Life is complicated, and especially so when losing loved ones. By preparing this broad checklist, we hope to provide you with some certainty and guidance through difficult times. We know that every situation is different and, if you have any questions, we are always here to help.

PRINTABLE CHECKLIST HERE

1. Arrange Funeral and Obtain Death Certificates

Consider ordering at least 3 original Death Certificates, which can be ordered through the funeral home.

2. Notify of Death

• • Canada Revenue Agency – income tax, GST/HST benefits, child tax benefits, etc.

Notify CRA at 1-800-959-8281 of the date of death as soon as possible, and send them a copy of the death certificate and a complete copy of the will or other legal document such as a grant of probate or letters of administration showing that you are the legal representative.

Website:https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4111/rc4111-19e.pdf

• • Canada Pension Plan (CPP), Old Age Security (OAS)

If the deceased was receiving OAS or CPP retirement pensions, disability benefits or survivor benefits, these must be cancelled. Benefits are payable for the month in which the death occurs; benefits paid after that will have to be repaid.

Complete an Application Kit which is available from any Service Canada Centre, 1-800-277-9914, and many funeral homes. Have the SIN on hand when you call.

Website:https://www.canada.ca/en/employment-social-development/corporate/contact.html

• • Service Canada – Social Insurance Number

Advise of the death to reduce the possibility of someone else using the deceased’s SIN.  You will still be able to use the SIN for estate purposes.

Provide the SIN card and a copy of the Death Certificate to Service Centre Canada at the address below.  If you do not have the SIN card but know the number, provide a Death Certificate with the SIN clearly written on it.

Notification in person

520 Seymour Street,
Kamloops, British Columbia, V2C 2G9

Notification by mail

Service Canada, Social Insurance Registration Office
P.O. Box 7000
Bathurst, New Brunswick, E2A 4T1

Website:http://www.servicecanada.gc.ca/eng/sin/apply/how.shtml

• • Medical Services Plan (BC) – Contact to cancel MSP coverage, 1-604-683-7151(Vancouver) or toll free 1-800-663-7100.

Website:http://www2.gov.bc.ca/gov/topic.page?id=C331CE70072946C59276A8B4A936C08D

• • Extended medical and pension plan

Contact to determine eligibility for continue benefit coverage for dependents.

• • Bank accounts

Contact financial institutions to remove the deceased’s name from joint accounts and convert sole accounts in the name of the Estate and inventory safe deposit box.

• • Life Insurance companies

Advise of death, and request claim forms and confirmation of benefits.

• • RSP / RIF accounts

Advise of death and arrange for transmission to successor.

• • Post office

Notify post office and redirect mail to executor’s address.

• • Passport Canada – If the deceased has a valid passport (ie. not expired) mail in the passport to the Government of Canada Passport program at:

Passport Program
Gatineau QC K1A 0G3
Canada

Include a copy of the death certificate and a letter explaining whether you would like Passport Canada to return the cancelled passport to you or whether they can securely destroy it.

If the deceased did not have a valid passport (i.e. the passport was expired), you do not need to return it to Passport Canada. However, if you want Passport Canada to securely destroy it, send a letter, a copy of the death certificate, and the expired passport to the address above.

Website:https://www.canada.ca/en/immigration-refugees-citizenship/services/canadian-passports/help-centre/general.html#passport_deceased

• • Veteran’s Affairs

Cancel any veteran’s benefits by contacting Service Canada or phoning 1-866-522-2122.

Website:http://www.veterans.gc.ca/eng/contact

• • Driver’s Licence

Cancel by phoning a local ICBC Driver Licensing Office.  In Kamloops, B.C., phone 250-851-3700.

Website:http://www.icbc.com/about-icbc/contact-us/Pages/default.aspx

• • Senior’s Supplement or disability benefits

Cancel any by contacting Service Canada or phoning 1-800-277-9914.

Website: https://www.canada.ca/en/contact.html

• • Vehicle insurance

Cancel and obtain storage insurance by telephoning AutoPlan or the insurance broker.

• • Property Insurance

Obtain ‘vacancy’ insurance, if appropriate.

• • Credit Cards

Contact credit card companies to cancel credit cards (and halt interest accruing if possible).

• • Phone and Utility companies

Notify to change name on account and modify/cancel services if appropriate.

