David Bowie’s Will

According to reports, aside from what appear to be a couple of generous bequests (what is Possum Inc.?), David Bowie, or should I say David Robert Jones, has left most of his real estate and 50% of the residue of his estate to his wife Iman.  25% of the residue will go to each of his two children (one real estate property goes to David and Iman’s daughter).  I suggest litigation should be unlikely with this division but …

Here is The Guardian’s story.

Here is the New York Post’s story.

Bowie fans will know that he took the stage name “Bowie” because in the early years another Brit named David Jones was enjoying great (if fleeting) fame with The Monkees.

Why Lawyers Draft Wills

A recent Ontario case is a good reminder of why preparing a will is best left to a competent lawyer.

In Budai v. Milton, the testator clearly wanted a no-nonsense approach to how his failing health and his estate were dealt with.  He had a will prepared by a retired financial planner, who also happened to be named as executrix of the estate.  The proposed executor was in all likelihood an excellent financial planner, but was found lacking in legal skills.

The will named one beneficiary, the applicant (defined in the will as a paid caregiver) and contained the following clauses:

6.1      Should my beneficiary, Kathy Budai challenge this Will or my choice of Executrix in any way then she will be removed from the Will and not inherit anything.

6.3      Should the estate have holdings due to my beneficiary not honouring my final wishes to pass away without any further efforts to prolong my life then the Executrix shall be in the control of distribution of the Estate.  She may give away the funds in any way she sees fit.  She may invest the balance of the Estate and use it for donations or any other purpose as long as the funds last.  There are no restrictions to what she may do with the balance of the Estate.

With respect to clause 6.1, the applicant took the position that it should be struck out as contrary to public policy on the basis of the in terrorem doctrine.  That doctrine can be invoked to strike a portion of a will where three criteria are satisfied, namely;

(a)   the legacy must be of personal property or blended personal and real property;

(b)   the condition must be either a restraint on marriage or one which forbids the donee to dispute the will; and

(c)   the “threat” must be “idle.”

The court found that these criteria had been satisfied. A bald prohibition to challenging the will “in any way” offended the doctrine.  Determining whether a threat is “idle” requires an examination of whether the threat is “imposed solely to prevent the donee from undertaking that which the condition forbids”.  Bare forfeiture of a gift is therefore considered an idle threat.

While the court found paragraph 6.3 to be valid, despite several claims of uncertainty, it did note that the ability of the executor to disburse funds in any way she sees fit to be suspicious. The proposed executor was also the drafter of the will and had the ability under that clause to disburse the estate to herself if the applicant was disinherited.  However, while the Court was willing to consider that suspicion may be a factor in determining whether a will as a whole is valid (an example would be suspicion contributing to a finding of undue influence), it was not satisfied that there was authority to hold that suspicious circumstances may be used to strike only a single provision in a will, leaving the remainder of the will valid.

Beware the “Pour-over Clause”

The formal requirements for a valid will can pose problems when testators seek to incorporate by reference other documents into a will. This is especially problematic where the document intended to be incorporated is changed after the date of the will. This was the issue in a recent British Columbia case.

In Kellogg Estate v. Kellogg, the Court was dealing with what is referred to as a “pour-over” clause. The purpose of the clause was to make a gift under a will to an existing trust. A husband and wife established a family trust for estate planning purposes with their three children as the primary beneficiaries. The trust included a provision that upon the death of the survivor of the husband and wife, the primary beneficiaries were to receive equal shares in the balance; one half distributed on the surviving parent’s death and one half five years later.

The husband and wife both executed wills dated the same date as the trust. Their wills included a bequest of the residue of their respective estates to the trust, to be administered in accordance with the trust, “including any amendments thereto made before my death”. The Wills also included a clause stating that if a bequest to the trust was invalid, the residue of the respective estates were to be managed and distributed under the terms of the trust as it existed immediately prior to its determination of invalidity and incorporated the trust by reference into the will.

Subsequent to the execution of the wills, the parents amended the trust, the primary change being the removal of one child as a beneficiary.

The issue for the Court was whether, firstly, incorporation of the trust into the wills of the parents generally was valid and, secondly, whether the subsequent amendment to the trust was likewise incorporated into the wills.

