hold shares of a CCPC and the beneficiaries of such trusts. It constitutes a fundamental change to the taxation of private corporations and their shareholders.
It would appear that the proposals are intended to discourage individuals from holding investments in privately held corporations and to encourage them to hold such investments outright. It would also limit income splitting and access to the capital gains exemption. These proposed amendments have generated much discussion and anxiety for those in the estate and trusts field, accountants, lawyers and those who own and operate small businesses. The deadline for the public to make submissions with respect to the proposed amendments is October 2, 2017.
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PART III: UPCOMING EVENTS
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LSUC, Practice Gems: The Administration of Estates 2017
September 29, 2017
Co-Chair: Kimberly Whaley and Tim Grieve
Speaker: Professor Albert Oosterhoff
Toronto Police Seniors Presentation
October 3, 2017
Speaker: Kimberly Whaley and Amanda Bettencourt
Toronto Police Seminar
Elder Abuse
October 6, 2017
Speaker: Kimberly Whaley, Lionel Tupman
LSUC 20th Annual Estates and Trust Summit
The Law of Assent
October 16, 2017
Speaker: Professor Albert Oosterhoff
STEP Toronto
Elder Abuse
October 18, 2017
Speaker: Kimberly Whaley and
Professor Albert Oosterhoff
Advocis, The Financial Advisors Association of Canada
Dealing with Older Clients
October 20, 2017
Speaker: Kimberly Whaley
CCEL BC
Independent Legal Advice: The Interplay of where Capacity and Undue Influence
November 2-3, 2017
Speaking: Kimberly Whaley
CBA Nova Scotia
November 30-December 1
Speaker: Kimberly Whaley
Osgoode Intensive Program in Wills & Estate
Passing of Accounts and Fiduciary Accounts
February 13, 2018
Speakers: Kimberly Whaley, Lionel Tupman, and Professor Albert Oosterhoff
Osgoode Certificate in Elder Law
Marriage Contracts; Conflicts in Blended Families; Sibling Struggles; intergenerational Transfer of a Family Business; and Family Meetings
March 6, 2018
Speaker: Kimberly Whaley
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PART IV: RECENT BLOG POSTS
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