AN ALLEGEDLY FORGED WILL + MURDER = ESTATE BATTLE

Over the weekend, I stumbled upon an interesting story that involves the murder of Judge Patrick Maqubela and the ensuing estate battle that is currently ongoing regarding his Estate.

Judge Maqubela was the acting Cape High Court Judge in South Africa and he was found suffocated to death in his Bantry Bay flat in Cape Town in June 2009.  His spouse, Thandi Maqbela (“Thandi”) and co-accused Vala Mabena are currently on trial charged with his murder.

Following his death, Thandi, initially stated that Judge Maqubela died intestate. Thandi wanted to be the executrix of his estate, however, the South Gauteng High Court advised her that she would need to post security equivalent to the estate value.  Judge Maqubela’s estate was worth $20,000,000 South African Rand, which is equal to approximately $3,000,000 US dollars.  A few days after learning that she would have to post $20,000,000 Rand as security to administer Judge Maqubela’s Estate, Thandi, contacted the South Gauteng High Court and advised them that she had found her husband’s will, which named her as the executrix, and security was not required.

If Judge Maqubela died intestate, the accused, Thandi, would receive half the Deceased’s assets, as well as a surviving spouse portion, while the balance would be distributed to his biological children (5 in total).  The alleged Last Will and Testament, excludes Judge Maqubela’s two adult children from a previous marriage; however it includes, Thandi, her two children from her marriage with Judge Maqubela and her daughter from a previous relationship.  It’s important to note that Judge Maqubela never legally adopted Thandi’s daughter. 

One of the adult children who is excluded under the Will has challenged the validity of the Last Will and Testament, alleging that the signature of Judge Maqubela is forged.

I think this story is interesting for two primary reasons.  If convicted for murder, under Ontario Law, Thandi would be precluded from receiving any interest in the Judge’s Estate by virtue of the Forfeiture Rule.  The Forfeiture Rule was quoted in Re Benson Estate: “A sane person who commits murder is debarred by public policy from taking any benefit under the Will or intestacy of his victim.”

I think it’s also interesting to look at this case from the prospective of a litigator.  A factor that is used in determining the validity of the Last Will and Testament of a deceased person is to consider whether the testator had any reason to deviate from his prior estate plan. For instance, on an intestacy, the Judge’s biological children from another marriage had an interest in his Estate.  In determining the validity of the produced Will, some experts may look for evidence that would justify the Judge’s alleged decision to disinherit those children by virtue of executing the Will.

Thank you for reading,

Rick Bickhram

Standard of Care for Trustees When Investing Trust Assets

It’s important to always seek professional advice when planning your estate as there are numerous tools that can be utilized to reduce income tax liability.  A common vehicle often used to defer income tax liability is a trust. 

In a trust, assets are held in trust over a period of time for the benefit of one or more beneficiaries, sometimes in succession.  The person who administers the trust is known as a trustee and he or she is entrusted to act for the benefit of others. The administration of a trust essentially means managing the trust over the period of time set-out in the testamentary or trust instrument.

Given the inherent nature of responsibility impressed upon a trustee, our common law and statutes impose standards that trustees must comply with when dealing with trust property.

Historically, the Trustee Act of Ontario provided a list of authorized investments for trustees, which set-out allowable investments for trustees of a trust or executors in an estate.  The “legal-list” approach was too restrictive as the investments listed were conservative in nature and did not keep up with the industry standard followed by most investors.  On July 1, 1999 the Trustee Act was amended, which amongst other things, replaced the “legal-list” approach with the prudent investor rule.

Section 27 of the Trustee Act sets-out the standard of care for trustees when investing assets held in a trust.  Section 27(1) states, “in investing trust property, a trustee must exercise the care, skill, diligence and judgment that a prudent investor would exercise in making investments”.  Section 27(2) states that “a trustee may invest trust property in any form of property in which a prudent investor might invest”.

With the implementation of the prudent investor rule, trustees are no longer restricted when investing trust assets as they may now make investments based on a standard of care. 

