Transcript CHALLENGING A WILL AND AVOIDING THE CHALLENGE!

CHALLENGING A WILL AND
AVOIDING THE CHALLENGE!
HALIFAX ESTATE PLANNING COUNCIL
NOVEMBER 28, 2011
PRESENTED BY:
Helen Foote
Heritage House Law Office
&
Erin O’Brien Edmonds, Q.C. TEP
Burchell MacDougall
How many ways can a will be attacked?
Based on the Form of the Will
1. Construction and Interpretation
2. Execution – competency, formalities of
signing the Will
3. Content different than client’s instructions
Based on the Substance or Content of the Will
1. Dependent’s Claims – Testator’s Family
Maintenance Act issues
2. Spousal Claims – Matrimonial Property Act
Issues
3. Competency, Undue Influence (Suspicious
Circumstance)
4. Constructive Trusts
5. Changes to the Wills Act
1. Dependent’s Claims
TESTATORS FAMILY MAINTENANCE ACT, R.S.N.S. 1989, c.465
• Usually children make the application
• If writing a spouse or child out of a Will, there may now be a
moral obligation to provide for them
• The court can interfere with a Will and make provision
• Section 3 (1)
• “dependent” is defined as widow(er) or child of the testator
(covers illegitimate children)
• Factors for the court to consider:
Section 5 (1)
Section 14 (1)
2.
Spousal Claims – Matrimonial
Property Act issues
• Legislative Framework
• Matrimonial Property Act, R.S.N.S. 1989 c. 275
– Section 12
– Section 4
– Sagar v. Bradley Estate (1984), 62 N.S.R. (2d) 120
– Section 12 (2) – Limitation Period
– Section 12 (4) – In addition to the rights that the
surviving spouse has as a result of the death of
the other spouse
• Levy v. Levy (1982), 50 N.S.R. (2d) 14
• Factors for unequal division:
– Section 13
• Executor – enter into an agreement with a
surviving spouse
• Marriage contract or separation agreement,
unconscionable, unduly harsh on one party, or
fraudulent
• Domestic Partners
– What is a domestic partner
• Vital Statistics Act, s. 52(a)
– Domestic partner declaration
• Vital Statistics Act, s. 53 (1)
ESTATE PLANNING ADVICE TO MEET
OBLIGATIONS AND AVOID CHALLENGES
• Two common situations:
• First marriage with children
• Second marriage with children from other
relationships
PLANNING INSIDE THE ESTATE
1. Mutual Wills
2. Sole Registration of some assets to pass by
Will to children
3. Marriage contract
4. Spouse trust with income to spouse and
reminder to children
5. Election to spouse
Matrimonial Property Laws:
• I intend that the provisions made for my spouse in my Will are in lieu of
the rights which my spouse may have, and any property to which my
spouse is entitled, under the matrimonial property laws, whether
statutory or otherwise, of any applicable jurisdiction. This included the
Matrimonial Property Act of Nova Scotia as amended from time to time
and any successor legislation. It is therefore a condition precedent of all
provisions made for my spouse in this Will or a Codicil that my spouse
agrees to accept these provisions in lieu of those rights or property. My
spouse’s agreement shall be evidenced by a written statement to this
effect to be delivered to my Trustee within six (6) months after probate of
my estate and not after that. If my spouse does not so agree then these
provisions for my spouse shall be considered not to have been made.
• For greater certainty, my provision of a life interest for my spouse shall be
considered to have ended in the same manner as if my spouse had not
survived me.
Cont.
6. Memorandum or Affidavit
7. Sever a Joint Tenancy
PLANNING OUTSIDE THE ESTATE
Beneficiary Designations:
1. Life Insurance
2. RRSP
3. Tax Free Savings Account
Trusts
1. Alter Ego or Joint Partner Trust
2. Discretionary Family Trust
Joint Ownership
1. Joint ownership with right of survivorship
2. Server joint ownership
Income
1. Annuity for dependant
Other
1. Gifting during life
COMPETENCY, UNDUE INFLUENCE
(SUSPICIOUS CIRCUMSTANCE)
• In solemn form – issues of advanced age,
medical conditions affecting ability to make a
Will
• Is someone else directing the testator to make
the Will and is the main beneficiary?
• Is the Will dramatically different from previous
Wills?
