thatwillsblog

Very often when I am helping clients prepare their estate planning documents, the discussion turns to end-of-life planning as well. I am always surprised by the number of people who believe that if they appoint a representative for health care, they can make an advance request for medical assistance in dying (MAID). The fact is, only those people who are mentally competent at the time, and whose death is reasonably foreseeable are eligible. If you end up with dementia, you will not be eligible, even though most people I talk to think that is the most important aspect of MAID.

In September 2019 a Quebec court struck down a provision in the medical assistance in dying law that limits who qualifies for that assistance. The judge said the limitation, requiring the person’s death to be reasonably foreseeable, was unconstitutional. The applicants were two people with painful degenerative diseases, which though incurable, would not kill them imminently. The judge gave the government 6 months to fix the law.

As a result of that Quebec ruling, the federal government is currently doing a survey of what Canadians want in the MAID laws. The survey is available at https://justice.survey-sondage.ca/f/s.aspx?s=6E6210A5-E100-4201-A55D-CFB52ADA1C0C They have given Canadians until January 27th, 2020 to respond.

Please let the government know your thoughts on this very important matter.

Did you know you can have more than one will in British Columbia?  This is an estate planning tool that has been used for some time in Ontario, but it is not yet so well known here.  I have been drafting these for my clients for a number of years, and now the BC Supreme Court has confirmed that if done properly, they are a valid way of facilitating the transfer of assets from one generation to the next.  The case is Re: The Estate of Norman Frank Berkner, Deceased

The case is quite straight forward.  Mr. Berkner was the owner of a valuable egg farm, which he had incorporated as Berkner Egg Farms Ltd.  His wife had predeceased, and his only heir was his daughter, Shelley.

As part of his estate plan, Mr. Berkner had made two wills.  One will (the “Primary Will”) was designed to include those of his assets which would require probate to be transferred, while the other will was designed to capture his other assets, including the shares of the company.  Upon Mr. Berkner’s death, Shelley applied for probate of the Primary Will and renounced her appointment as executor under the second will.  The result was that the second will had a different executor (an accountant) which, as you will see, is important for the two-will method to work.

The court, when presented with the Primary Will for probate, asked for submissions as to why Shelley should be granted probate of that will without also needing to probate the other will, or including the shares.  The court posed the following three questions:

1. Is a will maker permitted to make more than one will?
2. Is a personal representative (ie, the executor) required to probate a will?
3. If there is nothing to prevent a person from having more than one will, and nothing requiring an executor to probate a will, can the Primary Will be probated?

To answer the first question, the court pointed out that it is not uncommon for people with assets in multiple jurisdictions to have multiple wills, and pointed to two Ontario cases, each of which involved a person having two Ontario wills, only one of which was probated.  The fact that this is done to avoid probate on the “non-probate” assets was recognized but was not commented on.  The judge also mentioned a case going back to 1876 in England (yes, legal precedent goes back a long way!) and confirmed that it is permissible for a person to have more than one Will.

The answer to the second question confirms that there is no requirement that an executor must get probate of a will.  In fact, the main reason an executor needs to get probate is to confirm the validity of a will and to confirm the executor’s authority to third parties (such as financial institutions).  That means an executor of a “Secondary Will,” as it is referred to by this judge, does not need to apply for probate.

I mentioned above that it is important to have a different executor for each of the two wills.  This is because the executor of the Primary Will must disclose to the probate court all assets that come to her because of the death of the deceased.  If she is also the executor of the “Secondary Will” then she has to include the private company shares when she probates the Primary Will, which of course defeats the purpose of the Secondary Will.

Because the court confirmed that a person may have more than one will, and that a personal representative does not have to probate a will, that meant Shelley could get probate of the Primary Will without having to include the assets that fell to the Secondary Will.

The court looked at the Wills Estates and Succession Act (“WESA”) which specifically contemplates that only part of an estate may come to a personal representative.  That implies that other parts of the estate may go to a different personal representative, who may not have to get probate for that part.

The Berkner case therefore confirms that multiple wills can work if done properly.  Of course there are other considerations, such as the fact that if a will is not probated, the Wills Variation provisions of the WESA is never fully closed off.

