Famous Failures Who Made It

Famous Failures Who Made It

 

If you have never failed, you have never tried anything new! Albert Einstein

Michael JordonAlbert was not able to speak until he was almost 4 years old and his teacher said he would never amount to much.

Michael Jordan-after being cut from his high school basketball team, Michael went home, locked himself in his room and cried.

Walt Disney-fired from a newspaper for lacking imagination and having no original ideas.

Steve Jobs-at 30 years old he was left devastated and depressed after being unceremoniously removed from the Apple company that he started.

Oprah Winfrey-was demoted from her job as a news anchor because she wasn’t fit for television the Beatles-rejected by Decca recording studios who said we don’t like their sound they have no future in show business.

Americans Donate Billions to Charity

Warren Buffet 2Americans are generally speaking generous towards charities, donating around 7 plus billion dollars per year.

Here are a few of the top   donors:

1. Warren Buffett

Total: $3.084 billion
2. Mark Zuckerberg and Priscilla Chan

Total: $499 million
3. John and Laura Arnold

Total: $423 million
4. Paul Allen

Total: $309 million
5. Sergey Brin and Anne Wojcicki

Total: $223 million
Recipients: Brin Wojcicki Foundation, Michael J. Fox Foundation for Parkinson’s Research

6. Mortimer Zuckerman

Total: $200 million
Recipient: Columbia University

8. Carl Icahn

Total: $150 million
Recipient: Mount Sinai School of Medicine

Six Famous Estate Fights

 

Anna Nicole 2Famous Estate Fights- Mistakes & Lessons

 

Brooke Astor

Mistake: Naming wrong person as agent under power of attorney.

Story: In October 2009 socialite Brooke Astor’s son Anthony Marshall was convicted of fraud and grand larceny relating to his handling of his late mother’s estate. The 14 counts which a New York jury found Marshall guilty of, included misusing his power of attorney over her financial affairs by giving himself a retroactive $1 million raise for managing her finances. Marshall denied wrongdoing and remains free while appealing his conviction.

 

Estate Fights Lesson: Pick your agent with care, and require a backup agent to sign off, too, on major decisions.

 

Princess Di’s Trinkets

 

Mistake: Relying on a “letter of wishes” to give away belongings.

 

Story: At her death in 1997, Princess Diana left a detailed will, naming her sister and mother as executors. She also wrote a separate “letter of wishes” asking her executors, at their discretion, to divide her belongings among her sons and her 17 godchildren. But instead of getting stuff worth an estimated 100,000 pounds, each godchild got only a trinket.

 

Estate Fights Lesson: Don’t rely on executors’ sense of noblesse oblige; put specific bequests in your will or trust or in a signed, dated list. If you’re older, give away cherished belongings before you die.

 

Marjorie Merriweather Post’s Daughter

 

Mistake: Having conflicting wills in different places.

 

Story: Eleanor Close Barzin, a daughter of Marjorie Merriweather Post, who during her life often was called America’s richest woman (her father was C.W. Post of cereal fame), died in 2006 at age 96, worth tens of millions. With assets on two continents, she had an amended French will, a U.S. trust and a U.S. will, not necessarily a problem, except for the fact that the documents weren’t coordinated to account for how the different jurisdictions interact with one another. Her estate is still tied up in litigation.

 

Estate Fights Lesson: If you have assets in more than one jurisdiction (that could be New York and Vermont), make sure you have competent advisors who can deal with the complexities and contradictions.

 

Anna Nicole Smith

 

Mistake: Marrying out of your league.

 

Story: Oil baron J. Howard Marshall was 89 when he married formerPlayboy playmate Anna Nicole Smith, age 26. When Marshall died just over a year later in 1995, she claimed he had promised her half of his estate, but she was left out of the will. Most of Marshall’s fortune went to his only son, E. Pierce Marshall. Then, Marshall and Smith died within months of each other, Smith leaving behind an infant daughter. The case went up to the U.S. Supreme Court twice, with the Court ruling this June that the Texas probate court was the proper venue for the case. That court’s decision, which upheld Marshall’s will, is on appeal.

 

Estate Fights Lesson: Sign a prenuptial agreement.

 

Pritzker v. Pritzker

 

Mistake: Counting on dad.

 

Story: Brother and sister Matthew and Liesel Pritzker sued their father, Robert, and other family members, accusing them of looting their trust fund (dad was trustee) after the death of their grandfather, family patriarch Jay Pritzker, who founded the Hyatt hotel chain. The lawsuit was settled in 2005, with the two reportedly getting control of fortunes of $450 million each.

 

Estate Fights Lesson: If your estate plan includes trusts meant to last multiple generations, a corporate trustee (typically a bank) can be a better choice (more expensive, but more impartial) than a family member.

 

The Koch Brothers

 

Mistake: Exiting the family business too early.

 

Story: Four sons of Fred Koch, founder of oil conglomerate Koch Industries, inherited the company after their father’s death in 1967. Sons Charles and David bought out William and Frederick for $1.3 billion in 1983. William and Frederick (pictured) later sued for a bigger amount. The long-running feud was finally settled in 2001. Meanwhile, Charles and David have climbed into the ranks of the 10 richest Americans, worth $21.5 billion each, while William is worth $3.4 billion; Frederick isn’t even among the 400 richest Americans.

 

Estate Fights Lesson: When your estate includes a family business, extra precautions are needed to ensure that all heirs will be treated equally.

Blended Family Wills and Estates Issues

Blended familyBlended family situations with respect to estate disputes are common as the families have not in fact often “blended”.

As such members of the family often resort to the provisions of the BC wills variation act, now after April 1, 2014, incorporated into the provisions of WESA.

1. Introduction

Despite nine decades of judicial interpretation, there still remain many questions and concerns about the Wills Variation Act as it applies to today’s society. There are many conflicting decisions that are hard to reconcile. Critics of the Act argue that it has eroded testamentary freedom far too much, and allege that it has gone much further than providing the “maintenance” that the Act was mandated to provide.

