Fire’s burning, fire’s burning…


Written on April 23, 2015 – 5:18 am | by Elaine Blades

Last week Rachel Blumenfeld and I had the pleasure of co-chairing an informative, interesting and entertaining session on cottage succession planning. The presentation was part of the STEP Canada Passport series.

Our presenters were Gwen Benjamin, an estate planning specialist with Wilson Vukelich LLP and Justin de Vries, Principal of de Vries litigation (not to mention founder of this blog). With a planner and litigator on hand, the stage was set for a lively to and fro session.

Gwen began by separating the options into “at death” and “during lifetime”. Gwen then described the choices available under each heading. The “at death” techniques discussed, included:

  • leaving the disposition of the cottage to the discretion of the executor(s)
  • directing that the cottage be sold by the executor(s)
  • gifting the cottage to one or more children
  • creating a trust for the cottage + a maintenance fund
  • donating the cottage to a charity approved by the Minister of the Environment

Additional options canvassed under the “during lifetime” heading included: transferring to a not-for-profit corporation and gifting the residual interest to a child or children while retaining a life interest.

Gwen went to great lengths to explain the technical nuances of the various planning options while outlining the inherent pros and cons of each.  Notwithstanding, it seemed Justin had a case or story to undermine pretty much every option.  For example, Justin pointed out:

  • the myriad of problems that can accompany shared ownership
  • the difficulty in establishing a viable maintenance fund
  • the issues inherent in valuing a cottage
  • what can happen when a failed marriage and irrevocable trust collide
  • the pitfalls of the bidding process:  “It is difficult to think of a bidding process that does not alienate at least one child”
  • how wild cards such as proprietary estoppel, dependant support and constructive trust claims can muddy the lake waters

Justin reminded us that these problems are often compounded by the fact that there may not be a “reservoir of love” among the siblings.

The session ended on a more positive and constructive note as Gwen and Justin offered tips for avoiding litigation.  Advisors should encourage clients to:  

  • discuss plans with their children; talk early and talk often  
  • be realistic 
  • give serious thought to the various options (including selling the cottage to a third party)
  • develop a comprehensive plan

Thanks to Gwen and Justin for an informative and thought-provoking session!

p.s.   To see what the “Estate Planning Board of Canada” (by way of This Hour has 22 Minutes) has to say about cottage succession planning, click here.

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    CARTER v CANADA: ARE PHYSICIANS UP TO THE TASK?


    Written on April 22, 2015 – 6:00 am | by Ken Shulman

    In their recent decision banning the prohibition of physician-assisted suicide, the Supreme Court of Canada addressed the risks for “decisionally vulnerable” patients who might end up dead “without a rational and considered desire for death”.  This could apply to a wide range of psychologically vulnerable individuals with cognitive impairment, mood disorders and other psychiatric disturbances who could also be subjected to undue influence.

    The Supreme Court agreed with the trial Judge’s conclusion that the “risks are already part and parcel of our medical system and…that it is possible for properly qualified physicians with due care and attention to the seriousness of the decision involved, to adequately assess decisional capacity…..and these risks can be limited through a carefully designed and monitored system of safeguards”.  Medical regulatory authorities (ie.- Colleges of Physicians and Surgeons) together with Parliament and provincial legislatures have less than a year to develop the relevant policies and guidelines.  It remains to be seen how medical authorities and physicians themselves will respond to the Supreme Court decision. Which physicians will be qualified to make such determinations? What training and education will be necessary? Is this really the same as other consent to treatment determinations under the Health Care Consent Act (HCCA)? How do Attorneys for Personal Care act on previously expressed wishes in this regard?

    There are several clinical factors that can lead to suicidal thinking that must be assessed to ensure that the person contemplating physician assisted death is indeed competent, fully informed and not unduly influenced.  Moreover, the threshold for capacity will be raised, due to the seriousness of the decision to end one’s life.  What of the role of clinical depression that is not infrequently co-morbid with the same “grievous and irremediable medical conditions”? At what point does chronic intractable Depression meet the criteria? How physicians will approach their new role and what standards and safeguards will be put in place will be a critical aspect of the Carter v Canada decision.  We all have a stake in the outcome of these deliberations. This will be the new reality for what may be a small but critically important group of individuals. The devil will be in the details.

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      Contracting Out of Care Costs


      Written on April 21, 2015 – 9:49 am | by Gillian Fournie

      A common theme in this blog is that caring for your aging spouse may be difficult and stressful without a support network. When the “healthy” spouse is too old and fragile to provide care, additional support or alternate accommodations for the ailing spouse must be found. Unfortunately, when one 80-year old wife made it clear to her children and step-children that she was not able to care for her ailing husband, she found herself the centre of a lawsuit.

      Max and Cynthia were married in their late 60s. It was the second marriage for both. Each had four adult children from their previous marriages. When they married, they entered into a marriage contract. They provided each other with full financial disclosure and had the benefit of legal advice. Their mutual intention, as set out in the marriage contract, was to maintain complete financial independence, including no equalization or spousal support on death or separation. On death, their individual property was to pass to their respective children. Importantly, the marriage contract also contained a clause that each spouse would pay for his or her own nursing and health care expenses.

      Max grew ill, and Cynthia cared for him for seven years at home. Eventually Max’s illness meant he was admitted to hospital, then a rehabilitation centre. When Max’s health improved somewhat, he looked to return home. Cynthia, who was now 80 and feeling frail, explained that she could not provide Max with proper care. It was decided, on the recommendation of Max’s doctors, that he would be moved into a long-term care facility. Shortly thereafter, Cynthia and Max were divorced.

      Max’s son, acting as litigation guardian and, following Max’s death, on behalf of Max’s estate, sued Cynthia for unlawful refusal to allow Max to return to his matrimonial home. The amount of damages claimed were the costs of the nursing care and medical expenses.

      Max’s claim was dismissed on summary judgment. The motion judge found that Cynthia did not refuse Max entry to the matrimonial home, so there was no genuine issue for trial. Because Cynthia had made an offer to settle prior to the motion, which was refused, Cynthia was awarded substantial indemnity costs in the amount of $45,000. Max appealed.

      The court of appeal upheld the motion’s judge’s decision (Warshafsky v. Gasner). The court found that Cynthia did not refuse to allow Max to reside in their home per se, she only indicated that her own frail health meant she could not adequately care for him. The court found that Max (or Max’s children) never brought forward a plan to provide Max with appropriate at-home care which would have made it possible for him to return home safely. In addition, Max’s children (with the exception of Max’s son, who was acting as litigation guardian) had agreed with the recommendation of the staff at the rehabilitation centre that Max would be best cared for at a long-term care facility.

      Given the above, the court of appeal upheld the motion judge’s decision and dismissed the appeal. The court further noted that, in any event, the claim for medical and nursing expenses was barred by the marriage contract.

      This is an example of how a marriage contract can be of assistance when litigation arises. When the parties entered into the marriage contract, their wishes were expressed clearly and comprehensively. They entered into the contract openly and in good faith. Although litigation cannot always be avoided, the marriage contract helped bring the matter to a speedy resolution on summary judgment, keeping costs contained.

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