3. Tax Returns

As executor (the “personal representative” of the deceased), you are responsible for filing a return for the deceased for the year of death. This return is called the T1 Final return.  You also have to file any returns for previous years that the deceased person did not file.

You must also file a T3 Trust Income Tax and Information Return, for income that the estate earned after the date of death, and for any trust created by the Will.

In all cases you are well advised to obtain a Clearance Certificate from CRA before making a final distribution of estate assets.

Website:http://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/clrnc-eng.html

4. Probate the Will or obtain a Grant of Administration (if no Will)

Probating an estate may or may not be necessary, depending on the nature of assets the deceased held at death.  The probate process involves obtaining an Administration Grant (i.e. the Grant of Probate) recognizing the person appointed in the Will as the executor, or, in cases where there is no Will, appointing a person as Administrator of the estate.   Executors and Administrators are now referred to as “Personal Representatives”.

After the Grant has been obtained, the Personal Representatives may call in (sell) estate assets, pay debts (including testamentary expenses, income tax and executor fees), pay legacies (gifts) and distribute assets to the beneficiaries of the Will (or according to the inheritance rules of the Province of British Columbia, in cases where there is no Will).

Lawyers frequently offer assistance to Personal Representative with the following estate administration tasks:

1. 1. 1. 1. drafting and filing the court documents necessary to obtain the Grant of Probate or Administration;
         2. selling land or removing deceased’s name from title to land where there is a surviving joint tenant;
         3. advertising for creditors;
         4. determining validity of claims against the Estate;
         5. preparing financial statements and obtaining approval by the beneficiaries; and
         6. obtaining Releases signed by the beneficiaries releasing the executor of Administrator from liability.

Executors are personally liable to the beneficiaries for their dealings with the estate.

Regardless of how diligent or competent the Personal Representative is, estate law is complex.  Particularly if the estate involves blended families, estranged children, multiple beneficiaries, unusual or multiple assets, business interests, complex taxation issues, foreign property or beneficiaries, or minor beneficiaries, executors are well advised to retain an estate lawyer to advise them of the complexities and the law.   The legal fees are paid for by the estate and the lawyer’s assistance can streamline the process and provide assurances to the executor and beneficiaries that the estate is being handled in a proper, legal and efficient manner.

If you have questions about the probate process, for help determining whether probate will be needed, or help determining whether you should hire an estates lawyer, contact our office to arrange a consultation with an estates lawyer.

For more information, see our Fulton Wills & Estates Team page. We’re here to help.

The laws in British Columbia regarding wills changed dramatically in March of 2014, when the new Wills, Estates and Succession Act (“WESA”) came into force. One of the most significant changes is in section 58 of WESA.

Prior to section 58, the law recognized as valid only those wills that were executed in perfect compliance with the various requirements, including that two witnesses be present when the testator signs the will, etc…. There was no room for the Court to declare a will to be valid that did not comply with all the requirements, even where it was clear that the person making the document intended it to be his or her final will.

Section 58 of WESA now permits the Court to fix or cure technical defects in testamentary documents (i.e. documents that appear to be “will-like” in nature).

This new power will have a significant (and welcome) impact where the circumstances make it clear that the will-maker intended to make a new will, but some hiccup in the process (such as a witness wandering out of the room at the wrong time) resulted in the will being technically invalid. In those cases, we expect that the Courts will now forgive the technical defect and uphold the document as a valid will.

In more ambiguous circumstances, however, the curative powers of section 58 may complicate the probate process. The classic situation is where a person jots down an informal will on the back of a napkin. In the digital age, however, the potential for these types of wills is endless – text messages, emails, draft “new wills” saved on a computer or smart phone, and so on.

Because of section 58, the executor of that person’s estate will now have to search for and bring to the attention of the Court such text messages, electronic documents, or notes, and perhaps have a full hearing in front of a judge, leading to considerable extra cost.

Legal and financial professionals should be aware of section 58 of WESA and advise their clients to be very careful about creating any documentation that tends to alter what is in their existing wills. If they do wish to make a “draft” new will or something along those lines, it is paramount that they make their intentions 100% clear – scrawl “DRAFT” on every page if it is still a draft, and get it properly witnessed if it is now a finished product.

In a recent court case in BC, a factually untrue, written explanation by a Will-maker for disinheriting a family member proved inaccurate and was ultimately ignored by the Court.