Thank you for reading,

Rick Bickhram 

Applying for Directions? Which Rule Should I Use?

In the last week of September, I would like to write on the differences between two rules that are often used by estate lawyers; Rule 14.05(3) and Rule 75.06(1) from the Rules of Civil Procedure.

Under Rule 14.05(3)(a), an Applicant may commence an Application where the relief claimed is, the opinion, advice or direction of the court on a question affecting the rights of a person in respect of the administration of the estate of a deceased person or the execution of a trust.  In contrast, Rule 75.06(1) states that any person who appears to have a financial interest in an estate may apply for directions … as to the procedure for bringing any matter before the court.

An Applicant may use either rule to apply for directions from the court, however, the difference between the two rules lies in the remedy that the Applicant seeks.  For instance, Rule 14.05(3)(a) is a substantive remedy that addresses the rights of a person with respect to the administration of an estate or the execution of a trust.  Therefore an Applicant who relies on Rule 14.05(3)(a), is asking the court to make a determination of his or her rights in the context of an estate.

Rule 75.06(1) is a procedural remedy, which permits the Applicant to seek a procedural order regarding “any matter before the court”.  Therefore an Applicant who utilizes Rule 75.06(1) may seek a court order that frames issues for trial, contemplates examination of the parties, permits the disclosure of relevant documents to their matter and establishes time-lines for the completion of a specific tasks in their court proceeding, such as mediation and pre-trial conferences. 

In summary, both rules can may be used to apply to the court for direction, however with Rule 14.05 (3)(a), the Applicant is asking the court for a specific answer to a question affecting his or her rights, whereas with Rule 75.06(1), the Applicant is requesting that the court provide them with a “road-map” to their court proceeding.

Have a Great Day!

Rick Bickhram

The Disposition of the Human Body After Death

When a person dies, who decides how the remains will be disposed of?  Do the wishes of the religion of the deceased play a role in deciding how the remains will be disposed of?

It is well established in the jurisprudence for Ontario that plans for the service and burial arrangements are the responsibility of the estate trustee.  This responsibility can conflict with the wishes and expectations of the deceased and family members, particularly in a religious context.

In Saleh v. Reichert, the deceased was of the Muslim faith.  Her husband had converted to the Muslim faith for the purpose of there marriage.  There was evidence indicating that the deceased expressed her wish to be cremated upon her death.  The deceased’s husband was appointed as the estate trustee without a will and intended to honour the deceased’s wishes.  The deceased’s father objected to the cremation on religious grounds.

The court affirmed the fundamental duty of anestate trustee is to ensure that the remains of a body be disposed of in adecent and dignified fashion.  The court held that religious law has no bearing on the case.   In Ontario, burial and cremation are both means that would meet the requirement for disposal in a decent and dignified fashion.  The deceased’s father’s action was dismissed.

It is important to note that it was acknowledged that there is no property in a body.  Therefore, any instructions left by the deceased, whether in a Will or otherwise are only precatory and are not binding on the estate trustee.

In Sopinka (Litigation guardian of) v. Sopinka, the Deceased, (the “Deceased”) and his spouse were married in 1983.  The parties had two children, who were both minors.  The parties separated in June 1996 and at the time of the Deceased’s death, the parties were in the midst of a very messy divorce.

In his Will, the Deceased, names his father (“Father”) and a friend, Brian Sanders, as the estate trustees for his Estate. Brian Sanders renounced his position as estate trustee.  The Deceased was cremated.  Despite requests from the Deceased’s spouse, the Father did not disclose the whereabouts of the Deceased’s ashes.

A few months after his son’s death, the Father also died.  In his Last Will and Testament, the Father named his wife (the “Defendant”), as estate trustee for his Estate.  Unbeknownst to the Deceased’s spouse or the children, the ashes of the Deceased were placed in the coffin of the Father and the coffin was buried.  The Deceased’s spouse (as litigation guardian for the children) commenced an action against the Defendant seeking an order that the body of the Father be exhumed from his grave and an order that after the exhumation, the Plaintiffs be given the ashes of the Deceased.  In addition, the Deceased’s spouse was also seeking damages of $100,000 for the “intention infliction of mental suffering”.

