Tag: Undue Influence

The law relating to ademption applies when a particular item in a will is described with such specificity that it is clearly distinguished from other property owned by the deceased. If that specific property is not found among the testator’s assets after death, the gift is said to have adeemed-the gift fails and the technical term for the failure of the gift in such circumstances is ademption. The gift is said to have adeemed.

The rule applies whether the testator ever really did own the property or not .

For example testators often believe that they are the owners of property and after death, it is learned that the property was actually in another name such as a corporate entity or in joint tenancy.

The other common example that disinherited.com has witnessed is simply caused by  poor draftsmanship in a will.

The will often specifies a specific civic address to be left to a beneficiary,  when upon death it is learned that the property had been sold during the lifetime of the testator, who instead died owning another parcel of property with a different civic address.

(The proper wills drafting should have been instead something like “any residence that I own at the time of my death I hereby bequeath to ?”

In both situations the gift of the property will have adeemed.

Whether or not a gift has actually adeemed can in certain circumstances, be very difficult to determine.

Here are two examples of such litigation-there are many:

RE DEARDEN ESTATE; SHOEMAKER et al. v. PITTMAN et al.

            1987 CarswellMan 131, 26 E.T.R. 111, 46 Man. R. (2d) 222

 

By his will, made in 1970, the testator gave his dry-cleaning and laundromat business and the land where it was carried on to his nephew, MSM, and he gave the residue of his estate to his sisters and brother.

In February 1986, the testator entered into a contract to sell the business along with the land. The completion date for the contract was August 30, 1986. The testator died in June 1986. The contract, which was never in fact completed, was subject to certain conditions. In particular, the vendor was to subdivide the property by August 1, 1986; all structures on the land were not to encroach on any adjoining property; and the purchaser had a right to rescind if the financial position of the business was worse than that disclosed in financial statements provided by the testator. These conditions were never satisfied since subdivision had not occurred as of the date of the deceased’s death or as of the completion date; the building in question did encroach on land owned by the municipality and an agreement to resolve this encroachment was never made with that municipality; and the financial statements provided by the testator were in fact inaccurate, showing grossly inflated amounts for income.

The executors of the testator’s estate applied for the directions of the Court.

The Court held that there was no ademption-the he specific gift of the dry-cleaning and laundromat business, and the land on which it was carried on, was not adeemed by the contract of sale made by the deceased.

The doctrine of conversion applies only to a contract that is enforceable by and against the testator.

The contract made by the testator was not in fact enforceable by or against him since it was subject to two true conditions precedent (the conditions relating to zoning and encroachment) that were never satisfied. In addition, the contract was subject to the condition relating to financial statements which was not satisfied and which, not having been waived by the purchaser, rendered the contract unenforceable against the purchaser.

 

RE CUDECK

               1977 CarswellOnt 387, 1 E.T.R. 17, 16 O.R. (2d) 337, 78 D.L.R. (3d) 250

   Ontario Supreme Court, Court of Appeal

 

The testator’s will directed his trustee to pay M “the proceeds of a Term Deposit of $28,000.00 principal plus interest, … said Term Deposit having been made on or about November 10th, 1973.” At the time he executed his will, the testator had a term deposit of $28,000 at his bank. The testator subsequently cashed his term deposit and deposited the proceeds in his bank account. Thereafter the testator periodically purchased new term deposits, including a term deposit of $40,000, with the proceeds of the original and subsequent term deposits. During the currency of the $40,000 term deposit, the testator executed a codicil which in effect altered the terms of the original legacy so as to read:

To deliver and pay my friend, [M], … the proceeds of a Term Deposit of $40,000, … said Term Deposit having been made on or about November 10th, 1973, or at any time thereafter. …

The following year, the term deposit for $40,000 matured and its proceeds were deposited in the testator’s account. Subsequently, using the term deposit proceeds, the testator purchased a further term deposit for $36,000 and cashed it for $36,258.90. The testator supplemented the $36,258.90 with personal funds and purchased 37 one-thousand-dollar bills, which he deposited in his safety deposit box. At the testator’s death these bills were found in his safety deposit box along with a handwritten note which indicated that in the event of the testator’s death M was to get the contents of the box as a bequest.

