Kavina Nagrani 416.746.4778 knagrani@loonix.com "While my job title may be 'lawyer', I like to think of myself as an elder advocate, trusted advisor and, most importantly, someone who just simply cares."

Kavina Nagrani is a lawyer with the mid-size law firm, Loopstra Nixon LLP, in Toronto, Ontario practicing mainly in areas of:

• Elder Law • Wealth Management /

Estate & Trust Planning • Capacity & Guardianship

Law • Wills & Estates &

Powers of Attorney

AGING. RELENTLESS, UNDENIABLE AND OUR, INEVITABLE REALITY

We all strive to age gracefully, but are you striving to age wisely, and more importantly, safely?

This newsletter was created as an Elder Law forum where I can share tips and stories which I hope will in some way educate and inspire you and your loved ones to age smart!

AUGUST 2017

POWER OF ATTORNEY COMPENSATION: SHOULD MY CHILDREN BE PAID FOR LOOKING AFTER ME?”

Let me ask you this: Were you paid for looking after your children when they were young? In one view, it seems illogical that we would compensate our family members to care for us if we were sick or incapacitated. But what if your family member had to give up their job or other life activities to provide constant care and management for you? In

these latter cases, compensation may seem appropriate and deserved. Many of my clients choose to explicitly disallow compensation in the power of attorney document where the person appointed is the spouse or child and believe that he or she will care for them out of the “goodness of their hearts” knowing also that they may eventually inherit a portion of the assets under the Will. Others see remuneration for caregiving as appropriate, even when it is a family member because of the time and effort that may be required. Ultimately this is a decision that every grantor of a power of attorney should be making, with thought and consideration of the consequences. I find many power of attorney documents do not address this issue in enough detail. If compensation is allowed, how much? When can it be taken? Does anyone need to approve it? If compensation is disallowed, how will the attorney for property react to that statement? Will they resign / refuse to take on the role? These are all important questions to consider when executing a power of attorney document.

Many power of attorney documents for property gloss over the paragraph relating to compensation and simply authorize the attorney to “take compensation in accordance with the Substitute Decisions Act.” So what does that mean? Here it is: The law in Ontario provides that, unless otherwise stated in the power of attorney document, the attorney for property (or “Substitute Decision-Maker”), is entitled to take a fee in the amount of 3% on all of the receipts and disbursements made on your behalf from the assets of your Estate, in addition to 3/5 of 1`% of

LEGACIES & LIBERTIES 2 the average annual value of assets under management. Where a power of attorney document is silent on compensation or simply refers to these guidelines, attorneys should be reminded that this is just a guideline and that any fees taken are subject to challenge by interested parties and adjustment by a judge. This premise has been confirmed by the Court of Appeal in the recent case, Armitage v. Salvation Army 2016 ONCA 971.

In closing, I recommend that the issue of compensation be discussed not only between the lawyer and client at the time a power of attorney document is drafted, but between the grantor of the power of attorney and the person to whom they are granting the authority.

WILL CHALLENGES 101

To successfully obtain a judge’s order to set aside someone’s Will in Ontario after one’s demise is no easy task, and whether there is validity to the claim or not, people often underestimate the legal costs and time required in these types of court applications. We now know since the Court of Appeal’s decision in Spence v. BMO Trust Company, 2016, that the courts will not interfere with one’s testamentary freedom, even where the nature of the Will may appear unfair or discriminatory, as long as the Will does not require the executor to carry out discriminatory future acts, but the same Will ‘may’ be successfully challenged on other grounds. The common will challenges which I come across are on grounds of undue influence, the testator’s testamentary capacity, improper execution of the Will or where a Will was revoked by marrying after the date of the Will.

So how is an estate distributed if the Will is set aside?

If a Will is successfully set aside and the testator had a previously executed and valid Will, that previously executed Will may be ordered in force and effect. Alternatively, the person may be deemed to have died intestate (meaning without a Will) in which case the distribution of assets would occur in accordance with the law under the Succession Law Reform Act.

Tips for Preventing Will Challenges

Drafting lawyers should be careful to take thorough and detailed notes when meeting with clients to obtain Will instructions. Lawyer notes are often called upon as evidence in Will challenge cases. For testators, I recommend you:

i) Make your Will while there is no question as to your mental capacity, and when in doubt, have a formal capacity assessment done before making your Will.

ii) Meet with a qualified Estates lawyer to ensure your Will is thorough, meets all of the legal requirements for a valid Will in Ontario and is properly executed.

iii) Remember that marriage revokes your Will, so if you are in a common-law relationship or single when making your Will, ask your lawyer to make the Will “in contemplation of marriage”.

iv) Make sure your Will reflects YOUR wishes. Don’t let others influence your final wishes. They are your final wishes after all!

About Loopstra Nixon LLP Loopstra Nixon is a full-service Canadian business and public law firm dedicated to serving clients involved in business and finance, litigation and dispute resolution, municipal, land use planning and development, and commercial real estate. Major financial institutions, insurance companies, municipal governments, and real estate developers along with corporate organizations and individuals are among the wide range of clients we are proud to serve.

About Legacies & Liberties This article contains general information only. Legacies & Liberties is a brief canvasing of the topic presented and should not be relied upon as professional advice in making any personal or business decisions. Always consult with a licenced legal professional before making any decisions regarding your own personal or business needs. The author takes no responsibility to update any of the information presented in this article. All rights reserved. © Looptra Nixon LLP 2017.