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 • Construction and Interpretation • Execution – competency, formalities of signing the Will • Content different than client’s instructions

Based on the Substance or Content of the Will • Dependent’s Claims – Testator’s Family Maintenance Act issues • Spousal Claims – Matrimonial Property Act Issues • Competency, Undue Influence (Suspicious Circumstance) • Constructive Trusts • 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 • Mutual Wills • Sole Registration of some assets to pass by Will to children • Marriage contract • Spouse trust with income to spouse and reminder to children • 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. • Memorandum or Affidavit 7. Sever a Joint Tenancy

PLANNING OUTSIDE THE ESTATE Beneficiary Designations: • Life Insurance • RRSP • Tax Free Savings Account Trusts • Alter Ego or Joint Partner Trust • Discretionary Family Trust

Joint Ownership • Joint ownership with right of survivorship • Server joint ownership Income • Annuity for dependant Other • 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: • Have you given anybody a large gift or made a large transfer in the past? • Do you intend to make such a gift or transfer? • Do you owe anyone money? Does anyone claim that you owe them money which you deny owning them? • Do you support any children with regular gifts?

Have you made any promises to pay anybody for any service provided or any other reason out of your estate? • Have you told anyone or led them to believe they might inherit from your estate that are not in the Will? • Is anyone providing services to you, for example care-giving, maintaining your home, paying your bills for you or anything else for which they might want payment after your death?

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? • 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? • 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 • The testamentary intentions of the deceased; or • 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: • 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. • 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.

Review marriage contracts prior to preparing the Will • Ensure the client is competent and understands the nature of his or her assets and intended beneficiaries • Ensure no undue influence or coercion or suspicious circumstances • Educate client about consequences of leaving spouse or children out of Will

7. Confirm the client’s intention regarding jointly owned assets. 8. Have a separate document confirming the binding nature of mutual Wills. 9. Use the matrimonial laws clause for 2nd marriages or blended families.

Provide copies of Wills to Insurance Company when beneficiary is changed pursuant to Will • Retained signed copies (PDF or paper) in your file • Keep good notes and document your file • Advise the client estate planning never ends and not to change the beneficiary on an asset without checking with the lawyer first

CHALLENGING A WILL AND AVOIDING THE CHALLENGE!