Category: Probate & Estate Administration

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Probate & Estate Administration

Family Members Fight Over Estate Representation After Mother and Daughter Perish in Plane Crash

In an unusual and tragic case recently decided by the Alberta Court of Appeal, a father and grandmother went to court each seeking to be appointed as the personal representative of the estate of a woman who died in a plane crash along with her daughter.

Mother and Daughter Perish in Plane Crash

The mother and father had three daughters together. The parents were not legally married, although they had participated in a religious marriage ceremony and lived together for several years.

Sadly, the mother and one of the daughters died in an airplane crash in Ethiopia. At the time of the deaths, the mother and father no longer lived together.

The mother and daughter died without wills.

The father had been appointed the personal representative of the daughter’s estate. He had retained legal counsel in the United States, where the airplane’s manufacturer had its head office. He planned to pursue litigation on his daughter’s estate’s behalf.

He also wanted to retain the same counsel to act on behalf of the mother’s estate in the litigation. 

However, the mother’s mother (the “grandmother”) and the father were embroiled in family law proceedings over the custody of the two remaining daughters, of which the father had sole interim custody. The grandmother had so far been denied interim contact with the children in the proceedings.

Father Applies to be Appointed Personal Representative of Mother’s Estate

The father had applied to be appointed as the personal representative of the mother’s estate for the limited purpose of representing her estate in the legal proceedings against the airplane manufacturer. In his application for the order, the father had stated:

“I am interested in the estate because I am the father of [the mother]’s two surviving minor daughters…”. 

Even though the grandmother had priority in being appointed as administrator because the mother had died intestate and the father and mother were not married, he argued that there were unusual circumstances that would support the court using its discretion to deviate from the priority scheme under legislation. The court is granted discretion where it finds “special circumstances” that warrant deviation from legislation.

However, the grandmother had opposed the application, seeking to be appointed administrator herself. She argued that the court should not use its discretion and she should be appointed in accordance with the legislation.

The chambers judge granted the father’s application and issued an order appointing him as the personal representative of the mother’s estate for the limited purpose of representing the estate in legal proceedings arising from the airplane crash.

The chambers judge was satisfied that it was appropriate to make a limited grant to the father to deal with the upcoming airplane crash litigation. She found that his proposal was reasonable because he had already retained a law firm on behalf of his deceased child and there would be some efficiencies in having the same law firm deal with the claims of both estates. She noted it was in the father’s best interests to ensure that money from the litigation would flow to the surviving children and the father was not going to benefit from administering the estate. In the judge’s view, the person raising and caring for the children was in a better position to make decisions impacting the children’s entitlement. In the result, she therefore exercised her discretion to grant the application.

The grandmother appealed the order, arguing that the chambers judge erred by exceeding or wrongly exercising her discretion by disregarding the grandmother’s priority under legislation.

Court of Appeal Dismisses Grandmother’s Appeal

While the court recognized that the grandmother had priority over the father in being appointed the estate’s representative, it concluded:

“In this case, the [father] had a relationship with [the mother] and the beneficiaries of the estate are the children of that relationship. Therefore, the respondent has an interest in the estate, because of his relationship with [the mother], as the father and custodial parent of the beneficiaries of the estate. He has an interest in maximizing the value of the estate, for the benefit of his children, through the pursuit of litigation arising from the airplane crash…. It is true that the [grandmother] has a higher initial priority [under legislation]. However, the chambers judge was of the view that she should exercise her discretion in favour of the [father] as the more appropriate representative given the fact that he had custody of the children; he was already involved in the litigation as the personal representative of [the deceased daughter]’s estate; and there was ongoing conflict arising from the custody litigation. We discern no reviewable error in that exercise of discretion.”

The court also rejected the grandmother’s other grounds of appeal.

As a result, the court dismissed the grandmother’s appeal.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

When a loved one dies, allow the experienced lawyers at Baker & Company to assist you with winding up and administering the Estate. We can offer practical advice and cost-effective services to ensure that the estate is wound up to the best advantage of the beneficiaries. Call us at 416-777-0100 or contact us online for a consultation.

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Probate & Estate Administration

Ontario Courts Now Accepting Probate Applications by Email

The Ontario Government recently announced a new email process for certificates of appointment of estate trustee (probate). Effective October 6, 2020, applications for a certificate of appointment of estate trustee (i.e. probate applications), supporting documents, and responding documents may be filed electronically by email to the Superior Court of Justice. 

