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Wills and Estates

The drafting of wills and powers of attorney, and the planning and implementation of personal estate plans, has grown more complex over the last two decades. Shibley Righton LLP has a team of top notch lawyers whose experience enables them to assist our clients with matters involving:

  • will drafting at all levels of complexity
  • acting as estate trustee
  • litigation for both estates and beneficiaries in resolving disputes over will interpretation, executor and trustee duties and compensation, competency and all other aspects of the estates process

The firm's wills and estates clients include a broad cross-section of individuals. A significant portion of our wills and estates practice is also representing major national charities in matters relating to wills and estates. (We also represent these charities in a broader capacity, through our Business Law group.) Whether acting for an individual or one of Canada's largest charities, we have the expertise to meet their varying needs quickly, efficiently, and thoroughly

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Publications

Description

Matthew Urback Head ShotEveryone has the ability to deal with their assets in any way they see fit during their lifetime. The theory goes that one should have that same ability upon death.

Testamentary freedom is an unassailable concept in Canadian law. There are very few ways in which a testator's authority to deal with their estate – in whatever way they wish – is fettered.

Once example is through dependant's support legislation. The determination as to who is a dependant and to what extent a dependant shall be compensated varies greatly from province to province.

This is an excerpt from an Ontario Bar Association, please click here to read the rest of the story.

Date_Published
2020-05-04
Description

Marlin Horst head shot

Testators can head off the threat of an estate dispute by explaining decisions to family members before death, says Toronto corporate and estates lawyer Marlin Horst.

“The worst situation is where someone passes away, and the family is shocked by the contents of the will,” says Horst, a partner with Shibley Righton LLP. “It shouldn’t be that way, but it’s that lack of communication that leads to so many family disputes.”

A recent survey carried out by TD Wealth identified family conflict as the biggest threat to estate planning, with almost half — 46 per cent — of respondents claiming it was their biggest worry. That figure was almost double any other concern, with market volatility and tax reform trailing behind at 24 per cent and 14 per cent respectively.

Digging even deeper into the issue of family conflict, 30 per cent of respondents cited beneficiary designation as the biggest point of contention. Other leading causes of conflict were non-communication and blended families, according to the survey.

The results come as no surprise to Horst, who advises his clients to forewarn family members about any decisions that depart from the norm.

“There are a few assumptions made in families that will not always hold true,” he tells AdvocateDaily.com. “So when a client wants to give a large portion to charity or differing amounts to their children, I ask them to think long and hard about it, and then to explain to their children what is going to happen and why.”

According to Horst, parents will frequently have understandable reasons for differential treatment of their children in a will, and he says the simple act of disclosing them offers a release valve for any developing sibling resentment.

“Parents may base the allocation on the actual or perceived financial need of each child,” he says.

But even equal treatment among children is no guarantee of smooth estate administration, especially in cases where one sibling feels they are more deserving than the others.

“It’s not unusual for the bulk of caregiving responsibilities for elderly parents to fall on one child, so if they get the same share as siblings who did nothing, that can cause strife, even though it’s a typical way to divide an estate,” Horst explains.

He says another common gripe can see bereaved family members divided along generational lines when testators make their bequests to their grandchildren rather than their direct offspring.

“It comes up more often in wealthier families, but the children of the deceased are offended because they see it as an indictment of their ability to be good stewards of the family wealth,” Horst says.

While he acknowledges some estate disputes are unavoidable, he says the chances are reduced when testators are open about their intentions.

“Communication is key in my mind,” Horst says. “At the same time, estate litigation is one of the fastest-growing areas of the law, and we’re going to be seeing a lot of movement in the coming years as the aging Baby Boomer generation — the wealthiest to ever live — transfer their assets to their children.”

 

 

Date_Published
2019-11-18
Description

Marlin Horst head shot

Dying without a will is a selfish decision that can add financial hardship to families suffering with grief, legal experts say.

“When you don’t do anything, and there is a problem, you’re leaving it to somebody else to solve the problem, and that’s no kindness to the people that are grieving a person’s death,” says David Freedman, associate law professor at Queen’s University.

More than half of Canadians don’t have wills. Some people don’t like considering their death, while others carry misconceptions about how their estate will be distributed.

Among the big errors is assuming that all assets will go to the surviving spouse if there are children.

There’s no guarantee that will be the case anywhere in Canada. Provincial rules vary, with some allocating the first $200,000 or $300,000 to spouses, while others pass along one-third of the estate when there are children.

Common-law spouses can wind up with nothing in Ontario, Quebec, New Brunswick, Newfoundland and Labrador, and Nova Scotia, although they can be named beneficiaries outside the will for RRSPs, TFSAs or life insurance.

In Quebec, common-law couples have the same rights as those who are married by entering into civil unions.

The law says those without a will have died “intestate” with no instructions as to how their property should be divided and distributed.

That can put beneficiaries through a wild and costly maze involving the courts that can cause family friction and ill will.

“If you care about any people while you’re alive to leave them without a will you’re leaving people with such a mess,” says Tim Hewson, president of Legalwills.ca, an online service available in Canada outside Quebec.

Failing to have someone in charge of the estate can tear families apart, he said in an interview.

“Families who have previously got along just fine, if there’s no process, theres nobody in charge, then that can cause a lot of animosity and acrimony in families.”

In an interview with AdvocateDaily.com, Toronto wills and estate lawyer Marlin Horst says, it’s not really surprising” that so many people have put off the task.

“People generally do not want to consider their own mortality,” he says. “In particular, younger people do not believe it is an issue.”

Horst, a partner with Shibley Righton LLP, says the issue becomes more complicated in the case of blended families.

“If a person dies intestate and they are part of a blended family it becomes increasingly difficult to determine how the assets will be divided, Horst says. “For example, are stepchildren dependents? The result may not be at all what the people involved thought would happen.

“In the modern world, the blended family issue is very important, and the law has not really caught up with that,” says Horst.

Having a will makes it simpler and less expensive to settle the estate and avoid the family arguments that sometimes end up in court, says Quebec notary Benoit Rivet.

“A lot of times, family problems will resurface with grief, and not having a will only escalates the problem. Because of this, they may end up in court simply because they can’t get along and are arguing about something that happened 30 years ago.”

