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My wife, Michele Rule, took these photographs of the International Criminal Tribunal for the former Yugoslavia building when she was in The Hague, Netherlands this spring.
Sunday, July 29, 2007
International Criminal Tribunal for the Former Yugoslavia, in The Hague
My wife, Michele Rule, took these photographs of the International Criminal Tribunal for the former Yugoslavia building when she was in The Hague, Netherlands this spring.
Tuesday, July 24, 2007
B.C. Justice Review Task Force Forum and Proposed New Rules
As I have written before, the B.C. Justice Review Task Force has recommended fundamental changes in the way civil law suits are conducted in British Columbia. The Task Force has now prepared what it calls a concept draft of Proposed New Rules of Civil Procedure of the British Columbia Supreme Court.
The Task Force has also set up a B.C. Justice Review Forum, which will allow you to comment on the proposals. The website is here.
The Task Force has also set up a B.C. Justice Review Forum, which will allow you to comment on the proposals. The website is here.
Sunday, July 22, 2007
Rational and Valid Reasons for Disinheriting a Child
In British Columbia, a spouse (including a common law spouse) or a child (including an independent adult child) may apply to vary a will under the Wills Variation Act, RSBC 1996, c. 490. If the court finds that the testator has not made adequate provision for his or her spouse or child, the court may make such provision as the court decides is adequate, just and equitable in the circumstances.
Section 5 of the Wills Variation Act says that the court may consider evidence of the testator's reasons for disinheriting (or leaving a relatively small amount) to a spouse or child.
The British Columbia Court of Appeal has said that a parent may disinherit an adult child if the parent has rational and valid reasons for disinheriting the child. In Kelly v. Baker (1996), 15 E.T.R. (2d) 21 (BCCA), for example, Mr. Justice Finch (now CJBC) at paragraph 58 held that a parent could disinherit her adult child “... if there were valid and rational reasons at the time of her death - valid in the sense of being based on fact; rational in the sense that there is a logical connection between the reasons and the act of disinheritance.”
A parent might disinherit a child, or leave that child less than his or her siblings, because the parent and child are estranged. The parent, or the parent's lawyer, might be tempted to put a litany of the child's misdeeds in the will, or simply say that the child has mistreated or failed to show love to the parent.
I don't think expressing the parent's dissatisfaction with the child in the will is a good idea. When the child—who may have his or her own grievances against his or her parent or siblings—gets a copy of the will, and sees such comments, the child will perceive the will and the comments as the final insult. The child, who might otherwise have accepted the will, is likely to feel more aggrieved. He or she may feel the need to sue to prove that the parent was at fault. The comments will make it more likely, rather than less likely, that the child will bring a Wills Variation Act claim, or some other challenge to the will.
If a parent has good reasons, but those reasons might antagonize the child who is left little or nothing in the will, my practice is to draft a memorandum for my client, rather than put the reasons in the will. By setting out the reasons in a separate memorandum, the executor is not required to release the memorandum if no one starts a Wills Variation Act claim. If a child does make a claim, then the executor can disclose the memorandum, and the court may consider the reasons. But if the child does not bring an action, there is no reason to needlessly antagonize the child.
Section 5 of the Wills Variation Act says that the court may consider evidence of the testator's reasons for disinheriting (or leaving a relatively small amount) to a spouse or child.
The British Columbia Court of Appeal has said that a parent may disinherit an adult child if the parent has rational and valid reasons for disinheriting the child. In Kelly v. Baker (1996), 15 E.T.R. (2d) 21 (BCCA), for example, Mr. Justice Finch (now CJBC) at paragraph 58 held that a parent could disinherit her adult child “... if there were valid and rational reasons at the time of her death - valid in the sense of being based on fact; rational in the sense that there is a logical connection between the reasons and the act of disinheritance.”
A parent might disinherit a child, or leave that child less than his or her siblings, because the parent and child are estranged. The parent, or the parent's lawyer, might be tempted to put a litany of the child's misdeeds in the will, or simply say that the child has mistreated or failed to show love to the parent.
I don't think expressing the parent's dissatisfaction with the child in the will is a good idea. When the child—who may have his or her own grievances against his or her parent or siblings—gets a copy of the will, and sees such comments, the child will perceive the will and the comments as the final insult. The child, who might otherwise have accepted the will, is likely to feel more aggrieved. He or she may feel the need to sue to prove that the parent was at fault. The comments will make it more likely, rather than less likely, that the child will bring a Wills Variation Act claim, or some other challenge to the will.
If a parent has good reasons, but those reasons might antagonize the child who is left little or nothing in the will, my practice is to draft a memorandum for my client, rather than put the reasons in the will. By setting out the reasons in a separate memorandum, the executor is not required to release the memorandum if no one starts a Wills Variation Act claim. If a child does make a claim, then the executor can disclose the memorandum, and the court may consider the reasons. But if the child does not bring an action, there is no reason to needlessly antagonize the child.