What Is Probate?

Probate is the court process that grants an Executor the authority to act on behalf of the deceased. Specifically, it involves:

  • The formal approval of a will as the valid last will of the deceased; and
  • The appointment of the Executor of the estate.

When is Probate Required?

Probate is not required in every instance. However, it will be necessary where:

  • A Court approval is required to validate the will or the choice of Executor;
  • The estate includes real estate that does not automatically vest in an individual like the spouse of the deceased; and
  • A bank or other financial institution requires probate.

Email Requirements

As set out on the Superior Court of Justice’s website, where email is used to file documents in probate applications:

  • Applicants must complete a new Information Form and email it to the court together with the probate application.
  • The application form and supporting documents (affidavits, consents, proof of death, renunciations, draft certificates, motions) should be submitted by email only.
  • Original documents filed in support of the application (e.g. wills, codicils, bonds, ancillary certificates) and certified copies must be filed in hard copy by mail or courier to the Superior Court of Justice location where the application was filed or provided at the court office.
  • Estate administration tax payments and any filing fees must also be sent by mail or courier to the court office or provided at the court office.
  • Certificates of Appointment of Estate Trustee will be electronically issued and delivered by email to the address provided by the applicant.

It should be noted that the above process for emailing documents to the court does not apply to documents filed in estate litigation cases.

Additionally, applications filed prior to October 6, 2020 can be resubmitted to the court by email. The resubmission by email will allow an applicant to retain their position in the original queue and allow for the electronic issuance of a Certificate of Appointment of Estate Trustee and delivery by email to the address provided by the applicant. Where documents are resubmitted by email, these documents will by relied upon by the court and court staff rather than any earlier paper document submissions.

Get Advice

Baker & Company has adopted all of the COVID-19 safety precautions and vulnerable employees have been invited to work from home. We are fully operational and continuing to work on client assignments. Where possible, meetings are being held via video link or by telephone conference.

When a loved one dies, allow Baker & Company to assist you with winding up and administering the Estate. We can offer practical advice and cost-effective services to ensure that the Estate is wound up to the best advantage of the beneficiaries. Call us at 416-777-0100 or contact us online for a consultation.

Categories
Probate & Estate Administration Wills & Estates

The Rule of Convenience & the Distribution of an Estate

There is a lot that estate trustees must balance when administering an estate through the probate process. They need to pay attention to the beneficiaries, paying any debts of the deceased, probating the Will, and keeping up with tax obligations. Something else that trustees should keep in mind, particularly when it comes to timing, is the Rule of Convenience.

What is the “Rule of Convenience”?

The rule is a principle of common law, which states that where a Will does not specify a time for carrying out a legacy under the Will, the payment should carry interest if it has not been paid by the one-year anniversary of the testator’s death. Therefore, if no specific timing is specified, testators need to ensure that they have distributed the estate to the beneficiaries within one year of the death, or the estate will be liable for interest on top of the inheritance itself.

Significant Interest Owed to Beneficiaries, Despite Beneficiaries Causing Delay in Part

A father with three surviving children, a son and two daughters, had drafted a Will that allowed for a relatively even distribution of his assets among them. A number of years later, the father drafted a new Will. In this one, he left each daughter a legacy of $530,000, and then the residue, which was considerably more than the two legacies, to his son. The son was also named as the executor of the estate.

After the father’s death, the daughters challenged the last Will, claiming their father had been unduly influenced by their brother. They were ultimately unsuccessful in their challenge, and the litigation delayed the payment of their legacies. Despite their role in the delay, the sisters then brought a claim for interest on their legacies, citing the rule of convenience. The interest payments they claimed would come from the residue of the estate, reducing the amount the brother ultimately received.

The lower court found in favour of the brother, citing the sisters’ role in delaying the payment of their legacies due to the Will challenge. however, when the sisters appealed the decision, the Court of Appeal overturned the lower decision and found in their favour.

Finding Any Other Way Would Discourage Litigation Going Forward

The Court of Appeal reiterated the importance of upholding the principle of the Rule of Convenience. Even though the sisters’ litigation had been the primary cause of the delay, it would be unfair to cite this as a reason not to grant them the interest they were entitled to. The Rule had been invoked in order to promote predictability and certainty in the distribution of an estate. If the sisters were denied their right to interest, it would have a chilling effect on future estate litigation, whether the action had merit or not.