In the decision, Quinn, J., re-affirmed the following basic principles governing the role and responsibilities of estate trustees in Ontario:

1. Pursuant to section 3(1) and (2) of the Trustee Act; where a trustee dies… the personal representatives of the last surviving… trustee may by writing appoint another person… to be a trustee… in the place of the trustee dying;
2. One of the general duties of an estate trustee is to dispose of the body of the deceased;
3. This duty includes a right of possession of the body for the purpose of disposition;
4. The right of possession exists against even the surviving spouse of the deceased;
5. The rights of the personal representative in respect of burial continue after burial,

In the decision, Quinn, J., disimissed the Deceased spouse’s action stating that the Defendant succeeded the Father’s role as the personal representative for the Deceased’s Estate and it could not be said that she did anything inappropriate in themanner of disposing the Deceased’s ashes.

Thank you for reading and until Wednesday…

Rick Bickhram

Ontario Court Hands a Rogue Estate Trustee a 14 Month Jail Sentence

A common question asked by clients is who should I name in my Will as the estate trustee for my Estate. 

Selecting an estate trustee to administer your estate after you have long passed on is not an easy task.  Choosing an estate trustee is one of the most important decisions you will make when you plan your estate.  The role of the estate trustee is usually time-consuming and difficult.  Honesty is an essential trait of an estate trustee. This person must act in the best interests of the beneficiaries and must, at all times, avoid favouring his or her interests over those of the beneficiaries.  In an article published by The Globe & Mail, “The Dark Side of Canada’s Inheritance System“, Jacquie McNish and Paul Waldie describe the administration of Paul Penna’s estate, which went horribly wrong. 

In the Matter of the Estate of Paul Penna, Paul Penna (the “Deceased”) was a successful businessman who died on August 29, 1996.  The Deceased left a Will dated April 18, 1996, naming his wife Lorraine Penna, his friend and colleague, Charles Langston, and his other colleague, Barry Landen (“Landen“), as the Estate Trustees for his Estate.  On the date of death, the approximate value of the Deceased’s estate was $24,000,000. 

During the numerous hearings that occurred, it was a generally accepted that Landen and not the other named estate trustees, completely controlled all of the administration of the Estate, including banking and cheque-writing. It was also determined that Landen never followed the terms of the Deceased’s Will.  Between the date of the Deceased’s death on August 29, 1996, and the time of the hearing, the majority of the assets of the estate were no longer in the estate and/or missing.  The Honourable Justice Greer stated: 

“This is not a matter of a few thousand dollars being lost on a bad stock transaction, or errors made in not balancing the estate portfolio, or a failure to provide some vouchers. This is a case where millions of dollars have disappeared without explanation, and where no Accounts were ever kept by the Estate Trustees and where we do not even know if the Will was ever probated and all charities put on notice of their interests under the Will.”

To make matters worse for Landen, he had breached numerous court orders including an order requiring him to file an Application to pass his accounts as one of the estate trustees; to provide the Court with an updated affidavit concerning his assets; and to produce documents at his examination in aid of execution.  

Given the severity of the breaches by Landen, Justice Greer stated: “Landen’s failure to pass accounts and be in contempt of three other Orders and never account for his fraud, is so egregious it calls for a sentence that will cause others to think carefully before they breach court orders.”  Landen was subsequently sentenced to a 14 month imprisonment term.   

As I indicated above, choosing an estate trustee is one of the most important decisions you will make when you plan your estate.  There is a great deal of responsibility and commitment that goes along with the role and function of an estate trustee.  You should select an estate trustee that you have confidence in and will provide the level of service needed in order to wind up your estate properly. 

Until next week,

Rick Bickhram