The Estate House

Why Determining Who Died First Can Be Important

By now, most people have heard about the tragedy of Chris Benoit.  The wrestler, who grew up in the Edmonton area, is believed to have killed his wife and young son before strangling himself this past June.   Unfortunately, despite having an estate worth several million dollars, neither Benoit or his wife had a will and now a dispute has emerged over who should properly inherit all of this property.

Nancy Benoit's mother, Maureen Toffoloni, has asked the court to determine the order of death.  This is because under Georgia succession laws, if the boy was killed before his mother, then her beneficiaries (i.e. Mrs. Toffoloni) would inherit the Benoit estate.  However, if Nancy was killed first, then the beneficiaries will be Benoit's two children from a previous  marriage, who live near Edmonton with their mother.

We recently had a case where death order was an issue.   A parent and child had been killed in the same accident and the parent did not have a will.  The Alberta Survivorship Act is set up to deal with situations where death order is uncertain.  Section 1 of that act says that where death order is uncertain, the older person is presumed to have died first.   Seems simple enough, doesn't it?

However, s. 2 goes on to refer to statutes that contain a "provision...for the disposition of property operative if a person designated in the statute... (a) dies before another person,.." It goes on to state that when the "designated person dies...in circumstances rendering it uncertain [whether the designated person survived another person], then, for the purpose of that disposition, the case for which the statute provides is deemed to have occurred."

The Alberta Court of Appeal considered the interplay between these provisions of the Survivorship Act and the Intestate Succession Act in Re Mandin Estate.  The Mandin Estate case was similar to the Benoit situation in that multiple murders had occurred, the order of death was uncertain, and competing family members were the potential beneficiaries.  Unlike the Benoits, the Mandins had a will, but there was a partial intestacy as all of the family members (except the murderer) had died and there was no provision for what was to happen to the Estate in that circumstance.   

In Mandin Estate, the Alberta Court of Appeal ruled that the Intestate Succession Act, as it provided for the distribution of property, was one of the statutes referred to in s. 2 of the Survivorship Act.  Applied to our fact situation, instead of the presumption that the child had survived the parent (a la s. 1), since the Intestate Succession Act provides for a case of what happens on the parent's death if the child does not survive her, it is deemed that the child did not survive.   Our application for a grant of administration was prepared based on this reasoning and the court agreed, as we received our grant just this week.

Of course, the easiest way to avoid these situations at all is to have a will with a proper beneficiary survivorship clause (i.e. Any beneficiary must survive me for at least 30 days or else he or she will have been deemed to have predeceased me).    That way it doesn't matter who died first, so long as it was within the 30 day period. 

Making Sure No One is Left Out

I received another phone call this week from an individual who is going to be left out of his step-parent's estate because she didn't take the time to get her will done properly. 

If someone dies without a will (or with an invalid will), their estate is distributed according to the provisions of the Intestate Succession Act.  Few people are aware that the law does not treat stepchildren the same as biological children for the purposes of this distribution.  Only biological children have a right to inherit from the deceased's estate.   This is true even if the deceased had more of a parental relationship with the stepchildren than with his biological children.   If the stepchildren were legally adopted by the deceased, then they are treated as biological children.

The policy behind this law is that, barring some recent exceptions as a result of assisted reproductive technology, every child has two parents.   Even if the child's parents are no longer together, there is an assumption that the child will benefit from each parents' estate.  To legislate that individuals will automatically have to provide for any stepchildren  disregards the dynamic that is present in many blended family situations where the other biological parent is very much part of the picture and where the stepparent/stepchild relationship is cordial, but neither party believes that it is like the traditional parent/child relationship.

If a stepparent wants their stepchildren to inherit from their estate, they must have a proper will in place in order to do so.    

Re: One to Watch

The March 2, 2007 edition of The Lawyers Weekly says that Jane & John Doe, who you'll recall asked the Alberta Court of Appeal for a declaration that John had no parental rights vis a vis Jane's child, have asked for leave to appeal to the Supreme Court. 

Intestacy & Obligations to Stepchildren

In my March 2 post, I suggested that legislators (and perhaps the courts) need to address the issue of having stepchildren inherit from an intestate estate, but only in those circumstances where the deceased stood in loco parentis.  After receiving some comments from my one  of my colleagues at The Estate House, Douglas Gorman, I feel that I should clarify my position.