Friday, July 20, 2007
Feuding Executors and Conflicts of Interests
Don't appoint two people who don't get along as co-executors. That is one of the lessons in Estate of Joan Maki, 2007 BCSC 1034.
Joan Maki appointed her twin daughters as co-executors of her will. She had six children, all daughters, but left most of her estate to her twins.
Joan Maki had purchased a condominium in White Rock, which was held with Karen Maki, who was one of the twin daughters. They each had a half interest on title as tenants in common (meaning that on the death of either, the deceased's half interest would form part of the deceased's estate).
After Joan Maki's death, her other twin daughter, Kristy Gouldsmith, as well as her other four daughters, challenged Karen Maki's claim to be entitled to a half-interest in the condominium. The other four, also brought a Wills Variation Act claim seeking to vary their mother's will, on the basis that their mother did not make adequate provision for them.
Kristy Gouldsmith, who was supported by the other four daughters, applied to court to pass over Karen. If successful, Kristy Gouldsmith would be the sole executor, and she would be able to sue Karen Maki on behalf of their mother's estate to recover the half interest in the condominium.
Karen Maki, in turn, applied to court for a grant of probate, reserving the right of her twin sister to apply at a later date. She also made an application to have Kristy Gouldsmith removed as executor. Karen Maki also asked the court to appoint an independent administrator if the court did not grant probate to her, Karen Maki.
Master Taylor granted Kristy Gouldsmith's application. He passed over Karen Maki, and ordered that probate be granted to Kristy Gouldsmith. The Court found that Karen Maki was in a conflict of interest. Her sisters were claiming that Karen Maki held the half-interest in the condominium as well as some bank accounts in trust for their mother's estate. She could not both act on behalf of the estate, and defend her own personal interest in the disputed assets.
Master Taylor also rejected Karen Maki's argument that Kristy Gouldsmith should be removed as executor. Although the two twin daughters did not get along, Kristy Gouldsmith had not done anything to endanger the estate assets. Nor had she acted dishonestly or shown a want of fidelity.
Joan Maki appointed her twin daughters as co-executors of her will. She had six children, all daughters, but left most of her estate to her twins.
Joan Maki had purchased a condominium in White Rock, which was held with Karen Maki, who was one of the twin daughters. They each had a half interest on title as tenants in common (meaning that on the death of either, the deceased's half interest would form part of the deceased's estate).
After Joan Maki's death, her other twin daughter, Kristy Gouldsmith, as well as her other four daughters, challenged Karen Maki's claim to be entitled to a half-interest in the condominium. The other four, also brought a Wills Variation Act claim seeking to vary their mother's will, on the basis that their mother did not make adequate provision for them.
Kristy Gouldsmith, who was supported by the other four daughters, applied to court to pass over Karen. If successful, Kristy Gouldsmith would be the sole executor, and she would be able to sue Karen Maki on behalf of their mother's estate to recover the half interest in the condominium.
Karen Maki, in turn, applied to court for a grant of probate, reserving the right of her twin sister to apply at a later date. She also made an application to have Kristy Gouldsmith removed as executor. Karen Maki also asked the court to appoint an independent administrator if the court did not grant probate to her, Karen Maki.
Master Taylor granted Kristy Gouldsmith's application. He passed over Karen Maki, and ordered that probate be granted to Kristy Gouldsmith. The Court found that Karen Maki was in a conflict of interest. Her sisters were claiming that Karen Maki held the half-interest in the condominium as well as some bank accounts in trust for their mother's estate. She could not both act on behalf of the estate, and defend her own personal interest in the disputed assets.
Master Taylor also rejected Karen Maki's argument that Kristy Gouldsmith should be removed as executor. Although the two twin daughters did not get along, Kristy Gouldsmith had not done anything to endanger the estate assets. Nor had she acted dishonestly or shown a want of fidelity.
Saturday, July 14, 2007
Sometimes It Just Doesn't Add Up
William Murray died in September 2005, having outlived his wife. He never had any children, brothers or sisters. His nearest living relative was a second cousin, with whom he had little or no contact.
In his last will, Mr. Murray left friends and charities various percentages of his estate. The will included a gift of ten percent of the residue of his estate to the Salvation Army. His will also included a provision that if any of the beneficiaries fail to acquire their percentage share (for example, if they died before Mr. Murray), that share will go to the Salvation Army.
There was just one problem with the will: the percentages added up to ninety percent. The will did not dispose of the other ten percent.