2. The Concept of Testamentary Freedom

The British common law gave serious effect to the principle that:”everyone is left free to choose the person upon whom he will bestow his property after death entirely unfettered in the selection he may think proper to make. He may disinherit, either wholly, or partially, his children and leave his property to strangers to gratify his spite, or to charities to gratify his pride, and we must give effect to his will, however much we condemn the course he has pursued. In this respect the law of England differs from that of other countries. It is thought better to risk the chance of an abuse of power arising form such liberty than to deprive men of the right to make such a selection as their knowledge of the characters, of the past history, and the future of their children or other relatives may demand.”

Boughton v Knight (1873) 3 P.& D. 64.

It was felt that a testator should be better able to judge his testamentary obligations than the state, through a legislated scheme. Contrary to this, most of continental Europe opted for statutory schemes.

However, it is against the backdrop of “testamentary autonomy” that abuses of this concept left a widow and her children at the mercy of the community for their support.

Wills Variation actions often are a judicial conflict between the provisions of the Wills Variation Act and the principle of testamentary autonomy.

3. Historical Background

New Zealand was the first common law jurisdiction to seriously question and change the concept of testamentary freedom on the basis that the family had a right to be protected. In October of 1900 it passed the Testator’s Family Maintenance Act.

British Columbia passed a statute with the same name and almost identical provisions in 1920.

Historically, the statue was passed at a time of active social reform following the First World War, a world wide flu epidemic, the rise of the Bolsheviks in Russia, and a strong desire for greater social stability for a rising working class. Great lobbying for the legislation was conducted by the various women’s organizations of the day.

The initial” Dependants Relief” legislation that permitted the courts to interfere with testamentary freedom, has undergone, and continues to undergo, substantial changes. The rationale for these judicial changes has been to allow the law to adjust to changing economic considerations and contemporary social norms.

4. Persons Entitled to Apply For Relief In British Columbia

Only married spouses, common law spouses, natural born children including illegitimate children, and adopted children have the status to apply.

The remedy is discretionary.

Section 2 of the Act states:

” Despite any law or statute to the contrary, if a testator dies leaving a will that does not, in the court’s opinion, make adequate provision for the proper maintenance and support of the testator’s wife, husband or children, the court may, in its discretion, in an action by or on behalf of the wife, husband or children, order that the provision that it thinks adequate, just and equitable in the circumstances be made out of the testator’s estate for the wife, husband or children.”

It is important to note that the definition of ‘Spouse’ includes a person ,married to another, as well as a person who is living and cohabiting with another person in a marriage like relationship, including a marriage_like relationship between persons of the same gender, and who has lived and cohabited in that relationship for a period of at least two years.

‘Children’ includes adopted children, but not step children. However, a child who has been adopted out will likely lose his or her right to claim against his or her natural parents.

To qualify as a common law spouse, the claimant and the testator must have been living and cohabiting in a marriage like relationship at the date of the testator’s death. Einfled v. Bellrichard 2001 BCSC 92.

In determining whether a relationship is “marriage _like” or not, the court should first consider subjectively, the question

“if each partner had been asked at any time during the relevant period of more than two years , whether , if their partner were to be suddenly disabled for life, would they consider themselves committed to life_long financial and moral support of that partner, and the answer to both of them would have been yes, then they are living together as husband and wife”.

Gostlin v. Kergin (1986) 3 B.C.L.R. (2d) 264 (C.A.)

If the answer to the question is not apparent, then the court should consider enumerated objective indicators.

5. Right of Action Survives Death of Claimant

Section 2 provides for actions “by or on behalf of” a spouse or child. Therefore an action may be brought on behalf of a claimant by a personal representative of a claimant who survives the testator but dies before commencing or completing the claim.

In Currie Estate v. Bowen 35 B.C.L.R. (2d) 46, a husband died 6 weeks before his wife. He did not provide adequately for his wife. The wife died before she completed her claim. Her children, as her personal representatives were allowed to maintain her claim under the act. The act did not specifically provide for this, but the court found that the right of action vested at the time of the husband’s death, and it was implied that the wife’s personal representatives had the right to bring the action.

6. Property Subject to an Order

In Re Herron Estate (1941) 3 W.W.R. 877, it was held that if a testator, at death, was domiciled outside British Columbia, the testator’s real property in British Columbia is subject to the act, but not the testator’s personal property.

The Court will consider the total value of all property passing on death in determining what provision is adequate, just and equitable, but the Court only has jurisdiction to order provision from that portion of the actual estate of the deceased, and has no jurisdiction to deal with assets passing on intestacy, or outside the estate by joint ownership, designated beneficiaries and the like. Property that is settled by an inter vivos trust , such as was done in Re Collier (1967) 61 W.W.R. 761, does not from part of the testator’s estate for the purpose of this act.

Thus the practitioner needs to know the overall financial picture of the testator, both in terms of the value of the asset, as well as how the asset is registered. There may well be sufficient assets passing outside of the estate to satisfy any claim that might be brought under the act on the basis that the estate has not adequately provided for the claimant.

7. Some Leading Cases :

A) Walker v. McDermott (1931) S.C.R. 94

This leading Supreme Court of Canada case involved an application by a married daughter of the testator, who had left his entire estate to his wife. The Court directed payment of an allowance to the daughter. The frequently quoted statement of law from the case is as per Duff J. :

“What constitutes “proper maintenance and support” is a question to be determined with reference to a variety of circumstances. It cannot be limited to the bare necessities of existence. For the purpose of arriving at a conclusion, the Court on whom devolves the responsibility of giving effect to the statute, would naturally proceed from the point of view of the judicious father of a family seeking to discharge both his marital and his parental duty; and would of course (looking at the matter from that point of view), consider the situation of the child, wife or husband, and the standard of living to which, having regard to this and the other circumstances, reference ought to be had. If the Court comes to the decision that adequate provision has not been made, then the Court must consider what provision would be not only adequate, but just and equitable also. In exercising its judgment upon this, the pecuniary magnitude of the estate, and the situation of others having claims upon the testator, must be taken into account.”

B) Tataryn v. Tataryn 3 E.T.R. (2d) 229 S.C.C.

In 1995 the Supreme Court of Canada pronounced another ” landmark” case that is now the leading case in this area of law.