At trial, the trial Judge found that M was entitled as a legatee, under the testator’s will, to $36,000.

On appeal, held, the trial Judge’s order was varied to include the interest received from the last term deposit, with the result that M was entitled to be paid $36,258.90 out of the $37,000 found in the safety deposit box.

No ademption.

The legacy to M would have been lost if:

(i) the proceeds of the term deposit could not have been traced, or

(ii) the testator in cashing the deposits had clearly appropriated the proceeds to himself, in which case they would have been adeemed.

Though the note found in the testator’s safety deposit box was not itself given testamentary effect, it was used to trace and identify the proceeds given by the will and codicil.

Kelly v Bell 2012 BCSC 841 is a  wills variance case ( WESA S 60)  where the court determined that the deceased did not intend to provide  %88 to one child and only %12 to another simply due to a dramatic increase in the value of a specific bequest to one of two children, and near doubled the award to the daughter.

 

This case involved one of historical friction between the deceased and her daughter, and greater contribution by the son , for the benefit of the deceased, and a greater need on the part of the defendant son for  future financial security.

The deceased had two children.

She left her house and half of her estate residue to the defendant son who had limited employment opportunities, and who was her caregiver.

She left the other one half of the residue to her plaintiff daughter, who had her own family, and who was financially comfortable.

When the testatrix reviewed her will in 2006, her house had a value of $1 million, and the residue had a value of $860,000.

At the time of her death two years later, the house had an assessed value of $2 million, and the residue had declined to just under $700,000.

The court held for the plaintiff and varied the will to the extent that the court found that the testatrix intended to divide her estate on the basis of 2006 values.

The court found that the deceased did not intend the daughter to receive only 12% as she would based on the 2008 values.

The court found that the daughter received 23% of the share of her estate as of 2006, and thus very the will to provide her with the same percentage based on the 2008 increased value, all of which was in the house bequeathed  to the son.

disinherited.com agrees with the reasoning and outcome of this decision.

The daughter may have been a thorn in her mother’s side, but the court was clearly correct in coming to the conclusion that the daughters behavior did not just entitled her so as to give her brother 90% of the estate.

Given the contributions and the relative financial disparity between the parties, together with the caregiver versus thorn in side, a variation of approximately 3/4 to 1/4 is well within the range of a proper outcome under these circumstances.

Digital executors are actually increasingly vital as ones “personal history on social media” is immortalized and sought after  death.

Trevor Todd was contacted by a local television station for the purpose of having an interview about the sudden “issue of the day “that was” Do you really need a special executor to protect your “digital afterlife, and who owns it after you die”?

A few television interviews were scheduled only to be canceled due to more pressing news such as a lost cat.

The issue seemed to disappear just as quickly as it had apparently become urgent.

I believe it started with the publication of a book entitled ” Your Digital Afterlife: When Facebook, Flickr and Twitter are your Estate, What is your Legacy? By John Romano and Evan Carroll.

One of the pressing points made by their book is to make sure that you name a digital executor to handle all of your digital assets.

The book apparently arose out of the personal experiences that the Romano  family, whose  close friend died leaving a robust online presence, only to find that estate litigation arose as to who owned the blogs, and whether or not they should be preserved ,as opposed to permanently removed from the Internet.

 

It would appear that the followers of hugely popular blogs feel that they have some form of legal interest in preserving the information contained therein.

I must admit that when I was asked,it simply reminded me of the first time lawyers realized that airline travel points were  valuable, but were an asset that existed somewhere else other than in a physical form.

That was 20 years ago.