• Nieuwland v. Yorke Estate, 2011 NSSC 19
• Issues to discuss with clients:
• Lawyer to assess capacity at the outset:
• Sound and disposing mind:
– understand nature and effect of will
– recollect nature and extent of his or her property
– understand the extend of what he or she is giving
under the will
– understand the nature of the claims that may be
made by persons he or she is excluding under the will
(if applicable)
• Where claims are more likely such as:
–
–
–
–
gift to person in fiduciary relationship
where will deviates substantially from previous wills
division unequal amongst children
gift made to person who has no close relationship with
testator
– gift made to person who has close relationship with
testator but which is not known or recognized by family
– gift made to person not recognized by testator`s family as
deserving as a gift
– where gift made to person in a position of influence such
as care-giver
• Hall v Bennett Estate - professional negligence
when:
•
failure to obtain mental status examination
•
failure to interview client in sufficient depth
•
failure to ascertain existence of suspicious
circumstances or failure to react to same
•
failure to exclude the presence of an
interested party
•
preparing will for relative
•
failure to take steps to test for capacity
• Tips
• always meet client alone without any beneficiary
present
• ask client if he or she feels under any particular
pressure by anyone regarding his or her will
• ask client if anyone has been suggesting or telling
him or her what to put in her will
• whether client feels any lack of control over his or
her own decision and is deciding out of fear or
disappointment of beneficiary
CONSTRUCTIVE TRUSTS
• Beaton v. MacNeil , 2011 NSSC 302
QUESTIONS TO ASK TESTATOR TO
REDUCE RISK OF CLAIMS:
1. Have you given anybody a large gift or made
a large transfer in the past?
2. Do you intend to make such a gift or
transfer?
3. Do you owe anyone money? Does anyone
claim that you owe them money which you
deny owning them?
4. Do you support any children with regular
gifts?
5. Have you made any promises to pay anybody for any
service provided or any other reason out of your
estate?
6. Have you told anyone or led them to believe they
might inherit from your estate that are not in the
Will?
7. Is anyone providing services to you, for example caregiving, maintaining your home, paying your bills for
you or anything else for which they might want
payment after your death?
8. Do you own any joint property whether real
estate or other property, with anyone, and if so
what is your view about who beneficially owns
that property?
9. Have you written letters or made comments to
anyone about who will inherit your estate? Do
you intend to tell anyone about your will once it
is signed?
10.Is there anyone who is not going to be a
beneficiary of your estate that expects to be?
HOLOGRAPH WILLS AND WRITINGS
• Since August 2008 holograph wills have become
value in Nova Scotia
• Section 8A of the Wills Act states:
Writing not in compliance with formal requirements
s. 8A: Where a court of competent jurisdiction is
satisfied that a writing embodies
(a) The testamentary intentions of the deceased; or
(b) The intention of the deceased to revoke, alter or
revive a will of the deceased or the testamentary
intentions of the deceased embodied in a document
other than a Will
• The court may, notwithstanding that the
writing was not executed in compliance with
the formal requirements imposed by this Act,
order that the writing is valid and fully
effective as if it had been executed in
compliance with the formal requirements
imposed by this Act 2006, c. 49, s. 2 (emphasis
added)
• Komonen v. Fong, 2011 NSSC 315
• Fennell v. Crookshank Estate, 2010 NSCC 442
• Robitaille v Robitaille, [2011] N.S.J. 271
Comments on holograph wills and
writings
• Advise client that any writings they make after they sign
their will could be considered as a writing potentially
altering or revoking the will signed at the lawyer’s office
• Last minute wills
• List of personal items often written by clients
• Query - proper format? Signed or not?
• Lay persons do no have the knowledge and skill to prepare
a proper will and litigation is more likely;
• Intention is key - evidence to review
• Recommend against holograph wills and writings to all your
clients unless you are an estate litigator :)
• If as a lawyer you have to probate a holograph will or
writing, one to probate, try to obtain agreement from
beneficiaries as to meaning and understanding. Minor
children cannot consent to interpretation
• Seek court interpretation when in doubt
General tips on how to reduce the likelihood of litigation
when drafting Wills and taking instructions:
1. Have a good intake process where all relevant
information about the client’s finances and family is
available. Send a questionnaire to client to complete
before the first meeting so the client has time to think
and be accurate with their answers.
2. Ask lots of questions about the relationships and the
current method of holding ownership. The questions
should not be leading questions that can be answered
yes or no. Let the client explain.
3. Review marriage contracts prior to preparing
the Will
4. Ensure the client is competent and
understands the nature of his or her assets
and intended beneficiaries
5. Ensure no undue influence or coercion or
suspicious circumstances
6. Educate client about consequences of leaving
spouse or children out of Will
7.
8.
9.
Confirm the client’s intention regarding
jointly owned assets.
Have a separate document confirming the
binding nature of mutual Wills.
Use the matrimonial laws clause for 2nd
marriages or blended families.
10.Provide copies of Wills to Insurance Company
when beneficiary is changed pursuant to Will
11.Retained signed copies (PDF or paper) in your
file
12. Keep good notes and document your file
13.Advise the client estate planning never ends
and not to change the beneficiary on an asset
without checking with the lawyer first