FACTS: After 43 years of marriage, a testator left an estate worth $315,000, amassed through the joint efforts of his widow and himself. In his will, testator left widow a life estate in the matrimonial home and made her the beneficiary of a discretionary trust of the income of the residue of the estate, with their son as trustee. Testator left the son the remainder interest in the home and residue, as well as a gift of a rental property. His widow and a disinherited son claimed against the testator’s estate under the Act.

HELD: In determining what was “adequate, just and equitable in the circumstances” pursuant to s. 2(1) of the Act, the Court was required to consider testator’s legal and moral obligations. In terms of testator’s legal obligation toward widow, had spouses separated prior to testator’s death, widow would have been entitled to a share of the matrimonial assets as well as maintenance, and therefore she was entitled to as much on the death of testator. In terms of a moral obligation, widow was entitled to independence in her old age and should not have to be made dependent on the discretion of her son. The appeal was allowed in part so as to give widow title to the matrimonial home and the residue of the estate after the gifts to the sons.

Under s. 2(1) of the Wills Variation Act, the court must ask itself whether the will makes adequate provision and if not, make an order that is adequate, just and equitable. Testamentary autonomy must yield to that which is “adequate, just and equitable” in the circumstances judged by contemporary standards. Spouses and children are entitled to an equitable share of an estate even in the absence of need. Both the testator’s legal and moral obligations must be addressed. Legal obligations are those which the law would have imposed on a person during his or her life were the question of provision for the claimant to have arisen. Maintenance and property allocations which the law would support during the testator’s lifetime should be reflected in the court’s interpretation of what is adequate, just and equitable in the circumstances after the testator’s death. Moral obligations are society’s reasonable expectations of what a judicious person would do in the circumstances, by reference to contemporary community standards. Most people would agree that a strong moral obligation exists for a supporting spouse to provide for a dependent spouse or dependent adult child after his death, if the size of the estate permits. Even independent adult children should receive some provision if the size of the estate permits and in the absence of circumstances negating the obligation.

Where the estate permits, all these conflicting claims should be met. Where priorities must be considered, claims based upon legal obligations should take precedence over moral claims. The testator’s freedom to dispose of his property should not be interfered with lightly, but only in so far as the statute requires. Here the testator’s legal obligation was to provide maintenance for his wife and a share in the family assets. Morally, it could not be just and equitable to deprive the wife of the estate in her old age simply because her husband died first. To confine her to such sums as her son E. might give her would fail to recognize her deserved independence and her moral claim. She should receive title to the matrimonial home, a life interest in the rental property and the entire residue of the estate other than the immediate gifts to the sons. The moral claim of the sons would be adequately met by the immediate gift of $10,000 each and a residuary interest in the rental property divided one-third to J. and two-thirds to E.

C) Bell v. Roy Estate 75 B.C.L.R. (2d) 213

FACTS: A widowed testator drew a will leaving her $90,000 estate to one of her three children. She wrote a letter to the court at the time, explaining her reasoning_ her daughter was largely estranged, and her son was antisocial and criminal, and had been a burden to her. The daughter sued and her claim was dismissed and upheld by the appeal court.

HELD: Absent evidence of need on the part of the “disinherited” adult child, if the court finds that the testator honestly believed , when the will was signed that 1) she had made substantial inter vivos gifts to the child, and 2) in her declining years, she had been neglected by such child, then the court will not make a new will for the testator.

Another leading case that follows this line of authority is Kelly v Baker (1996) 82 B.C.A.C 150, where the B.C Court of Appeal held that a testatrix had valid and rational reasons for disinheriting her adult adopted son. Her will stated that he was disinherited because he chose to abandon the family and “live a life morally unacceptable to us”.

D) Allardice v. Allardice 1911 A.C. 730 (House of Lords)

Justice Cooper stated at p. 975:

” I repeat that we have no power to recast the testator’s will or to redress inequalities or fancied injustice, but only to secure a sufficient provision for the proper maintenance and support of those children of the testator who have been left by him without proper and adequate means of support. This general rule is, I think, the governing principle. Its application depends upon all the circumstances of each particular case. ”

Stout C.J. stated at pp. 969_70:

“The matter that should be considered, both as to widow and children, is how she or they have been maintained in the past. A child, for example, that has been living on a father’s bounty could not be expected to begin the battle of life without means. A child, however, who had maintained her or himself, and had perhaps accumulated means, might well be expected to be able to fight the battle of life without any extraneous aid. But even in such a case, if the fight was a great struggle, and some aid might help, and the means of the testator were great, the Court might, in my opinion, properly give aid “.

8. Summary of Basic Principles_ The Clucas Decision

 

An excellent summary of the basic principles can be found in the decision Clucas v. Clucas Estate 29 E.T.R.(2d) 222 at paragraph 12:

1. The main aim of the Act is the adequate, just and equitable provision for the spouses and children of testators. (Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 (S.C.C.)

2. The other interest protected by the Act is testamentary autonomy. In the absence of other evidence a Will should be seen as reflecting the means chosen by the testator to meet his legitimate concerns and provide for an ordered administration and distribution of his estate in the best interests of the persons and institutions closest to him. It is the exercise by the testator of his freedom to dispose of his property and is to be interfered with not lightly but only insofar as the statute requires. (Tataryn, supra)

3. The test of what is “adequate and proper maintenance and support” as referred to in s. 2 of the Act is an objective test. The fact that the testator was of the view that he or she adequately and properly provided for the disinherited beneficiary is not relevant if an objective analysis indicates that the testator was not acting in accordance with society’s reasonable expectations of what a judicious parent would do in the circumstance by reference to contemporary community standards. (Tataryn, supra; Walker v. McDermott (1930), [1931] S.C.R. 94 (S.C.C.); Price v. Lypchuk Estate (1987), 11 B.C.L.R. (2d) 371 (B.C. C.A.); Dalziel v. Bradford (1985), 62 B.C.L.R. 215 (B.C. S.C.)