He added that a notary can also ensure that the proper steps are taken to protect the heirs, who would be responsible if the estate has a lot of debts.

The forced distribution of assets wouldnt likely reflect what most spouses would wish, and could see siblings or distant relatives inherit the estate even if the common-law couple had been in a 20-year relationship.

While Canada Revenue Agency recognizes common-law relationships after 12 months of cohabitation for taxation purposes, some provinces, including Ontario and Quebec, don’t for the purpose of inheritances.

The Western provinces of Alberta, Manitoba and Saskatchewan give common-law spouses some rights to property if they have been living together for two or three years or have a child together, said Sandra Foster, author of You Can’t Take It With You: Common-Sense Estate Planning for Canadians.

“There are many ways to define family, and only in a few provinces have the definitions of family under intestate even moved a little bit forward and become more modern,” she said in an interview.

“It could mean that the common-law spouse could end up with much less than they assumed that they would get.”

The living spouse would be forced to sue the estate for “unjust enrichment” to try to replicate how much of the family property would be available to her or him, said Freedman.

“Things can be done, but youre playing a game of chess where every move is very expensive.”

Meanwhile, an estranged spouse of the deceased would still have a claim to the estate in some provinces since they arent divorced.

The lack of a will can be especially difficult when there are minor children. The court could be called upon to oversee the process and make financial decisions.

In Quebec, the surviving spouse may be entitled to half the value of family patrimony, including residences, furniture, vehicles and pension plans. The spouse would also receive one-third of the estate while two-thirds would be held for the children and be distributed automatically when they reach the age of majority, often not an ideal age to receive a large sum of money.

If the deceased does not have any children, the surviving spouse would receive two-thirds of the estate while one-third would go to the deceaseds parents and siblings.

A family living in Ontario with a surviving spouse and two children would see the spouse receive the first $200,000 and a third of the remaining estate, with the rest split equally between the children.

The guardianship of the children of single parents can be especially traumatic since a judge could have to decide the most appropriate person to care for the children without personally knowing any of the parties.

“So the children may be going to the wrong person,” said Hewson.

Horst says the solution is simple.

 

Date_Published
2019-10-15
Description

Matthew Urback Head Shot

Technology may be expanding our horizons faster than ever imagined, but don’t expect to see the legal acceptance of video wills any time soon, says Toronto wills and estates lawyer Matthew Urback.

“I think it might be the direction we’re going, although I don’t think it could happen tomorrow,” says Urback, a partner with Shibley Righton LLP. “The way that technology is changing, it’s not outrageous to think that we could see legally acceptable video wills in our lifetime.”

The biggest drawback is that video wills are not binding under our current laws, he tells AdvocateDaily.com.

“Basically, there are certain formalities that you have to meet in order to have a valid will,” Urback says. “The Succession Law Reform Act clearly states a will is valid only when it’s in writing.”

If you write your will, it must be in your handwriting and signed, he explains. If it’s typed, you must sign it in the presence of two witnesses who do not benefit under the will.

“If courts are going to start accepting video wills, the question is, ‘What are the formalities that capture the spirit of what you’re looking for with handwritten wills?’” Urback says. “Obviously, you can’t sign it because it’s a video. Would you have to do something to verify a copy of the recording? Do you have to save it a certain way to show that it wasn’t coerced?”

One of the biggest concerns of video wills would be the danger that they could be compromised, he says.

“As technology gets more complicated, the ways in which video can be manipulated are probably beyond what I understand,” Urback says. “But it’s a natural progression. That’s the way our world is going, but at the same time, I think it’s inherently vulnerable.”

He notes technology changes so quickly that it may be difficult to ensure the necessary safeguards are in place.

“It’s like you have you a coevolution — some people are trying to manipulate things, with the other side trying to catch them and develop checks to the system,” Urback says. “One is trying to stay ahead of the other. It’s almost like the sky’s the limit for manipulation.”

Currently, handwriting experts can be called in to determine if a will is valid, but it may be a more challenging process with video wills, he says.

For now, video can be useful to accompany the written will — almost like “a letter of instruction to your executor,” Urback says.

“It’s not binding, but it can be persuasive to your loved ones to leave special instructions,” he says.

Urback says he is “in favour of trying to evolve,” and thinks it will be interesting to see how the issue unfolds in coming years.

“I would recommend moving in that direction,” he says. “It might become a more tempting option, but I don’t think we’re there yet in terms of how we’re actually going to accept it. There are still too many questions.”

Date_Published
2019-10-02
Description

Marlin Horst head shot

A recent Nova Scotia Supreme Court decision upholds the legal principle that people can leave their estate to whomever they want, provided they are fulfilling their support obligations, says Toronto wills and estate lawyer Marlin Horst.

“This judgment reinforces that testamentary autonomy can only be limited by legislation that specifies who is eligible for financial assistance upon the testator’s death,” says Horst, a partner with Shibley Righton LLP.

Court documents show that a man who owned several residential income-producing properties in Halifax left $50,000 each to two of his three grown daughters, and the rest of his estate to his son.

The three daughters commenced an action pursuant to the Testators’ Family Maintenance Act (TFMA), alleging their father’s will failed to make adequate provisions for them. According to the judgment, in Nova Scotia “to be a ‘dependant’ within the meaning of the definition does not require actual dependency or need. One need only be a child, widow, or widower of the testator.”

In response, court documents show, the son brought an application seeking a declaration that the TFMA provisions allowing independent adults to seek support from an estate violated s. 7 of the Canadian Charter of Rights and Freedoms, which reads: “Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.”

The judge ruled in his favour, saying that “A testamentary decision is a fundamental personal decision that is protected under s. 7.”

While this judgment is not really applicable to Ontario, since the two provinces have different rules around testamentary succession, Horst tells AdvocateDaily.com this case does provide a good summary of the case law in this area.

“In Ontario, a dependant is someone who is, or who should have been, supported in some way immediately prior to the testator’s death,” he says. “Under the Nova Scotia legislation, there is sort of a legal and a moral obligation to provide adequate support for your spouse and children, so this case revolved around what is adequate support, in a legal and moral sense.”