The public policy reasons behind the current legislation are sound.   Stepchildren presumably have two biological parents from whom they can inherit.   Furthermore, it is not uncommon nowadays for a child to have more than one step-parent.   Right now, if you would like your stepchildren to inherit from you, you must state so explicitly in your will.  Otherwise, the stepchildren are out of luck.

I am in full support of any legislation that encourages people to have a will properly drawn up.  However, in this circumstance it's often children who pay the price.  Not only that, they're children who usually have had one parent abandon them already.     Perhaps instead of changing the Intestate Succession Act, we could give children under the age of 18 to whom the deceased stood in loco parentis to the explicit ability to make a claim under the Dependents Relief Act.  Basically, the rule could be that if the deceased would have been obligated to provide child support if he and the child's mother separated the day before he died, then his estate should bear that same obligation.

Now, discuss!

One to Watch

Every once in awhile a family law case will capture my interest, particularly when it deals with support obligations that may have an eventual impact on the administration of someone's estate.  Doe v. Alberta 2007 ABCA 50 is one of those cases.  It was decided by the Court of Appeal on February 13, 2007. 

The facts are thus:  Jane Doe & John Doe are in an unmarried relationship.  Jane wished to have a child, John did not.  In August 2005, Jane gave birth via artificial insemination from an unknown donor.  Jane and John are still together, but wish to enter into a written agreement that stipulates that John will have no legal obligations toward the child.  They brought an originating notice seeking a declaration that this agreement will bind them and any government authorities.  They also contend that if the Family Law Act does not allow such agreements, that it contravenes s. 7 of the Charter.  In short, John does not want to be a father and he does not want the government telling him that he is going to be considered one anyway.

Now under the Family Law Act, John would not be considered the father of the child.  He is not the biological father, nor did he consent in advance to be the father of a child that would not be biologically his own.   Section 48 says that a person is deemed to be standing in the place of a parent if he is in a relationship of some interdependence with the mother of the child and has demonstrated a settled intention to treat the child as his own child.  There is no question that he is a relationship of interdependence, but what about his intention?

The leading Supreme Court authority on the matter says that this inquiry is contextual and that while intention is relevant, it is not determinative.   The Alberta Court of Appeal ruled that while John may have expressed a "settled intention" not to parent this child, his relationship of interdependence will undoubtedly lead to him taking on a parental role.  Plus, it's how the child views the relationship, not vice versa.   

Basically, the Court of Appeal has said that if you become involved in a relationship of interdependence with someone who has children, even if they're not biologically yours, you may have an obligation to provide support to those children if the relationship ends.  Of course there are going to be a number of other factors to consider, but you aren't going to get out of providing support just because you don't want to and never did.

What I find interesting from an estate law perspective is how John's estate would have no obligation to provide support to Jane's child if he died.   Currently, an intestate's heirs are limited to his or her biological children.  Several times we have had to tell stepchildren that they are not legally entitled to any inheritance from their step-parent's estate, even if for all intents and purposes that was the only father/mother the child had known.  Unless they were legally adopted, they're out of luck, although it might be possible for a dependent child to bring a Dependent's Relief application against the estate of the step-parent.

If the courts are going to be stewards of the best interests of the child, then perhaps our intestacy legislation should be enhanced to include children to whom the deceased stood in loco parentis.  After all, if it was the intention of John not to provide support and he might have to anyway, surely it is the intention of many step-parents for their stepchildren to inherit from their estate, even if the law currently says otherwise.

Trusts & Estate Planning for Blended Families

As the traditional family structure evolves, so too does the toolbox of the average estate planning practitioner.  Estate lawyers are finding that they need to become more well-versed in family law statutes governing the distribution of property and maintenance.   One of the most common questions when dealing with a blended family situation is, "How can I make sure that my spouse will look after my children after I die, and not just change his/her Will and leave it all to their children?"  The answer we give most often at our firm is by using trusts.

My colleague at The Estate House, David Koski, recently co-authored a paper in the Estates and Trusts Journal with John Poyser of Inkster Christie Hughes in Winnipeg on the Use of Trusts in Blended Family Estate Planning.  David is going to be presenting on the topic tonight at the regular meeting of the Estate Planning Council of Edmonton.