In the end, the Court of Appeal awarded the sisters each 10% interest on their legacy, resulting in an interest award in the amount of $53,000 for each sister, which came out of the brother’s entitlement to the residue.

Estate trustees should keep this decision in mind when planning the administration of an estate, as an interest award can be significant and can massively affect an estate’s bottom line. On the other hand, courts should be wary of meritless claims made simply to create a delay, thereby ensuring beneficiaries of an extra entitlement to the estate.

At Baker & Company, our Toronto estate planning lawyers can help testators through the probate and estate administration process, ensuring that deadlines are met and all obligations are fulfilled. We have extensive experience in guiding estate trustees through this process and representing them in litigation should that become necessary. Call us at 416-777-0100 or contact us online for a consultation.

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Litigation Probate & Estate Administration Wills & Estates

Declaratory Relief and Limitation Periods

We have posted previously on the topic of limitation periods as they pertain to civil litigation in Ontario, however, we did not discuss the specific instance of an action seeking declaratory, rather than consequential, relief. A recent Ontario decision was faced with the question of whether an application was outside the limitation period, and whether the relief the applicant sought was purely declaratory.

What is the Difference Between Declaratory and Consequential Relief?

Consequential relief is what an applicant is generally seeking when bringing an action in court. They seek an order that something will happen; payment of damages, an injunction being granted, or an award of support. They have brought the action in an effort to bring about a certain consequence.

Declaratory relief is when an applicant presents a legal question to the court seeking only a declaration with respect to the parties’ rights. There is no consequence sought beyond the court’s opinion on the matter.

A Recent Decision

Limitation periods, typically a two-year period in Ontario for most civil actions, do not apply to matters that seek a purely declaratory order. This is not controversial. A recent decision, Piekut v. Romoli, required the court to make a determination as to whether an action was statute-barred due to being outside the limitation period. The sole basis for this determination was whether the relief sought was consequential or solely declaratory.

The case involved two of the three daughters of a deceased man. Each of the man’s daughters had been appointed as Estate Trustees under their father’s Will. Each of the daughters was also a beneficiary under the Will, which had stated that the residue of the estate was to be divided equally among the deceased’s three daughters, one of whom was not a party to this action.

However, after the death of her father, the respondent daughter presented a codicil which she claimed her father had executed two years before his death. In this codicil, the father gifted two of his properties to the respondent daughter alone.

The plaintiff daughter and the third sister were unsure how to handle the codicil, which they felt was not valid. Due to the disagreement between the daughters, they did not attempt to probate the Will for several years after their father had passed. Eventually, the plaintiff brought an application seeking an order as the validity of the codicil so that she could carry out the administration of the estate. The respondent sought to dismiss her sister’s application as it had been brought outside the two-year limitation period.

The Court’s Findings

The key issue in the case became the determination of whether the relief sought was purely declaratory or if it involved a degree of consequential relief. The court noted that no action had ever been brought to prove the validity of the codicil one way or the other. Had the respondent brought an action to prove the validity of the codicil and the plaintiff had challenged it, the relief sought would have been consequential, with each party seeking a specific outcome from the court. In that case, the limitation period would have applied.

However, in the case at hand, the applicant did not seek that the court award the properties in question to anyone in particular. She simply sought a declaration as to the validity of the codicil. Once a declaration was made, she would move on to the administration of the estate in accordance with the court’s determination. While there was no question that consequences would flow from the declaration of the court, the plaintiff did not seek one consequence over another. This was the key distinction for the court.

The two-year limitation period will still apply to most civil actions, however, it is important to understand the difference between the types of relief that may be sought. Seeking a declaration rather than an outcome could be a way to resolve an ongoing matter than has progressed beyond the statutory limitation period.

At Baker & Company, our Toronto estates and litigation lawyers can help you establish an estate plan tailored to your needs, or bring or defend a challenge in court. We have extensive experience and expertise in providing you with estate planning advice and implementing your desired plan. We also rely on our broad base of experience and expertise to provide you with exceptional legal guidance in any litigation matter when necessary. Call us at 416-777-0100 or contact us online for a consultation.