Horst says he is glad to see the judge found the TFMA language violated the spirit of the Charter.

“We should always start from the premise that people have complete autonomy when they draft their wills,” he says.

“So unless there’s legislation that specifically says you cannot do something, the testator has the freedom to deal with their property any way they see fit,” Horst says. “Parents sometimes disinherit their children. That happens.”

In Ontario, he says the rules around testamentary succession are tied into the Family Law Act (FLA), which stipulates that people have an obligation to provide support to dependants, which can be a spouse, a child or a parent

“The legislation in Nova Scotia is not as well defined, so I was pleased to see the judge read down the provisions, and decided to exclude non-dependent adult children from the definition of a dependant, which is already what we have in Ontario,” Horst says.

He notes the decision may lead to changes in Nova Scotia, as well as in British Columbia and Newfoundland-Labrador, which were identified in the judgment as having similar legislation.

“I think those three provinces will probably revisit their legislation at some point, to make it a little more strict and to avoid this kind of circumstance,” Horst says.

Another important difference between Ontario and Nova Scotia is that Ontario's Succession Law Reform Act provides that if one spouse dies, the surviving spouse has the choice to take what is provided under the terms of the will or to ask for the matter be dealt with under the terms of the FLA.

“For example, if one spouse died and left everything to their children and nothing to the surviving spouse, that person could make a family law claim against the estate, and it would be dealt with as if they separated on the date of death,” Horst says.

Date_Published
2019-09-18
Description

Marlin Horst head shot

Removing the executor of a will is a difficult proposition — and for good reason, says Toronto wills and estate lawyer Marlin Horst.

Horst, a partner with Shibley Righton LLP, says it’s not enough for someone to say, “I dislike the fact that a certain person has been named executor.”

“The courts are loathe to remove an executor unless there’s something really seriously wrong with the naming of that person. It’s a fairly high standard,” he tells AdvocateDaily.com. “I think it is a good thing. The courts don’t want to intercede when someone actually gave thought to how they wanted their affairs dealt with after their death.

“The most important thing people should bear in mind is that courts will not generally step in to remove an executor unless there’s some really clear conflict of interest or some undue influence. It has to be pretty strong evidence.”

Pointing to a recent court decision, Horst says successfully arguing for the removal of an executor is a challenge.

In the case, a woman was named the executor of her grandmother’s estate, but her younger sister and mother argued in court that she should be replaced by a trust company because of “an untenable conflict of interest.”

Court was told a woman named her eldest granddaughter executor in 2008, and on June 27, 2018, one month before her passing, she reiterated her wish. The woman called a “family meeting two days later and confirmed her choice, saying her eldest granddaughter ‘had always been there for her.’”

The mother and sister argued a conflict arises out of a separate claim against the granddaughter that they filed under the Wills, Estates and Successions Act (WESA) that states, among other things, that the will made “inadequate provision” for the mother.

Court heard the claim also alleged that prior to her death, the grandmother transferred an interest in a Vancouver property she owned to the granddaughter she named as executor.

However, the court found “the administration of the estate in this case can safely be kept separate from the defence of the WESA” claim, and ruled there was no reason to replace the woman as executor.

“It is very difficult to get somebody removed as an executor because the standards are so high,” Horst says. “Here, for example, there was even a lawsuit, but because that lawsuit was not specifically in respect of the will, the court said this is not a conflict of interest.”

He says it comes down to respecting the wishes of the person who drafted the will.

“If someone put their mind to it and says, ‘I want this person to be the executor,’ the courts are going to sit back and say, ‘This person gave some thought to this, we’re going to abide by their wishes unless there is something seriously wrong with the choice they made.’”

 

Date_Published
2019-08-19
Description

Matthew Urback Head Shot

Online will kits are affordable and easy to use, but they deny the testator the opportunity to have meaningful discussions with a professional about individual circumstances and wishes, says Toronto wills and estates lawyer Matthew Urback.

“The problem with these kits is that they are really just importing your financial data and your primary wishes about your estate, without giving you any opportunity to get legal advice,” says Urback, partner with Shibley Righton LLP.

“For lawyers working in this field, part of the will-drafting and estate-planning process is taking stock of an individual’s particular circumstances and making recommendations based on what would work for them,” he tells AdvocateDaily.com.

According to an article in Betakit, one particular online platform “aims to simplify the process of estate preparation by getting more Canadians to create a will.”

Urback agrees that is an admirable goal, citing a 2018 Angus Reid poll showing 51 per cent of Canadian adults don’t have a will, while another 15 per cent have out-of-date wills.

“Put that together, and you see that 66 per cent, or two-thirds of adults, don’t have a proper will, which is shocking,” he says.

Urback says he can understand how online services will appeal to millennials who may not have assets or dependents.

“Online kits are better than nothing, but much of the detail and intricacy that a human lawyer can bring to the estate-planning process will be lost,” he says.

Some of these services claim that users can create a will in 20 minutes, Urback says, adding that a lawyer may spend at least that long just explaining the legal implications of the document to clients.

“If you go online to make a will, I think you’re flying blind,” he says.

According to the Betakit article, the Toronto-based will-creation company wants to build “a suite of products that not only help consumers prepare for death through a will but also through other arrangements that are often overlooked, like wrapping up debt and online and social media accounts.”

Urback wonders how the company will tackle the issue of wrapping up social media accounts since there are so many types, and each has unique policies.

“Social media accounts all have different terms of service, and various rules about what happens when a subscriber dies,” he says, giving the example of Facebook, which allows the estate to either take down the deceased’s page or turn it into a legacy page, similar to a guest book in a funeral home, where people can leave comments.

“I don’t know how they can claim it will be painting with such a broad brush, as social media accounts are all so different,” he says.

At the same time, Urback agrees that people need to think about making provisions in their will as to what should be done with their social media accounts.

“In the future, I can envision people appointing a digital estate trustee, who would have to be very familiar with social media,” he says. “That person would be tasked with carrying out your wishes concerning online accounts, recognizing that you are leaving a footprint.”

Urback asks clients if they want to address their social media accounts in their wills, but he says most don’t think it’s necessary.