The paper, of course, is too long to post here, although I promise that a link will be coming soon.

It generally works like this:  Spouse A leaves the residue of his estate in a spousal trust for Spouse B.  Spouse B and one other person are trustees of the spousal trust.  When Spouse B dies, the contents of the trust flow through into however many trusts as there are children in the blended family; each child will have their own trust.   For it to be a proper spousal trust, Spouse B must be entitled to all of the income generated by the trust during her lifetime, but the capital can be distributed upon her death.  Spouse A may want to limit Spouse B's ability to encroach on the capital to ensure that there will be some resources there to distribute to the children.

It's a common perception that trusts are only for rich people and that they are difficult to set up and to maintain.  While it is true that the greatest benefits (tax-wise) are experienced by trusts that have significant assets, trusts are useful for smaller sums as well, and are neither difficult to set up nor to maintain.    I should also note that, depending on how the trusts are set up in your will, the trust may be fairly easy to wind-up.   

The trust scenario gives parents peace of mind that their children will be taken care of well after that parent is gone, and isn't that what proper estate planning is all about?   

James Brown Burial Watch: Day 43

That's right.  43 days after his death on Christmas Day and James Brown is still not buried.  As I had mentioned in an earlier post, his burial is one of a myriad of issues that is being affected by a dispute between the singer's children, his trustees (one of whom is his lawyer), and his (alleged) widow.

It's complicated, but it shakes down like this:

First, most of James Brown's assets (i.e. his home, intellectual property, etc.) were put into a trust while he was still alive, in what's called an Inter Vivos trust.  That means that his will, which divided his property among six of his children, only dealt with personal possessions.  Those possessions, as I understand it, have been divided as requested.

Second, the children are disputing how the trustees are administering this trust.  They are alleging all kinds of fraud and have made an application to have the trustees removed.  This application will be heard on February 9 (this Friday).

Third, James Brown's wife, Tomi-Rae Hynie, is saying that she should be entitled to part of the singer's estate.  The trustees and James Brown's older children are arguing that the Brown-Hynie marriage was invalid, meaning she is entitled to nothing.  The son of James Brown and Tomi-Rae Hynie was left out of James Brown's will, as he was not specifically named.  At the very least, Ms. Hynie would like to get back into the home she shared with Brown to retrieve her personal possessions.  The house/crypt is included in the contents of the trust and the trustees have so far refused her access.  She has also made an application, which is scheduled to be heard at the same time as the one above.

In short, quite a mess.  Of course, an update will follow the February 9 application.   

If you needed another reason....

People in Edmonton were shocked over the weekend to hear about a 3-year-old boy who was beaten and subsequently died in hospital.  While this in itself is a tragic tale, adding to the distress is the fact that this boy was allegedly beaten by his foster mother.  She has been charged with 2nd-degree murder.  It has not been reported how this young child ended up in foster care.

For our clients with young families, designating a guardian for their minor children is usually the reason why they come to see us in the first place.  Since the new Family Law Act came into effect in 2005, testamentary guardianship appointments are valid without having to first obtain a guardianship order from the court, so long as the appointed guardian acts as guardian, either expressly or impliedly.   This provides a signficant degree of comfort to parents, who (assuming that they have chosen their guardian well) can rest knowing that their children will not be further traumatized by a custody dispute.  As a bit of a qualifier, parents can only give the guardianship rights that they have, so if they are currently subject to a parenting order the appointed guardian will only inherit those rights that the deceased parent had in the parenting order.

So how does this relate to foster care?  Well if a parent dies without appointing a testamentary guardian, their children may be subject to a custody dispute between warring family members, or even close family friends.   A biological parent without custody may come back to assert his or her parental rights if the custodial parent dies without addressing guardianship in a will.  In cases where children are subject to such disputes and where a known, neutral third-party cannot be found, those children may well be placed in foster care until the dispute is settled.  How many parents would choose that scenario for their children?   

I would like to end this post by saying that while this particular foster parent proved to be a worst-case scenario, most foster parents should be applauded for the work that they do.  It's a tough job and it's not for everyone, but we need more people to do it.