We have previously discussed Wills Variation generally  but to briefly summarize, in BC, biological children and spouses have the right to challenge a Will, asking the court to grant them a greater share of the estate, on the basis that the Will made inadequate provision for them.

In this bulletin, we address two specific questions clients often ask us about the variation of Wills:

• “Do my reasons for disinheriting this person matter?”
• “Is it a good idea to write down my reasons for disinheriting this person?”

Lawyers often recommend such a “Wills Variation Memorandum” (which we refer to as a “Memo”), because, if done correctly, a Memo can be an effective means by which the Will-maker can tell their story “from the grave”.

There are four key things to know about such Memos:

Memos are Not Essential

The Courts can uphold a disinheritance even if there is no written explanation, if there is other evidence to show that the Will-maker had sufficient grounds for the disinheritance. For instance, if there was family testimony or bank records to demonstrate that the disinherited child had already received substantial assets from the Will-maker before the Will-maker died, then the disinheritance would likely be upheld – this being the case despite that there was no direct evidence (such as a written memo) from the Will-maker.

Memos May be Helpful

The Memo is helpful to demonstrate that the reasons for disinheritance are valid and reasonable, and to draw attention to a justification that might otherwise be forgotten. If the parent knows, for example, that his/her other children are unaware of past financial assistance given to the disinherited child, the parent could draw attention to this in a Memo.

Memos May be Ignored

A Memo can, however, be disregarded by the Court. The general rule is that the justification must be “valid and rational” to be considered by the Court. If it is not, the Court will likely not acknowledge the reasons given by the Will-maker, as happened in the recent case of Sharma v Sharma Estate 2016 BCSC 1397, where the justification given in that Memo was factually inaccurate.

In that case, the Will-maker made a Memo declaring that the disinheritance of two of the Will-maker’s three children was because they had already received “plenty of monies” during the Will-makers lifetime, while the third child had not.

The Court found that that Memo was factually incorrect. The third child had in fact received significant financial assistance from the Will-maker, while the two disinherited children had not received as much – and one of them had received nothing at all. As a result, the Court deemed the Memo invalid and disregarded it, reversed the disinheritance of the two children, and eventually split the Estate more or less evenly between the three children.

Memos May be Counterproductive

Sometimes, a Memo can be counterproductive because it may make the Court more, rather than less, likely to vary the Will. For instance, consider the scenario where the parent has several justifications for disinheritance, but only includes one of the justifications in his or her Memo. If it turns out that the sole reason in the Memo is not factually accurate, then the Court may ignore all of the other, potentially valid justifications, on the basis that “if the parent had considered these as factors as justifying a disinheritance, the parent would have mentioned those factors in the Memo”. In that sense, it is possible that making an incomplete Memo may be worse than making no Memo at all!

Conclusion

A Wills Variation memorandum can be a useful tool to explain and justify a disinheritance. However, it is not always necessary and, if not properly done, could even end up being counterproductive. If a Will-maker is considering a disinheritance, he or she should obtain advice from an experienced estate lawyer, and make sure that any Memo produced is accurate and comprehensive. In addition, it is important to update the Will, and/or the Memo, whenever circumstances change.

Since 2007 and the ground-breaking Supreme Court of Canada case of Pecore v. Pecore (“Pecore”), the Courts have decided many cases concerning assets held in joint tenancy, and have had a chance to “work through” some of the nuances and legal challenges presented in Pecore.

This article is intended for those professionals who are interested in learning more about the legal challenges presented by joint tenancy ownership. With a greater understanding of the challenges, we can help protect our clients, and their estates, from being the subject of Pecore-style litigation.

In particular, we will address the following issues:

1. Effect of the Pecore decision on joint tenancies;
2. Documenting intention at the time of transfer;
3. Documenting intention after the transfer;
4. Unexpected severance of joint tenancies;
5. Exposure of asset to creditors/claimants;
6. Tax treatment of jointly held assets; and
7. Ineffectiveness in attempting to avoid probate.

1. Effect of Pecore on Joint Tenancies

The Pecore decision changed the legal framework of how certain joint tenancies are treated. In particular, the decision focussed on gratuitous (i.e., given for free) transfers between a parent and an adult child, including transfers into joint tenancy. Post Pecore , it is no longer the case that simply putting an asset into “Joint With Right Of Survivorship” ownership status will ensure that the asset will pass to the surviving joint owner upon death of the original owner.