“I’m not really sure why that is,” he says. “I think it would be different when you combine a social media account with something that has monetary value, such as Bitcoin or Air Miles. When you put those together, people will look at it a bit more closely, but right now, it’s not at the forefront of people’s minds.”

When dealing with a lawyer to create a will, Urback says people can learn about various options for leaving their estate to others, such as staggering the gifts, giving the example of a quarter of the estate being handed over when a child turns 18, another quarter at 21 and the remaining half at 25.

“You may not be offered that flexibility with online will kits,” he says. “And since you are dealing with a computer, it will never have the personal touch a human can offer.”

Urback says another drawback, at least in Ontario, is that people can’t digitally sign a will, meaning they still have to be printed off and signed in front of two witnesses.

“Online will programs are better than nothing,” he says, “though users will lose much of the detail and finesse that legal professionals can offer, due to the inherent limitations of the program.”

 

Date_Published
2019-07-22
Description

Marlin Horst head shot

Failing to fulfil your obligations in a divorce settlement can be costly, even after you pass away, says Toronto wills and estate lawyer Marlin Horst.

Noting a recent Ontario Superior Court case that awarded a deceased man’s ex-wife the $500,000 she would have been entitled to in a life insurance policy that was never purchased, Horst says it’s also important to ensure any agreement you make is clearly defined.

Court heard that when the couple divorced, the ex-husband agreed to take out a $500,000 life insurance policy naming his former wife as the irrevocable beneficiary. However, the man failed to secure the policy.

When he died, his ex-wife made a claim against his estate, and the court ruled in her favour.

“It’s the right judgment,” says Horst, partner with Shibley Righton LLP. “The requirement was to maintain life insurance and the individual failed to do that.

“Prior to his death, his ex-wife could have sued him for not maintaining a policy so that same suit can go against the estate.”

At the time the marriage broke down, there was an agreement in place that entitled the ex-wife to spousal support along with being named the beneficiary in the insurance policy, according to court documents.

At issue before the court was whether the policy was simply intended to “secure” payment of spousal support in the event the man died before his obligations were fulfilled.

However, in his summary judgment, Justice Michael Varpio ruled that the separation agreement contained no definitive language to indicate that the purpose of the policy was to ensure support was paid to completion, and “there is no genuine issue for trial insofar as the insurance obligation.”

“The judge made it pretty clear that the requirement to maintain insurance was not tied to the support,” Horst tells AdvocateDaily.com. “Often, support obligations run out at a certain point in time, but there was nowhere in the life insurance provisions stating that the life insurance could be terminated after the support obligations ran out. It was pretty obvious that there was no need for a trial on that point.”

He says the case also serves as yet another reminder to be clear when drawing up contracts.

“I think what it does say is that if you’re a family lawyer and you want to tie life insurance to spousal support, you better make it clear in the agreement,” Horst says. “There nothing here that said they were connected in any way.”

 

Date_Published
2019-07-05
Description

Matthew Urback Head Shot

Celebrities are just like the rest of us when it comes to estate disputes, says Toronto wills and estates lawyer Matthew Urback.

Billboard magazine recently reported on the ongoing and escalating battle between Tom Petty’s widow and the daughters of the musical superstar, who died from an accidental drug overdose at the age of 66 in 2017.

“This is a dynamic we see all the time in disputes, whether the estate is large, small or somewhere in between,” says Urback, partner with Shibley Righton LLP. “Issues between the spouse and children of the deceased frequently arise, particularly in situations where you have a second marriage, and the surviving spouse is not a parent of the children.

“Nobody is immune to these kinds of problems, which seem to almost transcend economic status,” he tells AdvocateDaily.com.

According to Billboard, a series of lawsuits have been filed in California courts by the singer’s two daughters and his wife, with each side accusing the other of standing in the way of the late star’s wishes.

In one case, a daughter alleged Petty’s wife prevented the sisters from “participating equally in the management” of their father’s estate by restricting the flow of his assets into Petty Unlimited, a company he created so that his two children and second wife could share the proceeds of his legacy, Billboard reports.

Another claim commenced on behalf of that company seeks $5 million in damages from Petty’s wife, accusing her of setting up a new entity, Tom Petty Legacy, “as a vehicle through which to deprive” it of the singer’s assets.

Meanwhile, the magazine reports that Petty’s wife launched her own action accusing the sisters of thwarting her role as “directing trustee” of Petty’s estate. All of the allegations have yet to be tested in court.

Although the details of the cases are murky, Urback says there are lessons for testators who wish to minimize the chances of expensive litigation between beneficiaries after their death.

For example, he says people will frequently appoint multiple executors without giving much thought to the issue.

“If you are granting more than one person authority to deal with your assets, it’s important to consider the dynamics between those people, and whether they can get along,” says Urback, who is not involved in these cases and comments generally.

Testators can add another layer of protection by inserting a dispute resolution clause that governs how trustees should proceed if they cannot agree among themselves.

In estates where more than two trustees are appointed, a majority vote may be suitable, Urback says, but even then there could be trouble.

“In the Tom Petty case, the daughters are saying they want ‘equal participation’ with the wife in decisions, but that term is a little ambiguous in this case because there are two of them and only one spouse. If they each got one vote, then the sisters would be able to win by voting in a block,” he says. “That’s a good example of how a phrase that appears clear when it stands alone might mean something else entirely in a different context.

“Testators may need to tweak common words and phrases to consider the circumstances of their own family and estate to ensure their intentions are reflected,” Urback says.

Date_Published
2019-06-21
Description

Laura Stairs Head Shot

Beneficiaries and would-be beneficiaries are often unhappy about the contents of a will, but launching a challenge isn’t an easy thing to do, says Windsor wills and estates lawyer Laura Stairs.

“It’s very difficult, but something that comes up all the time,” says Stairs, associate with Shibley Righton LLP.

Stairs points to a British poll that shows millions would challenge a will if they don’t like its contents. Although the Independent reports that many would go to court over how the assets are divided, Stairs has found that money is not necessarily the main issue.