The Court conducted a review of the relevant law of incorporation into a will. It concluded that incorporation of a document into a will is valid if (1) the document is in existence at the time the will is made and (2) the document is beyond doubt the document referred to. The Court found that the original trust met this test and could properly be incorporated into the parents’ wills.

As for the amendment though, because it post-dated the wills, it did not meet the test for incorporation. As a result, it could only have testamentary effect if it met the requirements of the B.C. Wills Act, in particular the requirement for two witnesses (s. 4 of the Succession Law Reform Act in Ontario). The trust amendment was not witnessed.

But what of that part of the incorporation provision in the wills stating, “including any amendments thereto made before my death”. This provision was not effective to include the amendment as a testator may not reserve the ability to make gifts upon death after the date of the will without complying with the requirements of the Wills Act.

The effect of the decision is that the residue of the estates was a valid bequest to the trust as it existed before the amendment; i.e. with all three children as beneficiaries.

This decision underlies the need to always keep in mind the formality requirements for documents intended to have testamentary effect.

A forged will and a fort?

This is an estate dispute for the ages.

http://www.thestar.com/news/world/2013/07/29/princesses_in_north_india_become_owners_of_palaces_vast_fortune_after_court_verdict.html

A Public Debate Over the Wisdom of Gandolfini’s Will

I am always amazed at the attention that a celebrity’s will can garner. On the bright side, it draws attention to the need for good estate planning – whether you are Tony Soprano or John Q. Public.

http://business.financialpost.com/2013/07/22/a-public-debate-over-the-wisdom-of-gandolfinis-will/

Here is a situation begging for a will challenge

http://news.nationalpost.com/2013/06/27/robert-mccorkells-1m-estate-bequeathed-to-neo-nazi-national-alliance/

Say What You Mean in Your Will – Because a Court Probably Won’t be Able to Figure it Out for You

Happy New Year!

The necessity for a testator to clearly set out his or her intentions in a will is trite.  As a recent Nova Scotia case points out, if a will does not properly deal with the distribution of assets and the intention of the testator is otherwise unclear, the Courts will not “re-write” a will by inferring how the testator intended to deal with such assets.

In Re Das Estate, the testator devised most of his estate to his wife in trust for her own use in her sole and unfettered discretion.  There was a notable exception though.  An investment account worth almost $1 million was not included in the devise to the wife.  The only provision in the will for that account was that, should the wife not survive the testator by 10 days, the balance of the estate (after a devise to his daughter which again excluded the investment account) was to be distributed to various educational institutions and charities.  The wife did survive the testator by more than 10 days.  So what of the investment account?  On a motion for directions, the Court was asked how it should be disposed of.  Could the Court determine from the will and any admissible extrinsic evidence how the testator intended to deal with the account?  Did he mean to leave it to the wife? – the daughter? – the charities?  Is there an intestacy with respect to the account?

The Court went through the process of determining when it can and cannot determine the intention of a testator for the purpose of interpreting a will.  Known as the “armchair rule” of interpretation (because it requires the Court to put itself in the position of the testator), the rule has two requirements:

“The first is that the court must be satisfied that there has been an inaccurate expression by the testator of his intention, and the second is that it must be clear what words the testator had in mind at the time when he made the apparent error which appears in the will.”

The Court appears to have been satisfied that there was an inaccurate expression by the testator of his intentions concerning the investment account but ultimately found that there was insufficient evidence to determine what his intentions were and any inference by the Court would be nothing more than speculation.  Unless there is some indication from other portions of the will or reliable extrinsic evidence as to what was intended, the Court will not infer an intention.  While the Court did find that reliance on extrinsic evidence has been expanded to allow its use outside of situations of patent ambiguity in a will, it was not able to find evidence in this case that would indicate upon which of various potential beneficiaries the testator wished to bestow the investment account.  The result is that, despite the general rule that Courts should strive to avoid an intestacy, the judge here found he had no other choice but to declare an intestacy with respect to the investment account, resulting in it passing to the wife and daughter and leaving the charities out.

I would include a moral here but I think that my intention can be reasonably inferred.