As one can well imagine, there is a wealth of such Internet content that is valuable in more ways than monetary.

In fact ,in this digital age, people are accumulating assets digitally, with no trace of physical evidence of these assets, when these assets have traditionally had a physical existence in past times.

For example, photos, businesses, newsletters, and bank statements all existed in the physical form that were taken care of with traditional filing.

With the advent of social media and the Internet, and the movement for paperless offices and homes, together with cloud technology, more and more of our personal belongings, businesses and personal lives are now shared on the Internet.

Many people manage their finances on the Internet, through Internet banking, by paying their bills, doing money transfers, and receiving statements all online.

In fact, an increasing number of people make their living off the Internet,  through their websites and blogs.

 

The  legal question is – what happens to all of these digital assets after a person passes away?

 

The answer like most legal answers is it depends.

in most situations, your digital assets are simply another form of assets that form part of your estate,that will be distributed through your will.

 

For the purpose of estate planning, is more important in the writer’s opinion, that one keeps backing up your data.,and and providing you your executor and power of attorney with printed copies of banking records and other such valuable documents,

 

That is more important ,and once done you can then consider whether you need to or not,  appoint a specific person as digital executor and entrust that person with your  digital assets upon your death.

 

 

Most of the large social media outfits have a policy with respect to digital assets, and sos in legal terms, it often comes down to a matter of contract between you and the service provider, as to who owns the content after death.

 

As disinherited.com understands it, Facebook’s new policy is to provide the following options:

1. You can make a request as a close family member or executor to Facebook to memorize the deceased person’s account so that only friends can see the profile and located in the search. The profile will remain active for friends to post memories and condolences;

2. You can make a request as a close family member or executor to Facebook to delete the user account, removing the profile and all associated content from Facebook so that nobody can view it.

3. You can also download the account contents of the deceased, if prior authorization in a will or court order is present.

 

As a practical matter of advice, unless you are almost a professional writer or a very serious blogger, or someone who derives their business income from the Internet, disinherited.com does not opine that you need a digital executor to protect your digital assets after your passing.

More importantly, the practical concern is that you provide your Internet identification and passwords to your executor so that he or she can determine your online life, and access financial records and the like.

Similarly one should also provide his or her power of attorney with the same identification number and passwords, in case you are incapacitated and unable to provide same

Will Invalid

Calderaro v Meyer 2011 ONSC 5395 is an Ontario case where a will invalid as the deceased did not have knowledge and approval of the wills contents when it was executed.

The testator died in 2009.

Prior to that he lived in a common law relationship from Febraury 2005-February 2007 on property that the deceased had purchased.

After they separated the testator and his former partner signed an agreement that provided that after he died the property would become hers.

The testator suffered a stroke in February 2009 and his condition went rapidly downhill.

He subsequently sought to executre a will, which made his former partner the beneficiary of the same property.

He gave his wife the reside of the estate.

The testator was instructed to hold his mother’s hand and squeeze it to confirm that he understood and approved the terms of the will that was read to him.

The former partner brought an action for a declaration that the will was valid, or alternatively, the agreement for the land was binding.

 

Both claims were dismissed.

 

The will was invalid as the testator did not “know and approve ” of the contests of the will when he executed it, and thus it was invalid.

There was no evidence led by the mother that he understood the provisions of the will that were read to him

 

The court held there three criteria that must be established by the propounder of the will, who has the onus of proving its validity:

 

A) That the will was executed;

B) That the tesator had knowledge and approval of the will;

C) That the testator had the requesite capacity to make a will.

 

The Court found that due to his medical situation the requiements of “knowledge and approval” and testamentary capacity merged.

Hall v Bennett Estate 50 ETR (2d) 72   was followed:

The material time in determining testamentary capacity is when the testator signs the will.

The test to be met by the propounder is high

The propounder must establish not only that the testator was able to communicate his or her testamentary wishes, but also that those wishes are the product of  “sound and disposing mind”