“In my experience, the amount is often irrelevant. It has more to do with the emotions going on behind the scenes — the beneficiaries’ feelings about how the rest of the estate was divided and how the estate trustee is handling everything. It’s usually more of a family conflict than the amount of the inheritance,” she tells AdvocateDaily.com.

When finances do come into play, Stairs says it’s often because the distribution is uneven.

There are a few options for those who want to challenge the will, she explains. They can claim the testator was incapable at the time of making the will, that they were unduly influenced, or that fraud was somehow involved. They could also claim the signature on the will doesn’t belong to the testator.

“But the court gives much deference to a testator’s wishes,” Stairs says. “It’s always going to be very challenging to make any kind of argument to say there are issues with the will.”

She says substantial evidence is required to prove the testator did not know what they were doing and did not have capacity when completing the will. However, Stairs says any lawyer involved in drafting a will does conduct their own capacity assessments to ensure the client is aware of what they’re doing.

Any indication that an uneven amount will be left to the beneficiaries, such as the children, can be a red flag for a lawyer that a future challenge is possible, Stairs says.

“If a challenge looks possible, you should take extra precaution to make sure you understand the testator’s capacity, that you write notes about the meeting, and that you make clear to this individual that challenges could come up,” she says.

In some situations, Stairs may encourage her clients to take precautions such as leaving a note in the will confirming the uneven distribution.

Undue influence is another ground for having the will voided, she says. A typical situation might involve a beneficiary who serves as an elderly parent’s caregiver and takes the parent to the appointment to make the will, and then receives more than the other siblings named in the document.

“We have a private conversation with the testator without that other person present to confirm their instructions and wishes,” Stairs says.

Fraud is another ground to challenge a will, although Stairs says that doesn’t come up very often.

She says frustrated family members sometimes focus their attention on the estate trustee and may make a claim against that person. Allegations might include that the trustee took something they weren’t supposed to, has done something inappropriate, or divided the assets incorrectly.

“These situations can be highly emotional and stressful,” Stairs says. “To go through the legal process in these matters can be overwhelming and exhausting for all involved.”

 

Date_Published
2019-05-24
Description

Matthew Urback Head Shot

Testators should steer clear of ambiguous language if they wish to avoid a will challenge after their death, says Toronto wills and estates lawyer Matthew Urback.

In a recent decision, Alberta’s Court of Appeal upheld a lower court judge’s decision to include personal items located on the deceased’s property in the award to his surviving daughters after he bequeathed his "home" to them. That ruling came over the objections of the dead man’s brother, who hoped to inherit the disputed items as the beneficiary of the estate’s residue.

Urback, partner with Shibley Righton LLP, says the case should serve as a warning to testators, especially those with modest estates where litigation can easily erode a significant chunk of it.

“Include more detail and don’t use ambiguous language,” he tells AdvocateDaily.com. “It should all be designed to allow someone looking at the will to ascertain exactly what property it relates to.

“If you’re naming property, it should be described as clearly and concisely as possible. Some people will spell out the address or give some type of legal description,” Urback says.

The testator in the case died in 2014, a decade after signing a will that left his home to his two daughters, with the residue of the estate to go to his younger brother and business partner, who was also named executor of the estate.

When a dispute arose as to whether "home" should include personal property of the deceased, a judge ruled in favour of the daughters, concluding that they could inherit four motorcycles, a motorcycle trailer, truck and other items in the garage at their father’s place.

The unanimous three-judge appeal court panel found the trial judge made no reversible errors in his decision and was within his rights to accept extrinsic evidence from a friend of the deceased, as well as to interpret “home” broadly to include personal property that contributes to its enjoyment.

“There is ample evidence to support the court’s conclusion that the testator intended 'home' to be interpreted broadly. This interpretation is the best match for the testator’s object of financially assisting his daughters after his death,” the appeal court concluded after consulting several English-language dictionaries to confirm the word’s use to convey multiple meanings.

“I’m not surprised with the way the decision was reached, but it was interesting to me that the 138-paragraphs essentially came down to one word, and it looks like it was the authority of the dictionary that gave the motions judge the authority to look beyond the four corners of the will,” Urback says.

Alberta’s Wills and Succession Act provides statutory authority for judges to call extrinsic evidence as to a testator’s intentions, but Urback says it’s likely an Ontario judge would have reached a similar conclusion based on common law that allows judges to admit such evidence, as long as the contents of the will reveal some ambiguity.

“I think the wording of the will was sufficiently unclear that the evidence from the friend would have been allowed,” he says.

 

Date_Published
2019-05-23
Description

Matthew Urback Head Shot

With almost a decade of experience behind him, Toronto litigator Matthew Urback has seen it all when it comes to estate plans.

Urback, partner with Shibley Righton LLP, shares with AdvocateDaily.com some of the biggest estate planning mistakes he’s come across.

1. Not having one

“It’s kind of self-evident, but by far and away the worst thing you can do is not to have an estate plan or a will,” Urback says. “Essentially what you are doing is abandoning your right to decide what happens to your property after you die, and putting it into the hands of others.”

Although Ontario’s Succession Law Reform Act (SLRA) determines the distribution of an estate when a person dies without a will, Urback points out that its strict rules take no account of the individual’s unique situation or desires.

2. Choosing the wrong estate trustee

Administering a will is not for the faint of heart, according to Urback, who explains that the job of trustee is harder than it sounds.

While most people pick a close family member by default, he suggests testators put a bit more thought into the choice.

“People close to you might not have the financial savviness needed for the task,” Urback says. “There are pros and cons to picking a trusted person who you have a close relationship with, as opposed to a professional trust company.”

Either way, he says selecting an alternate is good practice.

“It’s helpful to have a backup option in case your first choice can’t or won’t act,” Urback says.

In addition, he says testators who pick multiple trustees could be setting themselves up for trouble.

“You need to account for disputes between the trustees, and an odd number is better so that they can break deadlocks,” Urback says.

3. Never updating

“People like to do a will, and then put it in the drawer and forget about it,” says Urback.

But establishing an estate plan is rarely a one-time event, he warns. And while wills gather dust, lives are being lived, and circumstances are changing.

“What may have been appropriate at one point in time may not work at a later date,” he says. “Things can change in all kinds of ways, and your will should be updated to reflect those changes.”