The lawyer who drew the will provided an affidavit to the court, with the lawyer's notes. The affidavit and notes indicated that Mr. Murray had instructed the lawyer that he wished to leave the Salvation Army twenty percent of his estate. The lawyer made an error, and neither the lawyer or Mr. Murray caught the error when they reviewed the will before signing.
It seems pretty clear what should happen, right?
The rules for interpreting wills are like the scenic route: you may get to the right place, but you will get there in a round-about way. The rule in British Columbia is that the court may not consider direct evidence of what the testator (in this case, Mr. Murray) told the lawyer or others he intended. (There is a limited exception, which does not apply here.) The court can consider evidence of surrounding circumstances, such as Mr. Murray's relationship with his family and beneficiaries.
This rule makes theoretical sense. The theory is that, if the courts allow direct evidence of intention, they will in effect allow the will to be amended by evidence that does not meet the formal requirements for a valid will. But if theoretically sound, this rule prohibiting direct evidence of intention may defy common sense in practice.
Whether the rule is sound or not, the court could not take into consideration the lawyer's evidence that the testator said he wanted the Salvation Army to receive twenty percent of the estate.
In his reasons for judgment in Murray Estate, 2007 BCSC 1035, Mr. Justice Wilson found that Mr. Murray intended to dispose of all of his estate, rather than just ninety percent. He based this both on the wording of the will, which gave all of the estate to Mr. Murray's executors to distribute, and on a presumption that people intend to dispose of their entire estates when they make a will.
Mr. Justice Wilson also considered the fact that Mr. Murray did not have much contact with his father's side of the family, who would inherit if the court found that the will failed to dispose of ten percent of the estate (this is known as a partial intestacy).
The key to the decision appears to be the clause providing that if any of the percentage gifts fail, the undistributed share would go to the Salvation Army. Although this clause did not apply directly to the undisposed ten percent, the court inferred from this clause that Mr. Murray intended to make the Salvation Army the ultimate residual beneficiary.
Mr. Justice Wilson interpreted the will as disposing twenty percent of the estate to the Salvation Army.
In his last will, Mr. Murray left friends and charities various percentages of his estate. The will included a gift of ten percent of the residue of his estate to the Salvation Army. His will also included a provision that if any of the beneficiaries fail to acquire their percentage share (for example, if they died before Mr. Murray), that share will go to the Salvation Army.
There was just one problem with the will: the percentages added up to ninety percent. The will did not dispose of the other ten percent.
The lawyer who drew the will provided an affidavit to the court, with the lawyer's notes. The affidavit and notes indicated that Mr. Murray had instructed the lawyer that he wished to leave the Salvation Army twenty percent of his estate. The lawyer made an error, and neither the lawyer or Mr. Murray caught the error when they reviewed the will before signing.
It seems pretty clear what should happen, right?
The rules for interpreting wills are like the scenic route: you may get to the right place, but you will get there in a round-about way. The rule in British Columbia is that the court may not consider direct evidence of what the testator (in this case, Mr. Murray) told the lawyer or others he intended. (There is a limited exception, which does not apply here.) The court can consider evidence of surrounding circumstances, such as Mr. Murray's relationship with his family and beneficiaries.
This rule makes theoretical sense. The theory is that, if the courts allow direct evidence of intention, they will in effect allow the will to be amended by evidence that does not meet the formal requirements for a valid will. But if theoretically sound, this rule prohibiting direct evidence of intention may defy common sense in practice.
Whether the rule is sound or not, the court could not take into consideration the lawyer's evidence that the testator said he wanted the Salvation Army to receive twenty percent of the estate.
In his reasons for judgment in Murray Estate, 2007 BCSC 1035, Mr. Justice Wilson found that Mr. Murray intended to dispose of all of his estate, rather than just ninety percent. He based this both on the wording of the will, which gave all of the estate to Mr. Murray's executors to distribute, and on a presumption that people intend to dispose of their entire estates when they make a will.
Mr. Justice Wilson also considered the fact that Mr. Murray did not have much contact with his father's side of the family, who would inherit if the court found that the will failed to dispose of ten percent of the estate (this is known as a partial intestacy).
The key to the decision appears to be the clause providing that if any of the percentage gifts fail, the undistributed share would go to the Salvation Army. Although this clause did not apply directly to the undisposed ten percent, the court inferred from this clause that Mr. Murray intended to make the Salvation Army the ultimate residual beneficiary.
Mr. Justice Wilson interpreted the will as disposing twenty percent of the estate to the Salvation Army.
Sunday, July 08, 2007
Executor Conflicts of Interest: Veitch Estate
British Columbia courts do not lightly remove an executor of a will. When you make a will, you may appoint someone to act as your executor to carry out the terms of your will. The general rule is that the courts will respect your choice of who to act as your executor after your death. But, if an executor acts contrary to the interests of the beneficiaries as a group, or puts himself or herself in a conflict of interest with the beneficiaries, the court may remove the executor.