4. The words “adequate” and “proper” as used in s. 2 can mean two different things depending on the size of the estate. A small gift may be adequate, but not proper if the estate is large. (Price v. Lypchuk Estate, supra)

5. Firstly, the court must consider any legal obligations of the testatrix to her spouse or children and secondly, the moral obligation to her spouse or children. (Tataryn, supra)

6. The moral claim of independent adult children is more tenuous than the moral claim of spouses or dependent adult children. But if the size of the estate permits, and in the absence of circumstances negating the existence of such an obligation, some provision for adult independent children should be made. (Tataryn, supra)

7. Examples of circumstances which bring forth a moral duty on the part of a testator to recognize in his Will the claims of adult children are: a disability on the part of an adult child; an assured expectation on the part of an adult child, or an implied expectation on the part of an adult child, arising from the abundance of the estate or from the adult child’s treatment during the testator’s life time; the present financial circumstances of the child; the probable future difficulties of the child; the size of the estate and other legitimate claims. (Dalziel v. Bradford, supra and Price v. Lypchuk Estate, supra).

8. Circumstances that will negate the moral obligation of a testatrix are “valid and rational” reasons for disinheritance. To constitute “valid and rational” reasons justifying disinheritance, the reason must be based on true facts and the reason must be logically connected to the act of disinheritance. (Bell v. Roy Estate (1993), 75 B.C.L.R. (2d) 213 (B.C. C.A.); Comeau v. Mawer Estate (January 8, 1999), Doc. Vancouver A970766 (B.C. S.C.); and Kelly v. Baker (1996), 15 E.T.R. (2d) 219 (B.C. C.A.)

9. Although a needs/maintenance test is no longer the sole factor governing such claims, a consideration of needs is still relevant. (Newstead v. Newstead Estate (1996), 11 E.T.R. (2d) 236 (B.C. S.C.))

9. No Requirement to Treat Each Child Equally

 

The court will only intervene where the facts show that the judicious parent , acting in full knowledge of the true facts, would have made a different disposition of the estate among his adult children. Griffin v McCarthy 36 E.T.R. 129.

In Chernecki v Vangolen 1997 3 W.W.R. 589 (C.A.), the Court of Appeal found that a will that left $1.16 million dollars equally to two children should not be interfered with, as the will had made adequate provision for each child.

In Cavadini v Mahaffey Estate ( 1995) B.C.A.C. 220 it was held that the law does not require a testator to treat all children equally.

However, in Ryan v. Delahaye Estate 2003 BCSC 1081, the court varied a will that left % 80 to the son and % 20 to the daughter to an equal %50. The daughter had been given away to be raised by her grandmother when her brother was born. The son was given more advantages in life than the daughter and received a better education and opportunities. The Court found that the reasons stated in the will for the unequal portions were not valid and rational. The daughter had limited skills, deteriorating health and given the size of the estate about $700,000, she had not been adequately provided for.

10. Limitation Period

 

An action must be commenced within 6 months of the granting of letters probate or resealing of the probate. An action may be commenced before the grant of probate.

If a defendant gave assurances that the 3estate would be divided equally notwithstanding the terms of the will, the principle of promissory estoppel may be applied to permit the commencement of an action under the Wills Variation act after the six month limitation period has expired. Macdonald v. Macdonald Estate (1996) 21 B.C.L.R. 680 ( B.C.C.A.)

11. Executors Duties and Concerns

The role of an executor is to carry out the terms of the will. The executor has no power whatsoever to vary a will or to agree to same. Only a Judge of the Supreme Court or Court of Appeal has the power to legally vary a will.

Section 12 of the Act provides that an executor is not to distribute any of the estate assets until the expiration of six months from the grant of probate, unless all persons entitled to apply under the act consent, or a court so orders. Failure to comply could make the executor personally liable for any losses.

Once an action has been commenced, the executor must remain “neutral” since the executor is by law the guardian of the estate assets. The executor should present all relevant evidence before the court and primarily take the position that he or she is there to assist the court. A conflict of interest situation may well arise if the executor is also a beneficiary.

It is important when acting for or as an executor that any settlement be made subject to Court approval and that Court approval be obtained before distributing the assets in accordance with the terms of the settlement. Once again, only a Judge can vary the terms of a will.

12. Privilege of Your File Contents

The issue of privilege will invariably arise in Wills Variation actions re the production of the professional’s file and notes. The privilege of the deceased client (the testator) will now attach to the executor. In each case you should take your clients instructions after discussing the claim of privilege. You should consider seeking advice from your counsel on this topic.

Generally speaking , the claim of privilege will be upheld where the action is a Wills Variation action only (ie doesn’t also include a claim for lack of capacity or undue influence), on the basis that the true purpose of attempting to obtain the file is not to determine the true intention of the testator, but instead is for the purpose of attempting to defeat that purpose. Gordon v. Gilroy (1994) B.C.J. No. 1927, Master Joyce.

13. Change In Circumstances From Date Will Drawn

The variation of a will is entirely up to the discretion of the court. The circumstances to be considered are those existing at the time that the will comes into effect, not when it was signed. Accordingly, the court will look at evidence in changes in circumstances over the intervening years, which may include things like the relative financial circumstances of the parties, the manner in which they behaved during the testator’s life, and the receipt of any loans or gifts made during the testator’s life to the detriment of claimants. Purser v Purser 31 E.T.R. 299.

14. Disabled Claimants

Tataryn strongly suggests that there is an obligation to adult dependent children. This was recognized in Newstead v Newstead Estate (1996) 11 E.T.R. (2d) 236 (B.C.S.C.)

FACTS: The testator died leaving three adult children, all of whom had tragic personal circumstances. The oldest was confined to a mental institution for ten years, the middle child had been in a foster home and drifted into a life of crime. The youngest child was severely mentally handicapped and institutionalized. The value of the estate was $950,000. The testator gave 1/25 to each child, 15/25ths to his ex_daughter _in_law, and 7/25ths to friends and charities.

HELD: The court varied the will so that 1/3 of the estate went to the Public Trustee , 1/6 to the eldest child, and 1/6 share to the middle child, 1/6th to the daughter _in_law, and 1/6 to the friends and others.