If you decide to use multiple wills as part of your planning, you must make sure the wills are drafted carefully, appointing different executors for each will, with clear definitions as to what assets are to be dealt with under each of them.  A mistake that results in an asset that ultimately needs probate going into the “non-probate” will can mean that probate will be needed for all of your assets.

Finally, you need to keep track of past planning, because a revocation of “all previous wills” in a subsequent Primary Will can also result in the non-probate will being inadvertently revoked.

That said, this is a marvelous planning tool for business owners and other who have substantial wealth in assets that do not require probate to be transferred.  Add it to the bundle of tools such as tax-planned trusts, joint ownerships and beneficiary designations, and the amount of probate payable to the government when you die can be significantly reduced.

This topic just never gets old….what happens if a person dies without a will?  Many people think they have it all sorted out, but consider this….

I had a call today from an old colleague.  He has a client whose husband died in very unfortunate circumstances.  As a young couple, they didn’t have much, and what they did have was all in joint names.  So no will needed, right?  Well, almost.  One of the few things of value that the husband had was a significant tax refund from CRA.  Now, as anyone who has tried to deal with CRA on someone else’s behalf will know, they want consent from the taxpayer himself before they will deal with anyone else.  You can see the problem, right?  the deceased husband can’t consent.  He had no will, so his poor (literally) widow is going to have to apply for administration of his estate.  Because there is a very young child, she will have to notify the Public Guardian and Trustee (the “PGT”) (and pay a fee for the privilege).  She will also have to pay probate fees.  Out of what’s left, she will have to pay part of the money to the PGT to hold for her child until he’s 19.  Not good.

The ability to deal with CRA on your behalf is just one reason to have a will.   Applying for administration is a lot tougher than applying for probate of a will.  Why?  For one thing, the court needs to know that the person applying for administration is an appropriate person to do so.  If you name an executor in your will, the court can be confident that you wanted that person to act as your executor.  If you don’t bother to appoint anyone, then there is a class of persons who can apply, and everyone in that class has to consent to the appointment of the person brave enough to step forward.  There can be clashes among family members who have an equal right to apply, so you may be setting the family up for a fight.   And what if no one want the job?   The Public Guardian (or public administrator in some provinces) may step in, depending on who the heirs are.

Speaking of heirs, if you don’t leave a will, the law says who gets your estate, and neither you nor your heirs have any choice in the matter.  In BC, if you have children and a spouse, the estate gets divided among them in fixed proportions.  What those proportions are will depend on how many children you have, and whether those children are also the children of your spouse.  Step children will be left out in the cold.  Other provinces have similar provisions….why let the government make those decisions for you?

It gets worse…you might think that your spouse gets to look after the children’s shares, but you would be wrong.  If the children are of full legal age (ie, have reached the age of majority) they get their shares outright.  Party time!!!   If they are minors, the PGT will take the money, invest it, and pay it to the kids when they reach the age of majority.  While the money is invested, the PGT will charge a hefty fee and if the spouse needs money to raise the kids, she or he has to go cap in hand to ask for funds.  Why would you do that to your spouse and kids?

Of course you can avoid the above by having everything in joint names with your spouse, in which case the right of survivorship will apply.  But consider what would happen if your spouse dies before you?  or if both of you are killed in a car crash together, and neither of you has a will.  Someone would still have to apply for administration when the last of you and your spouse dies.

The most common situation where I see a real need for a will is with second marriages, when there are children from earlier relationships who are intended to be the ultimate beneficiaries.

Consider the case of Bruce and his 2nd wife Hilary.  Bruce made a lot of money in his business, invested well, and he and his first wife Ingrid lived a good life style.  Their children, Dan and Liz, went to private school and had the best of everything.  Then Ingrid died.

Eventually, Bruce met Hilary and they have since married.  The kids get on well with her, but she isn’t that much older than they are.  Bruce wants everyone to be happy and provided for and he spends accordingly.  He worries about what will happen when he dies, but not enough to actually make a will.  He figures having his business partners look after his companies will take of those interests, and he has put his house and real estate investments, as well as most of his banking and investment accounts, into joint names with Hilary.  He wants her to have everything when he dies and then he wants his kids to get the estate when Hilary dies. Will that happen?  Maybe, but maybe not.

