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Tag: Estate Administration

ESTATE LITIGATION: Challenging a will with the court’s assistance

Other kinds of orders are necessary in estate matters in specified circumstances, Rules of Civil Procedure (Rules), r. 74.15, which can be obtained from the court. For instance, an order for assistance is obtained on a motion made without notice, supported by affidavit evidence, Rules, r. 74.15(2). With certain exceptions, an order for assistance is to be served by personal service or by some other method, as directed by the court. The court can also direct any person to be examined under oath to decide a motion for such an order, Rules, rr. 74.15(3) and (4). Generally, common types of orders for assistance include the following:Order to Accept or Refuse Appointment as Estate Trustee With a Will, r.74.15(1)(a) — Form 74.36When this order is passed, an estate trustee is compelled to apply for a Certificate of Appointment within a given time limit. Failure to do so results in he or she being deemed to have renounced the right to do so. It is a useful tool in situations where a person having a financial interest in an estate comes to know of a will, as also the fact that no steps have been taken by the named estate trustee to apply for a

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ESTATE LITIGATION: Challenging a will and strategies for all those concerned

Submission of Rights to the CourtAfter submitting his or her rights to the court, Rules of Civil Procedure (Rules), r. 75.07.1, a person can either:Request on a motion for directions respecting the conduct of the Application for a Certificate of Appointment; orFile a statement of submission of rights to the court in response to a statement of claim filed by the plaintiff in compliance with the order giving directions. Although he or she is not a party to the proceedings, the person is entitled to written notice of the time and place of the trial and a copy of the judgment disposing of the matter. Such a person is not entitled to costs, nor is he or she liable for any party’s costs, except when the costs are ordered to be paid from the estate. The major benefit of this process is that the matter cannot be settled without his or her involvement.Settlement Involving a Person who has Submitted Rights to the Court

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ESTATE LITIGATION: Challenging the validity of a Will after probate

Order for Return of Certificate (Probate already obtained)When a Certificate of Appointment of Estate Trustee (Certificate) has already been issued, the proceedings to challenge a will are not commenced by filing a notice of objection. In that event, the party wishing to challenge the validity of a will has to obtain an order directing the Certificate to be returned to the court, Rules of Civil Procedure (Rules), r. 75.05(1). The order can be obtained on a motion without notice by filing a draft order and an affidavit in support, specifying the interest of the party applying for the order, and the general grounds upon which the order is requested for. According to the order, the Estate Trustee is to return the original Certificate of Appointment to the court forthwith. After the order has been served on the Estate Trustee, the appointment has no further effect and no further action can be taken with respect to the administration of the estate until the issues respecting the validity of the will have been determined, or the court orders the Certificate to be released back to the estate trustee, Rules, r. 75.05(3).

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ESTATE LITIGATION: Challenging the validity of a Will prior to probate

When someone seeks to overturn the last will and testament of a deceased, the process is known as challenging a will. Usually, the common grounds for challenging the validity of a will are:The absence of testamentary capacity;The lack of approval or knowledge of the contents of the will;The indication of undue influence; orThe non-compliance with the requirements of due execution as stipulated in Part I of the Succession Law Reform Act (SLRA).As well, there could be less frequent challenges based upon allegations, such as forgery or fraud. Those propounding the will have to prove that the testator had the required testamentary capacity.  They have to establish, on the balance of probabilities, that the deceased possessed the requisite level of testamentary capacity when the will was executed. If undue influence is the issue, those alleging undue influence have to establish that allegation. Then, there is the doctrine of “suspicious circumstances”, which includes such matters as the age and medical condition of the testator, the opportunity of others to exercise a degree of influence over the testator, and the significance of changes made in

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ESTATE ADMINISTRATION: Advising the Surviving Spouse

The precise nature of the executor/trustee/personal representative’s obligation to advise the surviving spouse is not clear. If the estate trustee is responsible only to the estate and its beneficiaries, he or she should not be required to tell the surviving spouse of the potential rights he or she may have under the Family Law Act (“FLA”). However, if it is the duty of the personal representative to help the surviving spouse, then how far does that duty extend?Recently, the Superior Court of Justice decided in Webster v. Webster Estate, where the surviving spouse missed the six-month period, within which to file an election in favour of an equalization of Net Family Property (“NFP”). It was argued, in the application to extend the time to elect, that the personal representatives of the deceased husband’s estate had a duty to advise the surviving spouse of her entitlement to make an equalization claim. Although Robertson, J. rejected this argument, the facts were somewhat unusual:

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ESTATES & NFP: Income Tax and Family Law considerations at death

Income Taxes at DeathClaims arising on the death of a spouse are not many, nor is there much jurisprudence dealing therewith. But claims arising on marriage breakdown are not uncommon and a frequently litigated issue is whether, for the purpose of computing a spouse’s Net Family Property (NFP), property owned by him or her should be valued at its after tax amount in the spouse’s hands. For a time after the enactment of the Family Law Act (FLA), cases were all over the place on this point, some suggesting that income tax costs of disposition should be taken into account (with or without a discount for the likelihood of the disposition taking place relatively soon), while others suggested that in the absence of a clear indication that property would be sold by the owner spouse, no tax costs should be taken into account on the grounds that such a calculation was too speculative.When the valuation date is one day before the death of the deceased spouse, the argument that income tax costs should be taken into account is more compelling than in the case of marriage breakdown. As the Income Tax Act (ITA) deems that the deceased spouse immediately before death:

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ESTATES & EQUALIZATION: How the Courts can enforce your Family Law rights

Court OrdersThe court has extensive powers to enforce the equalization order, Family Law Act (FLA) section 9. It can order:Money to be paid;Security to be given;Payment to be deferred for, or made in instalments over a period of up to 10 years;Transfer of property in specie; orPartition and sale of property. If deferred or instalment payments are ordered, subsequent variation orders are permitted provided the court is satisfied that there has been a material change in the circumstances of the paying spouse. However, the amount of the equalization payment previously determined cannot be varied, FLA, s. 9(3).

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ESTATES & EXECUTORS: How the Family Law Act impacts the administration of an estate

Restrictions on Distribution of EstateAfter the death of a spouse, no distributions can be made out of the estate during the six month period immediately following the deceased spouse’s death without:1) Written consent of the surviving spouse; or2) Authorization of the court, the Family Law Act (“FLA”), section 6(1).If the personal representative receives notice that an application, for extension, has been made under Part I of the FLA, no distributions can be made out of the estate without:1) Written consent of the applicant; or2) Authorization of the court, FLA, section 6(15).

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ESTATES & INTESTACY: Spousal statutory rights when there is no Will

Continuing the discussion of the effects of a Family Law election on various aspects of estate administration; its effect on intestacy is now reviewed.Effect on IntestacyIn an intestacy (where a spouse dies without a will), either partial or total, the election in favour of an equalization claim (FLA, subsection 6(9)) will result in the surviving spouse’s forfeiture of his or her entitlement under Part II of the Succession Law Reform Act (“SLRA”). In a partial intestacy, even when the will states that the benefits under the will are to be in addition to the surviving spouse’s equalization claim, that statement would not prevent the latter’s forfeiture of entitlement under Part II of the SLRA for the other part of the estate that is under intestacy.In intestacy, the SLRA has no control over a surviving spouse’s entitlement to property situated outside Ontario. Succession to immovable property as dictated by conflict of laws rules is under the law of the situs (position or site).  So, unless the laws of the jurisdiction in which immovable property is situate require that Ontario law be applied (i.e. the SLRA), the surviving spouse who elects in favour of an equalization claim can get the assets located outside Ontario. This is a glaringly unfair, and probably an unintended result, caused because the Net Family Property (“NFP”) of the deceased spouse is calculated on the basis of his or her worldwide assets.

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ESTATES & EQUALIZATION: Spouses electing their Family Law rights and the consequences thereof

It cannot be stressed enough how important it is for the surviving spouse to establish his or her entitlement to insurance proceeds and to survivorship benefits under pension and similar plans arising on the death of the deceased spouse.With this in view, the surviving spouse, who makes his or her decision on the basis of a will in respect of which no certificate of appointment of estate trustee has been issued, should also be cautioned. In the end, if the will put forward is found to be invalid; the surviving spouse would find that the election should have been made the other way. A wise course of action would be to defer the filing of the election until after the certificate of appointment of estate trustee with a will has been issued. Should there be difficulty in locating a will or there be litigation over the validity of a will, it would be appropriate to apply for an extension of time for filing the election beyond the six-month period following the deceased spouse’s death, (under subsection 2(8) of the Family Law Act (“FLA”)).

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