In fact, unless there is clear evidence to prove that the transferor (for this paper, we will refer to the transferor as the “parent”) intended the surviving joint owner (the child) to receive the asset, it will be considered part of the parent’s estate upon the parent’s death, and not the property of the surviving child. This is called the “presumption of resulting trust” and applies to all sorts of property, whether bank accounts, investments or land.^[1]

As a result, where the intention of creating joint ownership is to gift the asset upon death, that intention should be clearly documented, in order to rebut the presumption that would otherwise mandate the opposite result. This is where legal and financial advisors can play a key role in reducing the chance of a dispute over the asset once the parent has passed away.

2. Documenting Intention at the Time of Transfer

A legal advisor should be consulted prior to the transfer of an asset into joint names to ensure that the client’s intentions are clearly documented – either: 1) by way of letter or deed confirming a gift; or 2) by way of trust declaration confirming that the asset is not being gifted to the surviving joint owner, but instead is to be held in trust (often with the goal of probate avoidance) arrangement.

The Pecore decision highlighted the distinction between legal ownership vs. beneficial ownership. This distinction can be thought of as the difference between “who is on title” (legal ownership) vs. “who is the real owner” (beneficial ownership). Transfer of an asset into joint tenancy is a transfer of legal title to the asset, but as Pecore emphasized, may not be a transfer of beneficial ownership.

Instead, there could be as many as four possible intentions/outcomes with respect to the beneficial ownership of a jointly-owned asset:

• True trust, where both legal ownership and beneficial ownership are held in trust for the parent during the parent’s lifetime and, after death, for the parent’s estate and its beneficiaries (this is the scenario presumed by the presumption of resulting trust from Pecore , and is the default position if there is no evidence to the contrary).

Example: elderly mother adds her son to her bank accounts, so that the son can assist her with banking and managing finances, purely for convenience. When mother dies, she expects son to pay mother’s funeral and other bills, and then divide what remains equally among all the children, in the same manner as her Will distributes her other assets. In this example, the son holds money as a trustee, in trust for mother’s estate.

• Gift of the right of survivorship only, meaning that the child only holds bare legal title in trust for the parent until the parent’s death. The child’s beneficial ownership is delayed until the parent’s death, at which time the child takes full beneficial ownership by way of survivorship.

Example: elderly mother adds her son to her bank accounts, so that the son can assist her with banking and managing finances, purely for convenience during mother’s lifetime. But, when the mother dies, she intends that the son will keep what remains in the joint account for himself.

• Gift of the beneficial ownership of the asset (or a portion thereof) with immediate effect – in other words, true joint ownership.

Example: elderly mother adds her son to her bank accounts, intending for them to share the accounts, and, if son wanted, he could spend all the money in the accounts on himself. Regardless of who dies first, the survivor keeps what remains in the joint accounts for him/herself.

• Trust for others, where the child holds both legal ownership and beneficial ownership, on trust for the deceased during his or her lifetime and, after death, not for the deceased’s estate, but instead for others (which may, but does not have to, include the surviving joint owner).

Example: elderly mother’s Will leaves her entire estate to charity. Mother adds her son to her bank accounts, so that the son can assist her with banking and managing finances, purely for mother’s convenience. When mother dies, she expects son to pay mother’s funeral and other bills, and then divide what remains equally between the son and one other child, but does not want the funds from the account to be part of her estate.

The advisor ought to ensure that the documentation properly evidences the intention – it is not enough simply to say that the transfer is a gift, or that the asset is held in trust. If a gift, is it an immediate gift or is it a gift which is only intended to take effect on death (i.e. a gift of the right of survivorship)?^[2]  If a trust arrangement, is the trust intended to continue after death or to become a gift to the child at that time? And if the trust continues after death, who are the beneficiaries of it – the beneficiaries under the Will, or others?

Clients should consult with an estate lawyer to discuss these concepts, and obtain advice as to the best way of confirming their intentions on paper. Ideally, these consultations and the documentation of intention will happen before the transfer, but it can be possible to retroactively document these types of transfers.

3. Documenting Intention After the Transfer

A more difficult scenario, unfortunately all too common, arises when a person discloses the transfer to a legal or financial advisor only after the transfer is complete. In many cases, this occurs when the parent is obtaining banking or estate planning advice and mentions that certain asset(s) have been made joint with some other person, usually a child.