Two principles were clear :

 

1) There is a moral obligation to provide for a mentally incompetent dependant even though the dependant is a ward of the state ( in effect, a testator has a duty to absorb or reimburse the state),and

2) This same obligation exists regardless of whether or not the dependant would benefit personally from any part of the contribution.

There are a few cases that illustrate that the Courts will be inclined to vary a will that does not make a generous provision for a disabled child, adult or otherwise.

15. Methods of Circumventing the Act :

It is important to note that the Act contains no anti_avoidance provisions. There are several anti_avoidance techniques that are frequently used quite successfully. The courts deem the Act to be remedial, and if the testator fails to take steps to avoid the Act, then he or she have “volunteered” to be caught by its provisions.

A) Written Memorandum pursuant to S . 5 of the Act:

It is not sufficient for the practitioner to simply include a one or two line statement in the will that the testator has been estranged, or badly treated by the person that is to be disinherited . The reasons for the inadequate provision should be detailed as much as possible and either stated within the will, or stated in a memorandum that accompanies the will. The reason the disinheritance should be valid and accurate and not malicious. The practitioner should charge accordingly for this additional service.

The law does not require that the reason expressed for disinheriting an individual be justiciable_ the reasons need only be rational and valid. Kelly v. Baker B.C.C.A Oct.16/96 following Bell v. Roy (1993) 75 B.C.L.R (2d) 213 (C.A.)

In Kelly v. Baker the court found that there was good reason by the testator to have believed that the plaintiff daughter had abandoned the family and treated her parents in a hateful and hurtful way.

Under the Act, the weight to be given to evidence of the reasons for disinheriting a child is affected by the accuracy and not by morally acceptable or unacceptable content.

There are many cases where estranged adult children have been disinherited by the courts. Our Court of Appeal in Price v Knutson (1987) 4 W.W.R. 128 stated that ” the moral duty imposed by the Act does not require a testator who has been rejected by a member of his family to ignore the rejection. However, if the estrangement has been caused by conduct of the testator, rather than the child, the courts will still find the testator failed to meet his or her moral obligation and revise the will.

In Pattie v. Standal 42 B.C.L.R. (3d) 211,, a child never saw his father again after age seven due to a divorce. The child’s mother did not receive child support. The deceased left his estate to his common law wife of two years. There was no memorandum to the will or other evidence as to why the child was disinherited. The court awarded the child 50% of the estate on the basis of both the failure to met the moral obligation, as well as failing his legal obligation to support his child during his lifetime.

The onus is on the plaintiff to show that the reasons acted upon by the testator were” false or unwarranted”.

B) Joint Tenancy with Right of Survivorship

Assets registered in joint tenancy do not form part of the deceased’s estate, and devolve by law to the surviving tenant. Thus, subject to the law of resulting trusts, this can be a very effective way of avoiding the act. If assets are to be transferred into joint ownership for little or no consideration, then it should be made very clear in writing that it was the intention to make a gift of the assets, so as to avoid any presumption of trust. Such intention should be well documented in the professionals notes as well as corroborated by a Deed of Gift and /or a statutory declaration of the donor.

C) Inter Vivos Gifts

Perhaps the best example of the court’s reluctance to interfere with a large inter vivos gift is found in Hecht v Hecht Estate 42 E.T.R. 295:

The parties cohabited 6 : months and were married 49 days. The surviving widow was a successful businesswoman before marriage. She received $1 million under the will from an estate valued at $32 million. The testator disposed of $30 million before death, by inter vivos gifts, that were part of an estate_planning scheme. The court found that the $30 million were not assets forming part of the estate, and thus could not be contested under the act.

Again, if you are consulted about the intention to make a substantial gift, then your notes should reflect the intention and a Deed of Gift or a statutory declaration should be signed by the donor as to his or her intention.

D) Trusts while alive ( inter vivos trust)

The same principles apply to the creation of a trust before death as inter vivos gifts.

Assets that are settled by an inter vivos trust will not form part of the estate assets of the deceased, so are not vulnerable to an attack under this act.

E) Designated Beneficiaries under Insurance and Pensions

Such assets pass outside of the estate to the named beneficiary, and thus cannot be attacked under the act.

F) Dying Intestate

It is possible to contract out of the provisions of the Estate Administration Act dealing with intestacy. Thus this could be an alternative where the testator wished to benefit those persons who would benefit on an intestacy. ie a second spouse contracts out of the Act, and the testator leaves estate on intestacy to his children from a first marriage.

G) Contracting Out

Generally, the Wills Variation Act is remedial and cannot be contracted out of. As a consequence, a contract with a spouse, or even a child, to not bring an action under the Act may not be enforceable, but would still be influential to the court.

For example, in Lobe v Lobe Estate 37 B.C.L.R. (3d) 138 (B.C.C.A)

FACTS: The plaintiff wife and the deceased husband each had children from previous marriages. Both had substantial wealth. They entered into a marriage agreement whereby their property was to remain separate. The wife’s holdings would be permitted to grow for the benefit of her children and the husband’s holdings would pass to his children. After he became terminally ill, the husband instructed that a new will be drawn up to divide his estate between his children and to give the wife controlling shares in a company they owned together, as well as a life estate in the matrimonial home and certain property. At the time of probate, the husband’s estate was valued at $8 million. Including survivorship benefits, the wife’s holdings were estimated at $4 million. The wife sought to have the will varied to effectively ignore the marriage agreement and give her full ownership of the company, the home and property and a $1 million capital fund.

HELD : The wife’s application was dismissed. Given the wife’s substantial wealth and the marriage agreement which governed the financial structure of the marriage, from which she benefitted, the judge could not accept that contemporary community standards would dictate that a judicious person in the deceased’s position would, in arranging the disposition of his estate, have been expected to depart from what was agreed at the outset, was consciously adhered to throughout, and had never become the subject of concern or complaint. He had no moral obligation to arrange his affairs differently.

The wife appealed and it was dismissed.

A pre_nuptial agreement was upheld by the Court of Appeal in disallowing a widow’s claim under the Act in Howard v Howard February 25,1997 Victoria Registry #19970225. See also Wagner v Wagner Estate 39 E.T.R. 5, where the judge stated that final settlement agreements are to be respected in the absence of compelling reasons to the contrary.

