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Saturday, January 23, 2021

If my ex-husband waives his inheritance, will his children have a claim to it?

Here is another interesting question asked by a reader. I chose to share this one and comment on it in a separate thread because it's a question I hear a lot. The key to this entire question is the word "waive". Here is the reader's question followed by my comments:

"Most likely my ex-husband will waive his inheritance when his mom dies however he has 2 brothers. Would my children then have a claim to the inheritance? Would they need a lawyer?"

If your ex-husband waives his inheritance, he is stating to the executor that he wants nothing to do with it. Period. He cannot then decide who gets it instead of him. Legally, when someone waives an inheritance, the executor must proceed as if that person had died before the testator. In other words, the executor would have to act as if your ex-husband had died before his mother.

The will may state that in the event of your ex-husband passing away, his share would go to his children. Legally, that should stand up, but of course the will could say something very different. However, even if the wording does favour a gift being handed down to your children, my concern would be whether the executor would know how to proceed and whether other beneficiaries would put up a fuss about it. Most executors are rookies and will not have any knowledge of what to do when a beneficiary wants to waive his share. I would anticipate delays and possible additional costs while the executor figures it out.

My preference, always, is to try to keep people out of disputes and out of court. My suggestion would be that if your ex-husband does not want his inheritance but he DOES want his children to have it, he should not waive it. Instead, he should provide the executor with a Direction to Pay that basically says instead of paying the funds to him, to pay them to his children instead.

The difference is that with a waiver, your ex-husband has zero say in what happens to his inheritance after he waives. With a Direction to Pay, he maintains rights to his inheritance and simply asks the executor to write different cheques on his behalf. I realize that because he is your ex, you may not have any opportunity to discuss this with him or to advise him on how to handle it. If he does simply waive his inheritance, you will have to rely on the wording of the will and the competence of the executor, and hope that there is no need for direction from a judge. Most likely your children would end up hiring a lawyer.

This is a very important distinction in law. I am often asked whether a person can waive an inheritance so that their children can have it instead. Unfortunately, the word seems to mean something to people in plain English that it just doesn't mean in estate law. 


Thursday, January 7, 2021

Law in Nova Scotia regarding donation of organ & tissues is changing on January 18, 2021


In most jurisdictions in Canada, if you want to donate your organs or tissues after death, you need to say so in writing, or at the very least have a designated decision-maker who can consent on your behalf. This is changing in Nova Scotia. As of January 18, 2021, everyone is deemed to have given consent to the donation of organs and tissues unless they opt out.

Should you opt out? How do you do that? How does it all work? I encourage everyone resident in Nova Scotia to click on this link for full information on where to go from here. This arrangement is likely the way of the future so it may be of interest to other readers as well.

Monday, January 4, 2021

Renouncing as executor may not always be an automatic right

Today I'm posting a case comment that was prepared for you by James D Steele, an estates lawyer in Saskatchewan who has shared some of his thoughts on this blog before:

An interesting lesson for executors comes from the recent Saskatchewan decision in Goby v Frederick, 2020 SKQB 201

 Wayne Frederick passed away. His will appointed his sister, Shirley Frederick, to be the executrix of his estate. Shirley obtained letters probate. 

The only asset in the estate was a piece of land valued at $800. Moreover, the estate of Wayne Frederick owed a lot of debt. Shirley Frederick desired to therefore renounce probate. Shirley discovered that she could not transfer the land in the estate without paying for a valuation, which she said neither she nor the estate can afford. 

Shirley Frederick desired to renounce probate, and hoped the Public Guardian would assume the role. 

Therefore, the issue in Goby v Frederick was whether an individual has the right to simply automatically renounce as executrix of an estate, after receiving Letters Probate.

The Court said no. An individual cannot renounce, unilaterally, as executrix, after receiving Letters Probate. The Court required that Shirley bring a formal court application to be removed as executrix, and that it be served on the Public Trustee in view of the minor beneficiaries. An affidavit by Shirley Frederick was to accompany the application, setting forth evidence of her inability to administer the estate.