What kind of after-the-fact evidence can be produced to prove a previous intention? Pecore tells us that post-transfer evidence of intention can be considered, but that it must be closely scrutinized to ensure there has been no change in intention arising after the transfer.^[3] The requirement for careful scrutiny of such after-the-fact evidence can pose problems with attempting to document the intention of a previous transfer, especially where the co-owners no longer agree what the original intention was.

In McKendry v McKendry 2015 BCSC 2433 (“McKendry”), the mother had transferred property into joint names with her son, in January 2008. There was clear evidence that, when she added him to title, she intended that he hold his interest in trust for her only while she was alive, and that on her death he was to share the land with his siblings – it was not originally supposed to be a gift of the land to just him. She later changed her mind, and in December 2010 signed a document cancelling the trust arrangement, and stating that she now wanted the son alone to receive the land when she died, as a gift from her (he did not need to share with his siblings).

When the mother later died, and notwithstanding the signed document, the trial Court rejected the son’s argument that a true gift had been made. The Court found that the key was the mother’s intention in January 2008, and that evidence contemporaneous with the transfer indicated the mother’s original intent was that the son held the property in trust for the mother – it was not to be his. The subsequent evidence (the December 2010 document) indicated only that the mother had changed her intention afterwards, which the Court held to be insufficient. The Court also rejected the alternative argument that if the January 2008 gift were not a true gift, then it was perfected or turned into a true gift by the subsequent documents.

The son, unsatisfied with this outcome, appealed the decision to the B.C. Court of Appeal. The BCCA agreed with him and overturned the lower Court’s decision. The BCCA decided that the December 2010 document had the effect of gifting the right of survivorship in the property to the son, such that he would receive the beneficial interest upon her death. By first adding him as a joint tenant, and then signing the December 2010 document, the mother had done “everything necessary” to give the beneficial interest to the son.

The Court of Appeal decision is of significant assistance in permitting parties to revisit and document the intention of previous transfers, without having to take overly technical steps such as re-conveying the property or putting a gift under seal.

The McKendry case also demonstrates the importance of documenting the intention, even if the transfer has already occurred. After-the-fact documentation remains, however, merely a way to make the best of a bad situation – clearly documenting intention at the time of transfer is certainly preferable. This is particularly true where the intention was for the child to hold the property in trust for the parent (not a true gift). If the parent and child later become estranged, and the child takes the position that the transfer was a gift, then the child will obviously not voluntarily participate in any after-the-fact documentation and will surely take the position that such documentation is evidence only of a changed intention that the court can ignore.

This is how disputes arise.

These cases illustrate that this area of law is extraordinarily troublesome, and serve as good reasons why clients should be careful, get competent legal advice, and avoid using joint tenancies as a haphazard “inexpensive” method of estate planning.

4. Severance of Joint Tenancies

“Severance” is a separate challenge that exists with joint ownership.

Land

Joint tenancy (that is, a true joint tenancy with the right of survivorship) depends on the existence of “four unities”: time, title, interest and possession. The joint tenancy will be terminated or “severed” when any one of the four unities is broken. Prudent advisors must be aware of the consequences of the four unities when using joint tenancy as an estate planning tool.

Take, for instance, the classic case of an elderly parent transferring title to her home into joint tenancy with her adult child. For a true joint tenancy to exist, the fourth unity requires that the parent and child must each have the right to possession of the entire property.

However, if the parties’ expectation is that the parent would have sole possession of the home during her lifetime, then arguably there is no unity of possession and the ownership arrangement was either not a true joint tenancy, or had been severed by the destruction of the unity of “possession” and as such is in fact a tenancy in common. As a tenancy in common, the parent’s 50% interest in the home would pass through her Will on death and not directly to her child.

Bank Accounts

The application of the four unities to jointly held bank accounts can raise even more complicated issues, partly because either joint owner has the right to withdraw all of the funds. This makes it possible for a joint tenant to sever a joint tenancy over a bank account simply by removing the funds in it.

In another recent case, Zeligs v Janes, the mother had transferred title to her residence into joint tenancy with her daughter, intending that the property would pass to the daughter upon the mother’s death. The mother and daughter sold their jointly owned home and placed the sale proceeds in a joint account. The Court found that this sale did not sever the joint tenancy over the residence; however, the joint tenancy over the sale proceeds was severed when the daughter later withdrew the sale proceeds and deposited them into account in her own name.