12. Conclusion

It is important for an estate practitioner to carefully canvass the testator’s intentions and finances when dealing with a blended family wills situation. Many testators are inclined to ignore possible claims against their estates by children or spouses that are not being adequately provided for, and need to receive professional advice.

The practitioners notes should include a discussion about the effects of the act and the various means of circumventing or dealing with the act in problem situations, and the advice that was given.

You Are Richer Than You Think

Richer Than You Think?

Jun 22nd 2013 |From the print edition From The Economist Last year 12m people in the world had $1m or more in investible assets. That is 1m more “high-net-worth individuals” than in 2011. After falling in two of the previous five years, their combined wealth increased by 10% in 2012 to a record $46.2 trillion. America, home to 3.4m very rich folk, Japan (1.9m) and Germany (over 1m) account for more than half of the world’s wealthy . Of the 12 countries with the most super-rich people, only Brazil failed to swell its numbers last year, as its economy slowed. North America reclaimed its position from Asia-Pacific as home to more extremely wealthy people than any other region, but its lead is unlikely to last, as Asia has many of the fastest-growing economies.

Highest U.S Court Bans Patents On Isolated Human Genes

Genes

Patents on isolated gene therapy will be an increasing source of public  demand, legislative control, and  litigation.

Reprinted from the New York Times June 13, 20113, such a ruling would be persuasive but not binding on a Canadian court.These types of cases will become increasingly frequent and significant in years to come and will have an effect on over all inheritance laws.

Isolated human genes may not be patented, the Supreme Court ruled unanimously on Thursday. The case concerned patents held by Myriad Genetics, a Utah company, on genes that correlate with increased risk of hereditary breast and ovarian cancer.

The patents were challenged by scientists and doctors who said their research and ability to help patients had been frustrated. The particular genes at issue received public attention after the actress Angelina Jolierevealed in May that she had had a preventive double mastectomy after learning that she had inherited a faulty copy of a gene that put her at high risk for breast cancer.

The price of the test, often more than $3,000, was partly a product of Myriad’s patent, putting it out of reach for some women. The company filed patent infringement suits against others who conducted testing based on the gene. The price of the test “should come down significantly,” said Dr. Harry Ostrer, one of the plaintiffs in the case decided Thursday. The ruling, he said, “will have an immediate impact on people’s health.”

The court’s ruling will also shape the course of scientific research and medical testing in other fields, and it may alter the willingness of businesses to invest in the expensive work of isolating and understanding genetic material.

The decision hewed closely to the position of the Obama administration, which had argued that isolated DNA could not be patented, but that complementary DNA, or cDNA, which is an artificial construct, could. The patentability of cDNA could limit some of the impact on industry from the decision.

Myriad’s stock price was up about 10 percent in early trading, a sign that investors believed that Myriad had retained the ability to protect its business from competition.

“I think everybody that was paying close attention to this case pretty much guessed what they were going to do,” said Robert Cook-Deegan, a research professor at Duke University’s Institute for Genome Sciences and Policy, who has closely followed the case and the issue of gene patenting.

Dr. Cook-Deegan said he thought Myriad would now face competition for testing for the breast cancer risk genes.

“I think there might be some blustering or saber rattling, but I would be really surprised if they sue anybody for patent infringement for a diagnostic test,” he said about Myriad.

He said that there were only a small number of diagnostic companies that relied on isolated DNA patents to protect their business, and that the impact of the decision on the broader biotechnology industry might be limited.

The central question for the justices in the case, Association for Molecular Pathology v. Myriad Genetics, No. 12-398, was whether isolated genes are “products of nature” that may not be patented or “human-made inventions” eligible for patent protection.

Myriad’s discovery of the precise location and sequence of the genes at issue, BRCA1 and BRCA2, did not qualify, Justice Clarence Thomas wrote for the court. “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated,” he said. “It is undisputed that Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes.”

“Groundbreaking, innovative or even brilliant discovery does not by itself satisfy the criteria” for patent eligibility, he said.

But manipulating a gene to create something not found in nature, Justice Thomas added, is an invention eligible for patent protection.

He also left the door open for other ways for companies to profit from their research.

They may patent the methods of isolating genes, he said. “But the processes used by Myriad to isolate DNA were well understood by geneticists, ” Justice Thomas wrote. He added that companies may also obtain patents on new applications of knowledge gained from genetic research.

Andrew Pollack contributed reporting from New York.

Kobe and Mom Settle Over Memorabilia

Settlement reached between Kobe Bryant, parents in auction dispute.

Kobe Bryant’s mother sought to auction off a number of his high school jerseys. (GoldinAuctions.com)

A settlement has been reached by Kobe Bryant and his parents over a deal struck between Bryant’s mother and a New Jersey auction house to sell hundreds of the Lakers star’s personal items, according to multiple reports.

ESPN.com and the Associated Press report that the settlement will save a vast majority of Bryant’s items, several of which date to his days as a high school star, from the auction block and that his parents issued a public apology for their actions.

The agreement allows the sale of six items, which Goldin Auctions president Ken Goldin told ESPN.com on Monday morning he is confident still can sell for more than $500,000 combined.

Bryant’s parents, who had contracted with Goldin to sell the items, apologized in a written statement.

“We regret our actions and statements related to the Kobe Bryant auction memorabilia,” Joe and Pamela Bryant said in the statement provided by a publicist. “We apologize for any misunderstanding and unintended pain we have caused our son and appreciate the financial support he has provided over the years. We also apologize to Goldin Auctions for their inadvertent involvement in this matter and thank them for their assistance.”

Included in the auction will be two of Bryant’s high school uniforms and two rings celebrating the 2000 Lakers championship team that were gifted at the time to Bryant’s parents. … Bidding will start June 17 and close July 19.

The dispute became public in May after Bryant’s mother, Pamela Bryant, received $450,000 from Goldin Auctions in exchange for hundreds of Bryant’s personal items that she had been storing for him. Shortly after the auction was announced, Bryant maintained that his parents had no right to auction off his belongings and that he wasn’t aware of their intentions.