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Estate Planning, Will Planning, Succession Planning & Inheritance Planning Litigation Probate & Estate Administration Wills & Estates

Dependant Relief Claim

When a person passes away without a will, or intestate, the distribution of the estate’s assets is determined by Part II of the Succession Law Reform Act (the “Act”). For example, a spouse will be first in line, followed by children, and so on. However, it is important to note that this part of the Act only applies to married spouses. What happens in a case where the deceased had a common-law spouse at the time of their death? What are the entitlements owing to that spouse, if any?

Dependant Relief Claims Explained

Common-law spouses retain a right to claim a portion of their spouse’s estate in the form of a dependant’s relief claim. These claims are governed by Part V of the Act. In order to make a successful claim for dependant’s relief, a spouse must be able to demonstrate that they were in a common-law relationship with the deceased at the time of their death. In cases where the deceased did have a will, the spouse must also establish that the will failed to provide adequate provisions for their ongoing support.

Once the spouse has established their right to a claim, the court must then determine the amount of the award. To do this, the court will review a number of factors set out under s. 62, including the following:

  • the dependant’s current assets and means;
  • the dependant’s capacity to contribute to their own support;
  • the dependant’s age and physical and mental health;
  • any agreement between the deceased and the dependant;
  • the claims of any other dependant of the deceased; and
  • the length of time the spouses cohabitated.

These are just some of the factors enumerated in the Act. The full list can be viewed under s. 62(1) of the Act.

A Recent Example

A recent decision of the Ontario Superior Court examined a classic scenario of a common-law spouse’s claim for dependant’s relief. In the case at hand, the deceased died intestate and was survived by an adult child and his common-law spouse. Under the laws of succession, the entire estate, valued at $2,851,125.77, would have gone to the daughter of the deceased. The common-law spouse brought a claim for dependant’s relief, seeking an award of half the value of the estate. Specifically, she sought an absolute transfer of the farm property where she resided with the deceased, which was valued at $580,000.00. In addition, she sought to keep all funds and assets she had received to date, which totalled approximately $570,000.00 and then a further cash payment of approximately $275,000.00. This would leave both the applicant and the respondent with approximately equal shares in the estate.

At the time of her spouse’s death, the applicant was 73 years old. She had no physical or mental health issues and was not employed. She resided on a farm property owned by the deceased, where she had lived and worked since 1991. She had originally met the deceased when he hired her to work as his housekeeper, however, a romantic relationship developed over time. Tax records indicated that the pair had declared themselves to be common-law spouses beginning in 1999.

Records showed that the applicant had paid into the household expenses over the years, including veterinary bills, small tools for the farm, home appliances, and food and clothing for the couple.

The court examined what the applicant would require in order to maintain her own care, with the contemplation of the applicant eventually relocating to a one-bedroom accommodation in a nursing care facility. Relying on expert evidence, the court found that the applicant would be likely to suffer a shortfall if she was entitled only to the assets already in her possession. Given that the estate was sizeable enough to provide for the applicant, the court found that the deceased had failed to provide adequate support.

Once the applicant had successfully established a claim against the estate, the court then turned to the amount. While the court considered providing a life estate in the farmhouse for the applicant, it found that there was a contentious relationship between the applicant and the deceased’s daughter, and a life estate in the home would prolong the need for the parties to interact with each other. Under the circumstances, the court held that both parties would be better served by ordering a transfer of the farmhouse to the applicant.

The court ultimately found that a judicious spouse would have provided for the applicant’s care and her ability to live in relative comfort for the remainder of her life. Given that, the court ordered that the applicant keep the assets already in her possession in addition to the transfer of the farmhouse, and also awarded a further payment of approximately $275,000.00. The applicant received everything she had requested, which amounted to half the value of the estate.

Takeaways

This case serves to illustrate how the law can help to make up for a shortfall when a person dies without properly providing for a dependant. Just because a person has been left out of the will, or in a case where there was no will at all, it does not mean that they are without options. If you find yourself facing a similar circumstance, seek the advice of a skilled wills and estates lawyer.

At Baker & Company, our Toronto estate planning lawyers can help you establish an estate plan tailored to your needs, no matter your current family status. We have extensive experience and expertise in providing you with estate planning advice and implementing your desired plan. Should you find yourself in the position of challenging an existing will or estate, our lawyers can also represent you through the litigation process. Call us at 416-777-0100 or contact us online for a consultation.