As a result of the severance, the daughter no longer enjoyed the right of survivorship in respect to the sale proceeds and was only entitled to retain 50% of these on her mother’s death; the other 50% had to be repaid her mother’s estate.^[4] By her unilateral actions, the daughter had, unbeknownst to her, prejudiced herself and destroyed her own right as a joint owner to receive 100% of the sale proceeds upon her mother’s death.

The potential for an unexpected severance further strengthens our general advice to clients to avoid using joint tenancy simply as a blunt estate planning tool.

5. Exposure of Asset to Claimants

People who are interested in using joint tenancy ownership must also be cognizant of the risk that adding a child to title could expose that asset to the child’s creditors. If a creditor obtains judgment against the child, the creditor will likely search for assets and discover the jointly owned property, and register the judgment against it. At a minimum, this could complicate the parent’s later sale of the property, as the parent would either have to a) agree to pay the child’s debt out of the sale proceeds, or b) convince the creditor that the child actually has no beneficial interest in the property despite being on title, an explanation that creditors are not inclined to accept easily.

Another common way that jointly held property is exposed to claims against the child is in divorce proceedings, where the child’s spouse may take the position that the jointly held property is a “family asset” and subject to division. Even if this claim is not accurate, the child’s spouse can tie up title to the property by way of a certificate of pending litigation.

This complication (the potential for exposure of the jointly held property to the child’s creditors/claimants) is another reason why parents must document the intention behind a transfer. A properly drawn Trust Agreement, made before or contemporaneous to the transfer, can substantially reduce the parent’s risk.

6. Tax Treatment of Jointly Owned Assets

Other (often overlooked) aspect of placing assets into joint tenancy are the tax consequences of such transfers. The transfer of most real property into joint tenancy is a disposition of part of a capital asset, meaning that:

1. the transfer may trigger immediate capital gains tax payable by the parent on the portion of the property that was transferred to the child;
2. when the parent later sells the property, 1) the child may be liable for capital gains tax on the portion that was transferred to them; and 2) the parent may lose their principal residence capital gains tax exemption on the portion of the property transferred to the child.

For financial assets, a transfer to joint ownership may lead to income earned in an investment account being taxable in the child’s hands.

Without proper care, these potential tax implications of joint ownership can erode or even consume the savings hoped to achieve by avoiding probate fees as a result of the transfer. In some cases, the parent may instead find him or herself facing a significant capital gains tax bill, and adverse consequences on his or her lifestyle and retirement plan.

7. Ineffectiveness in attempting to avoid probate

As mentioned above, while the joint-tenancy approach is a popular “do it yourself” approach to estate planning, it can come with unintended consequences, and where it is done to avoid probate fees, this approach frequently backfires. Contrary to popular belief, holding a bank account or land in joint ownership with a child does not necessarily keep it out of probate when the parent dies. If it is the type of joint tenancy where:

1. the child holds the property in trust for the parent’s estate; and
2. there are any other assets that do require probate, such as another parcel of land, an expensive vehicle, or a large bank account; then,

the joint assets will have to be disclosed by the executor on probate and probate fees paid, because those assets still form part of the parent’s estate even though they were owned jointly.

As a result, the parent has exposed him/herself to the issues discussed above, perhaps for no benefit, because probate fees will not have been avoided.

Conclusion

Pecore and the cases that have followed it have created a transformation in the advice to be given about jointly held assets. Legal and financial advisors must pay close attention to their clients’ intentions to determine whether joint tenancy is an appropriate ownership structure, how to properly achieve the desired result, and to advise about the many potential pitfalls. The fact that this issue is one of the most frequently litigated estate-related issues in British Columbia underscores the importance of proper legal advice, whenever joint tenancies are used.

^[1] One caveat to this is that assets placed into joint tenancy with spouses, have the opposite presumption – the law presumes that there is a “real” joint tenancy, i.e. that the surviving spouse will take the asset free and clear upon death of the first. Again, this presumption can be defeated by contrary evidence.
^[2] Keep in mind that some of the most unfortunate resulting trust cases are those brought while the transferor is still living, where the transferor and transferee have had a falling out and now take differing views of the effect of the transfer, such as Bergen v Bergen 2012 BCCA 492.
^[3] In Pecore itself, post-transfer evidence was one of the key components of the Court’s ruling. The facts showed that the father had, after the transfer, made a new will without mentioning the transferred assets to his lawyer. This suggested that the father felt he had already dealt with the account outside of his Will, by intending that it would pass to his daughter automatically, as the surviving joint tenant.
^[4] One of the important concepts to come out of Zeligs is the notion that the sale proceeds could, as a “fund”, be subject to the four unities/severance analysis.