The Los Angeles Times reported that Pamela Bryant took the money so that she could purchase a house in Nevada. A lawyer for Bryant reportedly contacted the New Jersey-based auction house in May with a cease-and-desist letter that requested that the auction, which was already being marketed on GoldinAuctions.com, be halted.

“Mr. Bryant’s personal property has ended up in the possession of someone who does not lawfully own it,” said Kobe Bryant’s attorney, Mark Campbell. “We look forward to resolving this legal matter through the legal system.”

The Associated Press reported that Goldin Auctions, which reached an agreement with Pamela Bryant for the items back in January, wanted to continue with the auction and sued Kobe Bryant in response to his cease-and-desist.

A New Jersey auction house filed a lawsuit in U.S. District Court in Camden on Thursday for the right to sell the stuff after the NBA star’s lawyers wrote the firm telling it to cancel a planned June auction.

In its court filings, Goldin says Pamela Bryant told the auction house that she asked her son five years ago what he wanted to do with the items that were in her home.

“Kobe Bryant indicated to Pamela Bryant that the items belonged to her and that he had no interest in them,” the auction house’s attorneys wrote. So she put them in a $1,500-per-month New Jersey storage unit.

Kenneth Goldin, owner of the auction house, says he can’t cancel the auction because he’s already advanced $450,000 to Bryant’s mother and put money into advertising the auction.

Meanwhile, ESPN.com reported that Pamela Bryant only sought to auction the items after her son refused to provide her with the money to purchase the home she wanted.

A source told ESPN that Kobe Bryant offered to pay his mother up $250,000 toward a home she wanted. She refused, saying she wanted $450,000. When Kobe Bryant turned her down, the source said that unbeknownst to Kobe Bryant she struck a deal to get the $450,000 advanced through the auction company.

The source said Kobe Bryant was unaware that his memorabilia was being auctioned until hours before the auction company released the news of the sale. Sources close to Kobe Bryant confirmed to ESPNLosAngeles.com that before learning about the auction through news reports, the Lakers star has given his parents “millions of dollars in financial assistance” throughout his 17-year career.

So what exactly was at the center of this dispute between mother and son? Goldin Auctions announced the “The Bryant Collection” back in May, providing these details in a press release.

The centerpiece of The Bryant Collection: presented by Goldin Auctions is a road maroon Lower Merion High School (LMHS) #24 basketball uniform (shorts and jersey) from Bryant’s freshmen year. This uniform is special in that he only wore #24, as a freshman, before switching to #33 for the remainder of his high school career. It is believed to be the only authentic game worn #24 Kobe Bryant LMHS jersey in existence. The next time he wore a #24 jersey was when he switched his NBA number to it after the 2005-06 NBA season. When he finally removes #24 from his back, it will hang in the rafters alongside, Wilt, Kareem, Magic and Shaq.

In addition to offering one fortunate collector the chance to own this rare #24 uniform, The Bryant Collection also includes two complete #33 LMHS uniforms (shorts and jersey) worn by Bryant during his high school career. One uniform is in the home white and the other is the road maroon.

The six rings in the collection include: a 1996 High School McDonald’s All-American ring; 1996 High School State Championship ring; 1998 and 2000 NBA All-Star rings; plus a team issued Kobe Bryant 2000 Lakers championship ring given by Kobe to his father Joe Bryant and a specially designed version for his mother Pamela Bryant.

Here’s the original GoldinAuctions.com promotional artwork for the collection, which includes shots of Bryant’s jerseys, medals, trophies, and rings.

No Constitutional Right To “Know One’s Sperm Donor

 

unknown sperm donorThe Supreme Court of Canada ruled there is no constitutional right to know one’s past by obtaining information on your own past from your sperm donor.

 

Pratten v Attorney General of BC and College of Physicians and Surgeons of BC, the Supreme Court of Canada dismissed an appeal from the BC Court of Appeal found at 2012 BCCA 480,that had denied an adopted child the right to “learn her background” by gaining access to the name of the anonymous sperm donor that impregnated her mother.

The child and appellant argued the Charter of RIghts, that it was a constitutional right to know such, but both appeal courts disagreed.Despite the fact that the records of her biological father had long been destroyed, an action was commenced for a declaration that by enacting legislation that allows adopted children to find out their natural parents, the laws discriminated against those born from a sperm donor.

The Court of Appeal stated that just becasue a particular section of a statute or regulation is held to be of no force and effect does not mean that related provisions are also constitutionally unsound.

It is significant that the right “to know one’s past” was found not to be a principle of fundamental justice within s. 7 of the Charter in Marchand v. Ontario, 2007 ONCA 787, 288 D.L.R. (4th) 762, affg (2006), 81 O.R. (3d) 172 (S.C.J.), leave refd [2008] 1 S.C.R. ix (sub nom. Infant Number 10968). In that case, Ms. Marchand, an adoptee, wanted to know the identity of her biological father. The man named by Ms. Marchand’s biological mother as her father on the original birth registration denied paternity and refused to consent to the disclosure of his name. In an effort to gain access to that information, Ms. Marchand challenged the legislation denying her access on the basis that it violated her rights to liberty and security of the person under s. 7 of the Charter. That challenge was rejected by a judge of the Ontario Superior Court of Justice and Ms. Marchand appealed. In dismissing that appeal, the Court of Appeal (at para. 12) agreed with the following statement by the judge that the denial of access did not engage a principle of fundamental justice:

A principle of fundamental justice must fulfil the following criteria:

It must be a legal principle that provides meaningful content for the s. 7 guarantee while avoiding adjudication of public policy matters;
There must be a significant societal consensus that the principle is “vital or fundamental to our societal notion of justice”; and
The principle must be capable of being identified with precision and applied to situations in a manner that yields predictable results.
(See: Canadian Foundation for Children at paras. 8-11 and R. v. Malmo-Levine, [2003] 3 S.C.R. 571 at para. 113.)