4. DIY

“It’s almost always worth seeking professional advice instead of using will kits or attempting to do tax planning on your own,” says Urback, noting that many laypeople fall afoul of technicalities hidden in the law.

For example, he says many people are tempted to avoid probate fees by adding the intended beneficiary of property to title. While the transfer of the house will bypass the estate via right of survivorship, there may be a considerable capital gains tax liability, Urback says.

“Every act has a fallout, and it’s important to understand those before making any decisions,” he says.

5. Ignoring human nature

Whenever a story about an ugly estate fight engulfing the friends and family of a prominent person makes the news, Urback says most people have an understandable reaction to it.

“The thought is that this could never happen to my family and me,” he says. “People don’t like to consider that their loved ones will argue and fight, but the sad thing is that nobody is above it. There’s often no rhyme or reason to the types of people it happens to.”

Urback says testators who wish to minimize the chances of a spat over their estate should communicate openly with intended beneficiaries.

“If you’re treating your children unequally in the will, you might want to explain why, either in the will or in person, even if it means some uncomfortable conversations,” he says.

 

Date_Published
2019-04-25
Description

Matthew Urback Head Shot

People who live common-law with a new partner after the breakdown of a marriage are advised to get their affairs in order — and get a will, Toronto litigator Matthew Urback tells AdvocateDaily.com.

“If that person were to die, it could be a messy situation,” says Urback, associate with Shibley Righton LLP. “Even if you were with a new spouse in a common-law relationship for decades, the law says that if you’re married, your former spouse will have an entitlement to your estate.”

The way the law treats people who die without a will — or intestate — is set out in Ontario’s Succession Law Reform Act, which explicitly details how an estate will be divided between surviving family members and relatives, “with spouse defined in that circumstance as ‘two people who are married each other,’” he explains.

If someone is in a common-law relationship and they don’t get a divorce to formally end their earlier marriage, Urback says the Act will stipulate that the former spouse has an entitlement to the estate, even if they parted decades ago.

“People should prepare a new will if they want to provide for their new spouse and any children,” he says. “If not, there is the possibility that the estate will go to the previous spouse, and the common-law partner may be left with nothing.”

When it comes to passing on your estate, “It’s much cleaner to be legally married rather than common-law,” he says.

Urback strongly recommends that everyone should have a will, and keep it updated as circumstances change.

“People want to have the freedom to make their own financial decisions in life,” he says. “Even in death, they should have the right to deal with their assets as they wish. Those without wills are abandoning that right, and their estate will be at the mercy of the law.”

If there are any dependents in the common-law union, they would be in a good position to make a claim for support, Urback says, noting the Succession Law Reform Act provides two definitions of “spouse” — one that applies to the interpretation of wills and the other to the support of dependents.

“When it comes to support, the Act doesn’t differentiate between a living-together spouse and a separated spouse,” he says, adding that anyone in a common-law marriage that has lasted for more than three years, or those in a relationship of some permanence with a child, are considered spouses when it comes to support payments.

Legal fights are quite common if someone in a second marriage dies without a will, Urback says, especially if there are children from each relationship.

“There is often tension between the children from the first marriage and second spouses,” he says. “If a parent dies without a will to spell out their wishes for the estate, that’s the start of a court battle, and a relationship that was never on solid footing has just been steered further off course.”

Date_Published
2019-03-25
Description

Matthew Urback Head Shot

Knowing when to stop the search for a will following the death of a loved one is a tough call, Toronto litigator Matthew Urback tells AdvocateDaily.com.

Urback, associate with Shibley Righton LLP, says it’s surprisingly common for uncertainty to reign among family and friends about whether the deceased actually left a will behind.

“It’s almost like proving a negative because you’re searching for something that you’re not sure actually exists,” he explains. “That means it’s hard to know when to throw in the towel.”

Each case is unique, but Urback says potential beneficiaries should be guided by their own judgment, based on their knowledge of the deceased.

“If it was someone who kept all their money under the mattress, then you’re going to have a different threshold than if it’s someone who was highly sophisticated in terms of seeking professional and financial planning advice,” he says.

If a person had a close relationship with a particular lawyer or law firm they would turn to frequently for advice, Urback says that’s the first place family and friends should check for a will.

However, he acknowledges that not everyone seeks legal advice to draw up a will.

“Other more obvious places include safety deposit boxes or any secure place in the home,” Urback says. “Next of kin will often search home offices and filing cabinets for anything that gives an indication of a will’s existence.”

Family and friends could also check with anyone previously granted powers of attorney by the deceased, or with their other professional advisors, such as an accountant or financial planner, and some testators may have registered a will with the court.

“It’s more art than science,” admits Urback, who says that may change if a recent initiative takes off province-wide. The County of Carleton Law Association’s WillCheck is a will registry for residents of eastern Ontario and their lawyers to deposit information about drafted wills. The program is designed to make the lives of trustees and testators easier.

“The idea is for lawyers to register the wills they have, so that the information isn’t lost in office moves or for whatever other reason,” Urback says. “It’s in its infancy right now, and there’s nothing required in Ontario yet, but if it catches on, that would be a quick and easy way to check if there is something out there.”

For testators, Urback says it’s a good idea to let a trusted person know about a will’s existence, as well as its location, particularly if it was drafted without the help of a lawyer.

“You don’t have to divulge what’s in the will, but you can let them know where to find it,” he says.

Failing that, Urback says testators should leave the will in an obvious hiding place, such as an office or with other important personal documents.

“The whole point of a will is for it to be found and give you some say over what happens to your assets,” he says.

Date_Published
2019-02-27
Description

Marlin Horst head shot

A former telecommunication executive’s attempt to shield family properties from his bankruptcy proceedings provides a textbook example of a sham trust, Toronto corporate lawyer Marlin Horst tells AdvocateDaily.com.

In a recent decision, an Ontario Superior Court judge ruled the trusts holding a farm and cottage for the benefit of the man’s children and stepchildren were void, relying in part on expert evidence that showed the font used in the text of the trust did not exist at the time he claimed to have drawn them up.