A person must be “of sound mind, memory and understanding” to be able to make a valid Will.

This means that the person must be sufficiently clear in his/her understanding and memory to know on his/her own, and in a general way:

1. The nature and extent of his/her property;
2. The persons who are the natural objects of his/her bounty;
3. The extent of what is being given to each beneficiary; and
4. The nature of the claims of others who are being excluded.

A person making a Will may be diagnosed with dementia, and still be able to have sufficient mental capacity to fulfill or to satisfy the test set out above. Even if the person suffering from dementia has delusions, that may not disqualify them as having sufficient capacity.

The relevant time in determining capacity is at the time that the instructions are given for the preparation of the Will. Even if a person’s dementia worsens prior to the signing of the Will, it can still be valid, as long as the individual knew that they were executing a Will for which they had previously given instructions.

As an advisor, questions of capacity can affect you in a number of ways:

• May call into question the instructions you are receiving from your client;
• If your client’s Will is later challenged as invalid due to incapacity, you may find yourself called to court as a witness to give evidence about your knowledge and impressions of the client’s understanding at the relevant time. Your notes and files may become critical forms of evidence;
• You may want to encourage your client to seek legal advice and assistance when preparing or revising their Will. The lawyer’s job is to assess capacity, and the lawyer’s evidence is often the deciding factor when courts make a finding on capacity.

A startling number of us will experience dementia or other neurodegenerative disorders, and most of us will need at least some help with our finances and personal/health matters as we age. When this occurs, there are several legal tools to ensure your needs are met and your wishes are carried out, but advanced preparation is required. In terms of medical and personal care, these tools include Representation Agreements, Advance Directives, Living Wills, and MOST agreements. In this article we analyze the various tools, to help you determine which one is right for you.

Representation Agreement

What is it, and when is it used?

A Representation Agreement (“RA”) is the most common and most comprehensive (if prepared by a lawyer) planning tool for incapacitation. You appoint one (or more) person(s) to be your “Representative” and to help you make, or make for you, health care and personal care decisions on your behalf.

Even if you don’t need a substitute decision-maker 100% of the time, the Representative has legal authority to help you make your own decisions and be involved in your care. The RA allows health care providers to disclose information about your health to your Representatives, and give them access to your records.

Essentially, your Representative becomes your proxy, and your advocate; this is an essential part when navigating our health care system.

What happens if you don’t have one?

In emergencies, a health care provider can provide emergency health care to you. In routine situations, however, a health care provider must first select and get consent from a “temporary substitute decision-maker” (“TSDM”). The TSDM is determined by a priority list set out by statute: spouse, child, parent, sibling, grandparent, grandchild, anyone else related by birth or adoption, close friend, and person immediately related by marriage. You can see that this could result in persons being involved in your health care against your wishes.

The TSDM has no authority to make decisions about your personal care. Personal care includes where you live/with whom; your religious/spiritual practices; your activities, hobbies, and whom you associate with. Without an RA, there is a void – no one can legally make these personal care decisions for you.

Common situations where RAs are recommended/especially useful:

• you are not comfortable with the statutory order of TSDM; in other words, where you have someone in your family/life whom you would absolutely not want to be involved. Don’t leave things to chance – make an RA to ensure they have no say;
• you want someone to be able to help or direct your personal care decisions, and not leave those untended to;
• for seniors who want to involve someone outside the family, or who don’t have a spouse or child;
• a second marriage/blended family where there could be a conflict between a new spouse and the biological children; and
• where there are strong religious or moral views on health care.

Advance Directives

Advance Directives were introduced in 2011 and allow individuals to leave binding instructions about specific types of health care that they accept or refuse. Used on its own, it is often ineffective; it is almost impossible to be specific enough about the type of care and the circumstances involved so as to allow a health care provider to confidently follow the Advance Directive.

An exception might be for something as simple and specific as “no blood products (blood transfusions), in any circumstances”.

The Advance Directive is only for medical treatment, so it leaves a deficiency in regards to personal care.