This point is illustrated in Veitch Estate, 2007 BCSC 952.
Ruth Veitch had three children. Her husband died before her. In her will she appointed her son Scott Veitch as her first alternate executor (in case her husband died before her). She divided her estate equally among her three children.
On her death in November 2003, Ruth Veitch owned the family real estate business: Veitch Realty.
Scott Veitch applied for an received letters probate of Ruth Veitch's will. He managed Veitch Realty after his mother's death. Scott Veitch and his wife were also employed as sales agents in the business.
Ruth Veitch's other son, Kevin Veitch, brought an application to court to remove his brother as executor. He alleged that Scott Veitch was acting in a conflict of interest, and that he was not dealing with the estate in a timely manner. Kevin Veitch asked the Supreme Court of British Columbia to appoint him as trustee of the estate, or alternatively to appoint a trust company or lawyer, in place of Scott Veitch.
Mr. Justice Kelleher found that Scott Veitch was acting in a conflict of interest. As manager of Veitch Realty, Scott Veitch had changed the commissions the business paid to the sales agents. When Ruth Veitch died, the sales agents received 60% of the commissions they generated for the business, with Veitch Realty receiving the other 40%. Scott Veitch changed the commission split so that those sales agents who brought in at least $65,000 in commissions per year would receive 70% of the commissions. This change primarily benefited Scott Veitch and his wife.
According to Mr. Justice Kelleher,
But, the Mr. Justice Kelleher did not appoint Kevin Veitch or a professional trustee in Scott Veitch's place. Instead, he appointed their sister, Charmaine Clayton. The appointment of Charmaine Clayton reflected Ruth Veitch's wishes, as set out in her will, that her daughter act as executor and trustee if Scott Veitch were unwilling or unable to act as executor.
This point is illustrated in Veitch Estate, 2007 BCSC 952.
Ruth Veitch had three children. Her husband died before her. In her will she appointed her son Scott Veitch as her first alternate executor (in case her husband died before her). She divided her estate equally among her three children.
On her death in November 2003, Ruth Veitch owned the family real estate business: Veitch Realty.
Scott Veitch applied for an received letters probate of Ruth Veitch's will. He managed Veitch Realty after his mother's death. Scott Veitch and his wife were also employed as sales agents in the business.
Ruth Veitch's other son, Kevin Veitch, brought an application to court to remove his brother as executor. He alleged that Scott Veitch was acting in a conflict of interest, and that he was not dealing with the estate in a timely manner. Kevin Veitch asked the Supreme Court of British Columbia to appoint him as trustee of the estate, or alternatively to appoint a trust company or lawyer, in place of Scott Veitch.
Mr. Justice Kelleher found that Scott Veitch was acting in a conflict of interest. As manager of Veitch Realty, Scott Veitch had changed the commissions the business paid to the sales agents. When Ruth Veitch died, the sales agents received 60% of the commissions they generated for the business, with Veitch Realty receiving the other 40%. Scott Veitch changed the commission split so that those sales agents who brought in at least $65,000 in commissions per year would receive 70% of the commissions. This change primarily benefited Scott Veitch and his wife.
According to Mr. Justice Kelleher,
... Scott Veitch’s position as executor of the estate permits him to continue to delay distribution of the estate, including the distribution of the beneficiaries’ respective interests in Veitch Realty. His personal interest is therefore in direct conflict with the interests of the estate: his desire to maintain a comfortable lifestyle through his management of Veitch Realty so as to favour himself is in conflict with his duty to manage the business for the benefit of the estate, and with his duty to distribute the
estate to the beneficiaries, which includes distributing to the other beneficiaries their respective interests in the Company.
But, the Mr. Justice Kelleher did not appoint Kevin Veitch or a professional trustee in Scott Veitch's place. Instead, he appointed their sister, Charmaine Clayton. The appointment of Charmaine Clayton reflected Ruth Veitch's wishes, as set out in her will, that her daughter act as executor and trustee if Scott Veitch were unwilling or unable to act as executor.
Monday, July 02, 2007
The Pioneer Courthouse, Portland, Oregon
My wife, Michele, took these photographs of the Pioneer Courthouse last month. The Pioneer Courthouse is a seat of the United States Court of Appeals for the Ninth Circuit. According to this site on Historic Federal Buildings, the original courthouse was designed by Alfred Mullett, and completed in 1875. The courthouse was expanded in the beginning of the twentieth century.
The Pioneer Courthouse is on the east side (if my memory serves me) of Portland's beautiful Pioneer Courthouse Square. (I found this neat article on the history of the site and its redevelopment from the Nohad A. Toulan School of Urban Studies and Planning, Portland State University.)
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