If Bruce dies first, which is likely given he is 20 years older than Hilary, all of his assets that he has put in joint names will become Hilary’s sole property.  Those assets will only go to Dan and Liz if Hilary feels like making a will leaving the assets to them.

What if she doesn’t make a will?  everything then goes to her heirs.  She has no kids, so her brother and sister will get everything if they are still alive (her parents would be in line before them but they are both dead).

What if Hilary remarries?  if she still has no will, that new husband will inherit her estate, including all of Bruce’s assets.  Even if she makes a will there is no guarantee she would leave anything to Dan or Liz, and they would have no claim against her estate.

Bruce, like may other Canadians, is hiding his head in the sand.  He should be taking charge by getting an estate plan, including a will, in place.  He would be doing his family a huge favour.

Some time ago I wrote about the issue of what happens to a person’s digital property when he or she dies.   https://thatwillsblog.com/2011/12/29/preparing-for-a-cloudy-day-death-passwords-and-other-assets/

So on the news today, there is a story about that exact problem:  http://www.cbc.ca/news/business/apple-wants-court-order-to-give-access-to-appleid-1.3405652

From the story it actually sounds like Apple isn’t really on top of this either, and the law in Canada is about a century behind.  Until everyone catches up, what to do?

The simplest solution (though by no means the best) is to give someone you trust access to all of your passwords.  There are so many problems with this idea that I don’t even know where to begin.  Hands up, everyone who has the same passwords today as you did, say, a year ago?  (you with your hand up, you need to fix that pronto).

Not only that, but for things like online banking, you can actually lose your protection from fraud if the bank finds out you have shared your password.

One solution that might work is to have a provision in your will giving your executor the right to access your digital accounts when you die.  In that case, if Apple (or any of the gate-keepers at other service providers) demands a court order, your executor can provide a copy of the grant of letters probate, which is an order of the court confirming your executor’s appointment.  That would put digital assets in line with all other kinds of assets for which probate is required.

The unfortunate thing is that you may have planned your estate and affairs so that your executors doesn’t need to probate to transfer your assets.  It sounds like that was the case with the lady in the above news story.

Still, it’s better to have a plan (by adding that clause to your will) than to ignore the problem all together.

And in other news:  http://www.cbc.ca/news/technology/worst-passwords-2015-1.3410002

Can my last e-mail be my will?
That was a question being asked (mainly by lawyers, admittedly) after the Wills Estates and Succession Act (the “WESA”) came into force last March 30th, 2014. Lawyers ask some pretty wacky questions, but this one wasn’t so far-fetched. It stemmed from a new provision in the WESA, Section 58.

Section 58 says that a court may make an order if it determines that a record, document or writing or marking on a will or document represents the testamentary intentions of a deceased person.

The definition of “record” includes data that is recorded or stored electronically, can be read by a person, and is capable of reproduction in a visible form.

So, can my last e-mail be my will? S. 58 seems to say it could.

The question recently came before the Supreme Court in BC. In that case, Estate of Sharone Young, a lady who died in 2014 had made a will, but had also written a number of other documents stating what she wanted done with some of her things after her death. None of these documents were signed the way a will needs to be signed. The executor decided she had better ask the court whether these writings were actually a “will”, and therefore represented the deceased’s testamentary intentions.

Here is what the judge said:

“… Two principal issues for consideration emerge from the … authorities. … is the document authentic? The second, and core, issue is whether the non-compliant document represents the deceased’s testamentary intentions.
In George [a Manitoba case] the court confirmed that testamentary intention means much more than the expression of how a person would like his or her property to be disposed of after death. The key question is whether the document records a deliberate or fixed and final expression of intention as to the disposal of the deceased’s property on death.
…….. While imperfect or even non-compliance with formal testamentary requirements may be overcome by application of a sufficiently broad curative provision, the further a document departs from the formal requirements the harder it may be for the court to find it embodies the deceased’s testamentary intention.”

In other words, the more the document looks like an email and the less it looks like a formal will, the less likely a court would consider it the deceased’s “fixed and final” testamentary intentions.

This is good news for those of us who might have been wondering what documents need to be given to the court when applying for probate, and whether all of grandma’s musings and notes that she wrote all over the copy of her last will might actually be her last will. And that email she wrote to you the evening before she died? The one where she says your brother was always her favourite and he should get everything? You can safely ignore it.