If you make an Advance Directive, it is highly recommended that you pair this with a Representation Agreement. Then, if the heath care provider determines that the Advance Directive cannot be followed (because it doesn’t perfectly fit to the circumstances at hand), your Representative can provide binding consent or refusal of treatment on your behalf, using the contents of the Advance Directive as a guide.

Living Will

A Living Will is a form of Advance Directive. It states your basic wishes about end-of-life treatment. It can be considered and should be followed at the time of your death. Again, they mostly serve as a guide, not a binding direction, because there are so many variables that it is virtually impossible to adequately express them all. Living Wills are very useful, however, to give your next of kin / family members a general idea of your values and wishes. The spectrum of end of life decisions can vary so greatly, from “do everything medically possible to keep me alive at all costs, no matter my quality of life”, to “I wish to be allowed to die naturally, without interference, and I want pain control even if it hastens my death”, that having a general sense of where you fall on the spectrum is incredibly helpful for your family.

Medical Orders for Scope of Treatment (MOST) Agreements

MOST agreements are prepared by your physician based on your discussions with your health care team. They are reviewed with your physician at least once a year and are stored in your electronic health record. These agreements tell your health care providers which level of care and intervention to provide to you. This option is best for adults with advancing illness or a chronic condition that is life-limiting or life-threatening.

We can help you determine which planning tool is best for you. Contact our Wills & Estates team to get started.

A New Challenge for Estate Advisors

When BC’s estate laws changed in 2014, one of the more interesting changes was the addition of what is often called a “curative power”. This refers to the power for the Court to “cure” a Will that is not formally valid, but still appears to represent the intention of the will-maker. This is section 58 of the Wills, Estates and Succession Act.

Since the change, there have been several Court decisions that have allowed us to understand better the advantages and disadvantages of the curative proviso – and provided some practical advice to avoid the disadvantages.

The greatest advantage of the curative proviso is that it can avoid technical defects that can – in some cases, absurdly – make a Will invalid.

An example of such a technical defect would be where one of the two required witnesses has briefly left the room at the time that the will-maker signs the Will, but where it is otherwise abundantly clear that the Will represents the will-maker’s intentions. Under the old rules, this Will would be invalid, but the curative proviso allows the Court to “cure it” and make it valid.

On the other hand, the main disadvantage of the curative proviso is that it tends to create more litigation (and therefore more expense) around Wills and quasi-Will documents.

Some of the “curative proviso” cases that our firm has been involved with include:

1. the deceased left, scattered around her home, notes concerning what would happen to her assets after her death, some of which were written on the back of receipts and grocery lists;
2. the deceased was advised by a friend to get a Will done because of the deceased’s risky behaviour, and the deceased then jotted down two notes on a piece of paper and had the friend witness his signature;
3. the deceased made handwritten changes to an existing lawyer-drawn Will, including a gift to a step-child who had recently come back into the deceased’s life, but did not have the alterations properly witnessed.

In our estates/probate practice we have seen many instances where the new law has increased legal expenses for estates. The new laws cause the following (costly) problem: sometimes there is no way to avoid the expensive court hearing, even if the parties agree on whether the new document should be cured. This is because a person applying for probate (i.e., an executor) must sign an affidavit stating that he/she has found no other/subsequent will or any document that might be construed to be a Will. If the executor cannot swear to this, then they have to bring to the Court’s attention any document that plausibly could be considered to represent the will-maker’s intention. The Court may then refuse to grant probate until there is a hearing on whether the document should be “cured”.

To reduce or minimize the potential for unnecessary litigation and related expenses to arise after a client’s death, we recommend practices such as the following:

1. Advise clients not to write down draft estate planning ideas – and if they do, they should mark the document accordingly – “DRAFT ONLY” or “NON BINDING THOUGHTS” for instance;
2. On the other hand, if the client wants the document to be taken as his/her Will, then the client should sign it and mark it accordingly – for instance, “I consider this to be my last Will” – and take immediate steps to have it properly witnessed.
3. If a client discusses estate planning with a professional advisor, the advisor should be sure to take good notes and to record the client’s intention – has the client decided that this is what she/he wants for sure, or are these just ideas that the client intends to consider further at a later date?

If there is one standout lesson to be gleaned from the case law and the hassles we have seen in our Estates/Probate practice, it is that clients should use estate lawyers to draft and update their Wills. A lawyer-drawn Will, that is properly witnessed, avoids costly headaches that a quasi-Will otherwise creates.