But Horst, partner with Shibley Righton LLP, says the font discrepancy was just the “icing on the cake” for the successful trustee in bankruptcy, whose motion to have the bankrupt’s interest in the properties declared assets of the estate — and therefore available to creditors — was granted.

“There were so many other things that pointed to the trust being a sham, and the decision lays those out in great detail,” he says. “There was very little evidence to suggest that the property was ever held genuinely in trust, and I think the result would have been the same, even without the font element.”

According to the decision, the two properties were bought in 1994 and 2003 respectively, long before the bankruptcy of the man, who claimed he had created the trusts one year after each purchase.

But the 1995 document relating to the cottage used a font named Cambria, which an expert testified did not exist until its creation for Microsoft in 2002, and even then, was not made publicly available until 2007. That year was also the earliest that a non-employee of Microsoft could have selected the font used in the trust document for the farm.

The man at the heart of the case was a senior executive at a telecommunications firm but ran into trouble in 2009 when he was removed from the board over payments to himself and other executives. In 2017, after the firm won a $5.6-million judgment against him, he filed for bankruptcy.

The trustee in bankruptcy moved for the declaration that the properties in the trust should be part of the estate, and the judge agreed that they were void as shams.

The judge cited a series of red flags surrounding the purchase of the two properties that suggested the trust lacked the requisite intention to create a valid trust, including the following:

  • the purported trust was not registered on title
  • mortgage documents made no reference to any trust
  • the bankrupt and his wife had free reign to use the cottage and paid for all related expenses without any accounting to their children
  • the lack of evidence that the existence of a trust was mentioned to anyone other than one of the couple’s sons, until years after it was allegedly created

Horst says it’s not uncommon for a vacation property to be held genuinely in trust.

“It doesn’t have to be acquired that way, but when there is a trust, it is usually either mentioned on title, or it’s made clear to the lender that it’s a trust property,” he says. “Neither happened in this case.”

Date_Published
2019-02-12
Description

peter murphy headshot

The responsibilities of an estate trustee, who administers the personal and financial affairs of a deceased person, can be greater than expected, says Toronto estates lawyer Peter Murphy.

Murphy, partner with Shibley Righton LLP, says it can be enormously helpful for an estate trustee, or executor, to become acquainted with all that’s involved before agreeing to take on the job.

“Being an estate trustee takes a fair bit of time and effort, and it often involves more than people realize unless they have experience in this area,” he tells AdvocateDaily.com.

The obligations include administering the estate according to provincial law, as well as federal requirements such as the Income Tax Act, Murphy says.

The process begins with examining the will to confirm who the estate trustee is. Murphy says it could be more than one person, which could allow them to split up the work.

"However, having multiple trustees can make decision-making more difficult," he says.

"The first responsibility," he says, "is usually working with a funeral director to take care of burial or cremation and ceremonial arrangements."

Murphy says the estate trustee must also:

  • Determine who the beneficiaries are, then find and notify them
  • Identify the assets of the estate
  • Set up a bank account for estate finances
  • Determine, settle and pay the estate's debts
  • File tax return, pay taxes and obtain a clearance certificate for the estate
  • Deal with any claims against the estate, including dependent's relief and Family Law Act claims
  • Distribute the estate's assets to beneficiaries according to the will

“When you’re looking at these obligations to pay debts and taxes, it’s often useful for the estate trustee to retain professional services like an accountant,” Murphy says. "Legal advice is also recommended, particularly for interpreting the will, understanding the estate trustee's duties, and applying to the court for probate, where necessary."

Some, but not all estates, will require probate, he says.

Depending on the nature of the assets, an estate left to the deceased's surviving spouse may not need to go through probate, says Murphy.

"Even where the sole beneficiary is the deceased's spouse, probate will be required where real estate was not held jointly with the beneficiary," he says.

“It depends on the assets in the estate, the will, the requirements of third parties, and who the beneficiaries are,” Murphy says.

“If it’s necessary, the will and other required documentation will have to be submitted to the court with an application for probate. The application is for the court to approve the will and certify the appointment of the estate trustee, who will be able to use the certificate when transferring the assets from the estate to the beneficiaries.”

Estate trustees are required to maintain detailed accounts of the estate's assets, including all amounts received, invested and disbursed," he says.

"In some cases, the trustee will be required to submit these records to the court for approval."

Murphy says people are often surprised by the extent of the record-keeping obligations.

"Not every estate trustee will have the time, knowledge and skills necessary to properly keep the required accounts," he says.

“Many trustees, particularly for larger estates, will retain professional services to assist with the detailed record-keeping that they’re obliged to do,” Murphy says.

“A substantial amount of time and effort is involved. Many people do not fully appreciate this until they find themselves in that situation,” he says.

“The appropriate time to ensure a future estate trustee is aware of everything that’s involved is during the estate-planning process,” says Murphy. “That way, the person can have an appreciation of their responsibilities and be confident acting as estate trustee when the time comes.”

Date_Published
2019-01-30
Description

Matthew Urback Head Shot

A will offers testators a measure of control over their assets even in death, Toronto litigator Matthew Urback tells AdvocateDaily.com.

“In your lifetime, you have the ability to use your property and spend money however you see fit,” says Urback, an associate with Shibley Righton LLP. “I would suggest most people would want to see that authority continue in death.

“If you don’t make a will, you’re basically leaving the allocation of your assets to the law,” he says, noting that Ontario’s Succession Law Reform Act (SLRA) sets out strict rules for the distribution of an estate when a person dies without a will.

According to the law, the deceased’s surviving spouse gets the first $200,000 from any estate, with the remainder divided through a formula between the spouse and any surviving children. When there is just one child, the remaining assets are split equally with the spouse.

If there is more than one child, then the spouse gets one-third of the amount over $200,000, and the remaining two-thirds are divided equally among all the children.

However, the SLRA does not take into account the individual circumstances of the deceased, Urback says.

“If you want to make decisions that are different from the breakdown under the law, then the only way to exercise any form of control is to make a will,” he adds.

One of a testator's most important decisions is their choice of executor, says Urback.

“This is the person tasked with carrying out your wishes, and they will have some big decisions to make,” he says. “Some people like to name someone who was very close to them, while others prefer to pick someone who is savvy with money. Another option is to choose a lawyer or a trust company.