The lesson:

Persons who are named executors of problematic estates (i.e. ones with high debt, or whose administration may be difficult to carry out) should be sure that they wish to serve as executor. 

Once an executor obtains letters probate, if you later decide you wish to renounce, you may need to go to the expense and time of a court application to do so. 

James Steele’s preferred practice area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations. 


Thursday, December 17, 2020

Mother regrets adding daughter to title. Is severing the title a possibility?

Since we have been talking a lot lately about parents and their homes in the context of estate planning, I thought this letter from a daughter trying to deal with her mother's property would round out the group. In this case, the mother is still alive and hoping to undo the arrangements already in place. Below are the note from a reader and my comments on it:

My Mom put my Sister and I on the Deed to her home over 20 years ago. My elderly Mom now has Stage Four Cancer and lives alone. My sister and her have not spoken to each other in over 4 years (their relationship was always strained). My Mom would like to have her removed from the Deed but we all know she will not sign off on this. My Mom wants here share to go to me. I am the Executor of her Will and have POA. I am not sure if there is anything else I can do do avoid my sister getting a hold of her share of my Mom's Estate. This is such a stressful time for her emotionally, physically and I wanted to try to take some of this burden off from her, But after reading your very informative posts. I think that my sister will get her 20% share of Mom's home. Or is she in fact entitled to 50% when Mom passes?

Your note illustrates exactly what happens when a parent adds a child to the title of her home. The parent still thinks of it as her home and wants to behave as if its hers, but in reality, it is not. At least, not exclusively. Once your mother added another owner, she created legal rights for the new owner, in this case, your sister. Your mother can't take it back now.

Unfortunately, parents often like to add names to the title to their home as if it were the same as adding an item to a grocery list on the fridge. If you don't want the item any longer, scratch it off the list. It just doesn't work that way. Having your name on the title to a property means that you own it and you have rights that mean you cannot just simply be tossed off the title because someone doesn't want you there. 

As you have said, nobody expects your sister to agree to have the property transfer out of her name. That is unfortunate, but hardly surprising. Let's look at what will happen under current circumstances.

I am not sure where you found the number of 20%. That math doesn't work out for me.

You haven't said whether your mother added the two of you as joint owners or as tenants-in-common. I am going to assume joint ownership since that is by far the most usual scenario. Joint ownership carries with it a right of survivorship. Therefore, if your mother passes away and you and your sister are both on the title, the two of you sisters will be the new owners by right of survivorship.

This isn't quite the same as saying your sister owns 50% and you own 50%. Sure, if you sold the property you would each take 50% of the proceeds. But before that, there is no 50/50 split. For example, your sister could refuse to sell the house. The whole house. Not just her share. If one of you passed away while you were joint owners, there is nothing for you to leave to your own children because the surviving sister would take the whole house by right of survivorship.

Assuming that you two were added as joint owners, then there is nothing your mother can do in her will to change the ownership arrangement that will arise after she passes. The joint ownership arrangement means that the house does not fall into the estate and is not controlled by the will.

I understand that because your mother is alive and has granted you Power of Attorney, you are wondering what you can do to carry out your mother's instructions and limit your sister's ownership of your mother's property. Using a Power of Attorney, certainly you have the authority to deal with your mother's house, but only to the extent that she owns it. There is nothing you, using the Power of Attorney, can do to overcome the fact that your sister is a part owner of the house. You could, of course, ask her to transfer it back to your mother, but as you have said, that is unlikely to happen.

Something to think about is severing the title to the house. Right now, it appears that each of you three women owns 1/3 of the property. If your mother passes away, her share disappears and you and your sister would each own 1/2 of the property. Severing the title means, basically, changing from joint ownership to tenants-in-common so that your sister's share does not increase upon your mother's death. Because your sister is not cooperating and matters cannot be done by way of agreement, the severing would have to be done by a court. Again, this is because owners have rights and can't just be removed by other owners.

Severing a title costs money, as to all court processes, so think carefully about your options before deciding to go ahead. 

It's too bad that things worked out this way. Your mother was probably trying to do something good for her daughters. I wish she had had legal advice. 

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