Will Substitutes

Question 1

Why do people use will substitutes?

Answer 1

Need to probate things like real property, can be expensive

Question 2

Inter vivos gifts

Answer 2

Comply with 3 common law rules: intention, acceptance, delivery

Question 3

Giftos mortis causa

Answer 3

• Death bed gifts, gifts made in contemplation of death given on death.
• Very hard to prove.
• Delivery standard more relaxed.
• Revocable til donor loses capacity
• Automatically revocable if recovers

Question 4

Deeds and inter vivos trusts

Answer 4

• When conveying real property has to be done via deed, a piece of paper that looks like a will.
• “Grant conveys to A for life and then to B in fee simple”
• Once formally executed grantor loses all interest
• Grant= inter vivos gift

Question 5

Contrast deed with will

Answer 5

• Deed, once executed it vests. Will, once executed does not vest til they die.
• Deed irrevocable once perfected, will revocable til death

Question 6

What are the parties in a trust

Answer 6

• Settler (initial owner)
• Trustee (person with whom legal ownership rests)
• Beneficiary (equitable interest, trustee holds for their benefit_

Question 7

Tenancy in common

Answer 7

Each tenant owns their respective half, and when one dies, their half goes to their estate. (law presumes this)

Question 8

Joint tenancy

Answer 8

When one of the JTs dies, the deceased’s ownership interest passes to the other owner immediately upon death, very effective will substitute. There’s no probate fees or capital gains taxes, and it doesn’t go to the state.

Question 9

Joint bank accounts

Answer 9

Presume right of survivorship

Question 10

Hansen Est v Hansen

Answer 10

Facts: married couple negotiating divorce, man dies before finalized. Wife claims house they owned in JT that man left to daughters his portion in will. Had to prove JT had been severed

Ratio: a will can’t sever, have to prove it was before he died. Ways to sever: convey your interest, mutual agreement, or by course of dealings

Question 11

Resulting Trust

Answer 11

• People take as JTs, even though only one party has invested in the property.
• While legally the law of survivorship has operated you are presumed to be holding a portion of that in trust for their inheritants

Question 12

Resulting trust is a…

Answer 12

Presumption that can be rebutted

Question 13

When does presumption of resulting trust occur?

Answer 13

• When person gratuitously places someone else on title with them (other JT did not contribute)
• Business partners have this presumption
• Anyone who is not related

Question 14

Exception for married spouses for resulting trust

Answer 14

For legally married spouses, the presumption will NOT apply. The policy rationale being that people want to provide for their spouses.

Question 15

Pecore v Pecore (Bank Accounts)

Answer 15

• Gratuitous transfers with adult children= presumption of resulting trust
• Minor children= presumption of advancement
• Look at surrounding factors to determine if presumption can be rebutted.

Question 16

Presumption of Advancement

Answer 16

• Flip side of resulting trust

- Presumes that the gratuitous transfer was a gift, you were intended to have title to it in both law and equity.

Question 17

Any property not mentioned in a will is

Answer 17

Residue

Question 18

Jansen v Neils Estate

Answer 18

To rebut MJ’s argument, IN & R proved that T intended to gift the property to them. The codicil made it clear that T didn’t want the property to be part of the estate. T also actively made a JT w/ R & IN upon buying the property. T had sound legal advice. R & IN were successful.

Question 19

What happens if estate is beneficiary of life insurance?

Answer 19

• Vulnerable to creditors

- Make beneficiary someone other than estate for this reason

Question 20

Retirement plan beneficiaries act

Answer 20

Takes rules from insurance delegations and applies them to all manners of retirement plans and things like insurance

Question 21

How to designate someone as beneficiary for insurance?

Answer 21

• Through plan itself

- Through will but have to identify the plan

Question 22

What if you named them beneficiary of insurance in will but will deemed invalid?

Answer 22

Designation still stands if properly designated

Question 23

How to revoke designation in first will?

Answer 23

1) A change in the plan itself
2) A new will (automatically revokes previous wills)
3) Express revocation of entire will

Question 24

Revocation of a designation by instrument only

Answer 24

If the initial designation was done on the plan you can revoke that through the will (have to specifically identify)

Question 25

Does revocation of a designation in a will serve to revive prior revocation?

Answer 25

No, does not revive designation in insurance plan

Question 26

How to override designation in valid insurance policy?

Answer 26

New will has to specify the plan and the designation that it is revoking sufficiently

Question 27

What about if will is designating a policy in first instance?

Answer 27

It needs to at least generally identify what the plan is (see that they are making the designation in the will)

Question 28

When trying to figure out what policy governs estate as yourself a few questions (arises with more than one designation generally)

Answer 28

o First: where is the designation? (Will? Policy?) o If in both: when were designations made? First? Last?—even if something came subsequently may not be enough depending on where it is *most recent is usually the one we follow but can be more complex/trickier than that

Question 29

Laczova Estate v Madonna Haus

Answer 29

Facts: Had registered savings plans with beneficiaries listed. Also listed plan generally in her will included in a list to be liquidated and distributed to 22 beneficiaries. Ratio: No express revocation in the will. Must specifically revoke a specific plan. Designation has to be precise enough.

Question 30

Rehel Estate v Methot

Answer 30

Facts: Ex wife beneficiary under external instrument wrote new will, directing accounts to be cashed specifying RRSP at certain bank and use of proceeds. Ratio: specific enough, provided detailed instruction on what to do.

Question 31

Why do people do will substitutes?

Answer 31

Because if something is passed through estate it is vulnerable to creditors

Question 32

Exemption to protection from creditors

Answer 32

If valid family law claims it can be clawed back

Question 33

Amherst Crane Rentals v Perring

Answer 33

Succession Law Reform Act found to have the same protection from creditors found in the Insurance Act

Question 34

Multiple wills

Answer 34

- Another way to avoid probate fees | - Have things that need probate separately, charged based on size of estate

Question 35

Sophisticated Trusts

Answer 35

Richer you are cheaper to live