“A great deal of thought needs to go into making the right choice, which will depend on each individual’s personal circumstances,” Urback adds.

After that, he says testators should turn their focus to the details of who gets what.

“When you’re preparing a will, you have a lot of flexibility,” Urback explains. “Some like to make specific gifts to friends, family or charities, while others prefer to split the estate into shares and name the people entitled to each portion. Or, you can do some combination of the two.”

Although he recommends testators visit a lawyer to ensure their will reflects their wishes, Urback says it's possible for people to put together a less formal version, known as a “holographic will.” As long as they are entirely handwritten by the testator, these wills are exempt from the statutory requirement that a will be witnessed.

“If it’s typed out, it needs to be signed and witnessed by two people who do not benefit under the will,” he adds.

Date_Published
2019-01-25
Description

Matthew Urback Head Shot

Dying without a will may have unintended consequences on one’s family members, Toronto wills and estates lawyer Matthew Urback tells Law Times.

Urback, an associate with Shibley Righton LLP’s Toronto office, says that without a will, one’s estate is then divvied up by the courts based on governing legislation and the personal situation of the deceased. But that process, he says, may not be what the deceased person would have wanted.

Another problem with not having a will, says Urback, is that the person probably didn’t take advantage of any tax-saving opportunities, which will likely mean that there will be less left over for beneficiaries.

“People should be entitled to deal with their assets in death as they are in life — basically, however, they want. But if you don’t have a will, you’re not taking advantage of that right. That means someone else is going to make that decision for you,” he says.

If there’s a family member willing to represent the estate, Urback says that person will have to apply to the court for a “certificate of appointment of estate trustee without a will.” But if they never discussed estate planning with the person, they won’t be much help in posthumously determining wishes.

Law Times says an online poll by the Angus Reid Institute revealed that 51 per cent of Canadians don’t have a will.

“It found that those aged 55 and older are nearly four times more likely to have wills than those between the ages of 18 and 34 and twice as likely as those between the ages of 35 and 54,” according to the online legal publication.

Date_Published
2018-12-06
Description

Matthew Urback Head Shot

Accounting for digital assets is becoming a bigger part of estate planning as people do more and more online, Toronto litigator Matthew Urback tells Law Times.

“I haven’t seen it addressed all that much yet and I think it’s something that’s going to become a much bigger issue than it already is in the coming years just because of the prevalence of digital assets,” says Urback, a civil and commercial litigator with Shibley Righton LLP’s Toronto office.

The assets include email and social media accounts, says the online legal publication, noting that “many people fail to identify those parts of their lives in their estate and risk the loss of control over their online identity as well as accounts that could have some significant value.”

The largely paperless, online assets could also include valuable ones like cryptocurrency, and if the owner doesn’t specify where the assets are and how to access them, it’s like they don't exist, says Urback.

“It might be worth it to appoint an executor, an estate trustee that is exclusively in charge of all your digital assets and all of your electronic holdings,” he says.

“If you lose it, you lose it, that’s it. So, you’ve got to make sure you’re passing on that information ... so they can access it after you’re gone,” Urback says.

“Whoever you’re putting in charge of all of that, especially if you have a lot of Bitcoin, you’re giving them an immense amount of power.”

And he warns against putting access information in the will since it’s a public document. Instead, Urback suggests giving that information directly to the executor.

Date_Published
2018-11-14
Description

Matthew Urback Head Shot

While it’s important to ensure powers of attorney properly deal with a grantor’s wishes, fear of potential fraud can stymy the whole process, Toronto litigator Matthew Urback writes in the Financial Post.

“Financial institutions are right to be concerned about fraud, especially when a power of attorney is involved,” says Urback, an associate with Shibley Righton LLP’s Toronto office.

“That is because a power of attorney is a tremendously powerful document that gives another person the authority to act on one’s behalf. The grantee of the power of attorney gains the almost complete ability to manage the grantor’s financial affairs, and so banks need to be vigilant about ensuring that person is indeed authorized and fit to carry out such a responsibility in the interests of the individual,” he says in the article.

“Banks can refuse to accept powers of attorney for a number of reasons: the document may be too old, lack clarity, or fail to conform to a bank’s internal policies.”

Urback says he’s found a few cases where “it appears as though common sense has taken a backseat to unnecessary caution.”

“For example,” he says, “I was recently involved in a matter where a financial institution received a power of attorney under what they considered suspicious circumstances. To satisfy their own doubt, they asked that the individual who granted it get a capacity assessment.”

Although the person passed, the bank still rejected the document, says Urback, which can cause all kinds of problems and leave an individual’s affairs in limbo.

While prudence is important, he wonders if we’ve become “so risk-averse that common sense no longer applies?”

Urback says the key to preventing disputes is acting early and clearly.

“The first level of responsibility falls on the individual and the family,” he says. “Powers of attorney are more effective when prepared early, and when there is no question as to capacity. Waiting too long creates uncertainty.

“Lawyers should also encourage early drafting of powers of attorney. This way, if there is a problem identified by the bank, or by an advisor, there is time to fix it.”

Banks and others in the financial industry have a legitimate fear of getting sued, so Urback says it’s helpful for lawyers to talk to these professionals when drafting a power of attorney and discuss concerns in advance.

“The next level of responsibility falls on the professionals,” he says. “It’s time for common sense to make a comeback. Banks, financial advisors, and anyone acting on instructions from an attorney must be reasonable and flexible — to an extent.

“Consider the case of a contact of mine, who was acting as one of two joint powers of attorney for an individual, with the other power of attorney being located across the country. Certainly not ideal, but this was the reality. The first power of attorney could not conduct any business for the individual, because the bank would not accept anything without two signatures, both provided in person.”

With technological advances — and a little creative thinking, Urback says alternatives should be available.

“Banks and advisors should also be prepared to accept the representation of a lawyer, a doctor, or designated capacity assessor,” he says. “If a professional is willing to put their reputation on the line, should banks not accept their finding?”

Urback says a balance exists between protecting the public and “ensuring that real, legitimate powers of attorney are respected. All we have to do is find it.”

Date_Published
2018-11-07

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