Control from beyond the grave is often intolerable for beneficiaries unable to access their inheritance. Those appointed to ensure the responsible administration of an estate may or may not have done anything wrong. Nevertheless, the beneficiaries' resentment often stirs controversy and their frustration, mistrust and hostility can result in their asking the court to remove Estate Trustees.
Imagine Rebecca falling in love with a very wealthy older man. His children insist that before marriage she must sign a domestic contract and promise not to make any claim for support or division of property under either the Family Law Act or the Succession Law Reform Act. Rebecca is young, in love and knows that this man loves her. She agrees. Fast forward twenty years later and Rebecca’s husband has died. He has left her nothing in his Will and she has no means of support. Is there anything Rebecca can do? Maybe.
Paul suffered from Becker's Muscular Dystrophy. He often fell, had trouble standing up or sitting down and going down stairs was arduous. When his parents divorced, Paul's father undertook to support him and recognized that this obligation was to survive his death. In his Will, Father left $125,000 trust to care for Paul. The disease was progressively debilitating and the expense for Paul's care substantially increasing. It was clear that not even Father's entire estate of $650,000 would be enough to care for Paul. He asked for increased support with a dependant's relief application under the Succession Law Reform Act . The court considered the morality of giving everything to Paul at the expense of the other beneficiaries.
Mr. Grant died and left behind both his wife and ex wife. He signed a separation agreement with wife number one where he agreed to provide spousal support for the rest of her life. However, the first Mrs. Grant was not a beneficiary under his Will and upon his death the last Mrs. Grant declined to continue support payments to the first Mrs. Grant. The first Mrs. Grant applied to the Court for a lump sum payment that reflected the money she would have received had Mr. Grant still lived.
A young man was living with his elderly aunt. She promised that if he would be good to her, she would leave her house to him and take care of him in her will. The nephew did odd jobs around the house, drove his aunt around town and to different cities. He honoured his aunt's request, but she did not keep her word and left him noting in her Will. The Supreme Court of Canada determined that this was not an issue of enforcing a contract. It was an issue of fairness. In cases like these, the Courts have to determine if it would be inequitable to allow the promisor to keep everything while the other party provided the service. In this case, the Court found that the Aunt was unjustly enriched and it gave the nephew an award commensurate with the value of the services he provided.
Did the Testator have capacity to make a will? Did the Grantor have capacity to grant a power of attorney? Courts look to a number of factors to answer these questions. There are a number of excellent articles and textbooks that address the tests and difficulties in litigating capacity. Addressing those issues is beyond the scope of this paper. The purpose of this article is to address the utility of a retrospective capacity assessment in the face of apparently overwhelming contemporary medical opinion evidence that opines that the person in question had capacity.
Imagine that Johnny is dying. The doctors tell him to get his affairs in order. The patient’s only living relative is an elderly aunt whom he despises. Johnny wants to give all his money to his Church but, without a Will, by virtue of Ontario’s laws of intestacy that aunt will inherit everything. A lawyer prepares a Will setting out Johnny’s testamentary wishes. Johnny walks into the lawyer’s office, reads the will, and says it’s perfect. There is no doubt as to Johnny’s intent as the lawyer has taken the precaution to videotape the whole process. Johnny picks up the pen, is about to sign and dies. Is the Will valid in Ontario? It is almost certainly not valid, but there remains some doubt. If everyone knows Johnny’s true testamentary intentions what rationalization exists for not accepting the unsigned document as a valid Will?
Suppose Jane knew she was dying and gave the keys to her cottage to her favourite niece. Jane’s lawyer transferred title of the cottage to the niece. After Jane’s death, her husband, Mark started a law suit against the estate for support. He claimed to be a dependant and sought to have the capital value of the cottage deemed to be part of the net estate for purposes of ascertaining the value of estate. His lawyers claimed that the gift was invalid. Let’s take a moment to review Mark’s claim.
Situations arise where legal title may be in one person's name, but the courts presume there was a decision to create a trust so that the equitable or beneficial ownership really belongs to another. Let's take a look at the recent British Colombia Supreme Court case of Borkenhagen v. Kessler.
Trustees have a duty to act with loyalty, prudence and good faith. Executors who breach their fiduciary duty risk being removed. So let’s review how that might take place.