The unconditional disclosure of identifying personal information of third parties, even if they are birth parents of the claimant, without regard to the privacy and confidentiality interests of the persons identified and without regard to any serious harm that might result from disclosure, fails to meet the above criteria. It is not a principle that is vital or fundamental to our societal notion of justice. It is instead a proposition of public policy that continues to be vigorously debated.

[Emphasis added.]

See also: Cheskes v. Ontario (Attorney General) (2007), 288 D.L.R. (4th) 449 at para. 116 (Ont. S.C.J.).

[53] In support of her contention that the right to know one’s biological origins is a fundamental constitutional right, Ms. Pratten cites Rose v. Secretary of State for Health, [2002] EWHC 1593 (Admin), [2002] 3 FCR 731. In that case, two offspring of anonymous donors brought an action against the Secretary of State challenging his failure to promulgate regulations that would facilitate their obtaining information about their biological fathers. In a preliminary ruling, a judge of the Queen’s Bench Division held that Art. 8(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, November 4, 1950, 213 U.N.T.S. 222 [E.C.H.R.] was engaged because it encompasses the right of an individual to obtain information about his or her biological origins. Article 8 provides:

Everyone has the right to respect for his private and family life, his home and his correspondence.
There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
[Emphasis added.]

However, the judge did not decide whether the Secretary of State’s inaction constituted a violation of Art. 8.

[54] What is noteworthy about the decision in Rose is that it does not rest on Art. 5(1) of the E.C.H.R. which partially mirrors s. 7 of the Charter. Article 5(1) reads, in part:

Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law:…

[55] Not only is Rose based on wording that has no equivalent in the Charter, it is based on a legal instrument that has no application to Canada. It is a regional treaty, entered into by the member states of the Council of Europe. The decision cannot be read as providing support for the proposition that the right “to know one’s past” is generally accepted as being of fundamental importance.

[56] Ms. Pratten also relies on the United Nations Convention on the Rights of the Child, November 20,1989, 1577 U.N.T.S. 3 [C.R.C.], which Canada has ratified. Article 8 of the C.R.C. reads:

States Parties undertake to respect the right of the child to preserve his or her identity, including nationality, name and family relations as recognized by law without unlawful interference.
Where a child is illegally deprived of some or all of the elements of his or her identity, States Parties shall provide appropriate assistance and protection, with a view to re-establishing speedily his or her identity.
[57] I do not read this provision as imposing on States Parties an obligation to provide mechanisms to enable donor offspring to obtain the personal information of third parties who are not their legal parents. Parenthetically, I note that British Columbia, which constitutionally has legislative jurisdiction over adoption, is not a party to the C.R.C.

[58] The history of Art. 8 is noteworthy. Its inclusion in the C.R.C. was proposed by a delegate from Argentina to deal with children who had been abducted from their parents and later renamed and registered as the children of either the abductors or third parties: Summary Record of the 54th Meeting of the Commission on Human Rights, U.N. Document E/CN.4/1985/SR.54.

[59] That neither Art. 8 nor any other provisions of the C.R.C. is viewed internationally as supporting the right “to know one’s past” is further evinced by the observations of the United Nations Committee on Human Rights of the Child. That Committee is an independent body that monitors the implementation of the C.R.C. by States Parties. In its “Concluding observations” issued on October 9, 2002, in response to a report submitted by the United Kingdom, the Committee stated (U.N. Document CRC/C/15/Add.188):

Why Families Fight Over Inheritances

Dysfunctional family roles

The reasons why families fight over inheritances is much more complicated than simply greed.

The book Blood and Money  by P. Mark Accettura is required reading for anyone involved in the business of estate disputes, or anyone going through one or about to do so.The book is both academic in its anecdotal “research” as well as entertaining. The author was in the estate planning and elder law area for 30 years and weaves 5 years of research into various aspects of everything ranging from psychology to gerontology to produce this interesting read. He observes and reflects the experiences of disinheroited.com, that a significant number of estate disputes involve parties who come from dysfunctional families, that often have shades of mental illnesses, or addictions or personality disorders of many kids, but often narcissistic personalities.  The author posits five basic reasons why families fight over inheritances  1. Humans are genetically disposed to conflict; 2. Our self is intertwined with the approval that an inheritance represents, especially if the deceased is a parent; 3. People are hard wired to look for exclusion, to the point of some finding it where it doesn’t exist; 4. The death of a loved one activates the death anxiety of the loved ones left behind; 5. A family member has a personality disorder that distorts and exacerbates the natural family tensions into legal battles. In the experience of disinherited.com, many of these dysfunctional families”hang together” while the parent(s) are alive, but after the death of both parents, the fight is on.

Japanese Adoptions of Adult Males

Adoption Japan

Had I not read the following in the Economist I would not believe the practice of Japanese males adopting single male heirs when faced with  having only female heirs.

 

It would not surprise most North Americans to learn that 98% of adoptions there involve youngsters.

It would however likely amaze most North Americans to learn that the exact opposite is the case in Japan where children make up only 2% of adoptions.

The Economist this week reports that men in their 20s and 30s, and totaling 90,000 persons in 2008, were adopted by nonfamily related adults.

The Economist went on to say that the reasons are largely mercantile and historical, and in effect is a way of elevating the family gene pool where business acumen and skill of are not reliably hereditary, or there is a male gap in the family line. Before the second world war  Japanese law provided that family wealth passed along male lines, traditionally to the eldest son.

In a daughter only household this fueled the demand for adopted sons to carry on the family name and business. Similarly if a son was deemed unsuitable then it was socially acceptable to go outside of the family and adopt a more promising outsider to be brought into the family.

Japanese culture to a Westerner is very complex and one of the added complexities to their culture is a drastically declining birthrate which again has put increasing pressure on finding suitable male heirs to carry on family businesses. Perhaps even more culturally perplexing is the “gold value” in  famous Japanese names such as Toyota, Suzuki, Canon, and other family names, whose sons are often deemed promising top prospects for adoption.

Accompanying such  sweetheart adoptions are often extremely lucrative ” incentives”.

Perhaps the most startling finding of all is that research indicates that adopted heirs clearly outperform blood heirs. Again from a Western perspective it seems that this fixation on male succession will only lead to increasing social tensions as women continue to be socially repressed to such an extent .