Daniel Estate (Re): A « ‘Good News’ Story »

14 mai 2019 | Jennifer A. N. Corak

( Disponible en anglais seulement )

One’s choice of estate trustee, attorney for property and attorney for personal care is an important one.  An estate trustee faces the responsibility of administering your estate in accordance with your Will(s) following your passing, thus being the one carrying out your wishes when you are no longer around to do so.  An attorney for property named in a Continuing Power of Attorney for Property is generally given broad powers[i] to do anything with your property that you can do, except make or change your Will(s).  An attorney for personal care is given the power to make personal care and treatment decisions for you when you are incapable of making them yourself.  Given the responsibility faced by each person acting in any of these roles, an individual executing a Will, Continuing Power of Attorney for Property and/or Power of Attorney for Personal Care must give thought to who they name; and they must trust each such person’s ability to carry out his or her responsibilities.  Failure to give sufficient consideration to such appointments by a testator[ii] or grantor[iii] risks future litigation.

Recently in Daniel Estate (Re)[iv], an application to pass accounts and seek compensation for acting as estate trustee and under Powers of Attorney for Property and Personal Care, demonstrated what can happen when the “right” choice is made.

The Applicants, Linda and Ted Austin, provided varying levels of assistance to Isabel and Wayne Daniel (high net worth, philanthropic individuals whose daughter had passed, with no next of kin and no one else to look after them) for well over 20 years without asking for or taking any compensation.  Linda and Ted were the friends and former neighbours of Isabel and Wayne, but, as observed by Justice Di Luca, in many ways “acted like loyal and dutiful family members”.[v]  Not only did they assist with various chores and tasks, but also provided comfort and company.  Both Isabel and Wayne suffered strokes in their later years.  They were physically disabled and effectively confined to their home.  With the help of Linda and Ted, Isabel and Wayne managed to continue living together and independently, until Isabel and Wayne decided to move into assisted living.[vi]

In 2011, Linda and Ted became Isabel and Wayne’s attorneys for property and attorneys for personal care, and “managed Isabel and Wayne’s financial affairs, tended to their personal needs and provided emotional support.”[vii]  Linda and Ted continued to be of assistance when Isabel and Wayne moved into assisted living and subsequently when Wayne needed to be moved to a home that could provide more intensive care.  When Wayne passed away in 2017, Linda and Ted acted as estate trustees as Isabel was unable to do so.[viii]

Discussing the handling of Isabel and Wayne’s finances, Justice Di Luca writes at paragraphs 17 to 19:

[17]           In terms of finances, Linda and Ted assisted the couple with all of their day to day affairs. They acted conscientiously and scrupulously in this regard. This is confirmed by a detailed financial analysis prepared by a Chartered Professional Account and included in the application record. This analysis was commissioned by counsel for the Applicants in order to leave no stone unturned in demonstrating the care taken with the couple’s finances.

[18]           The accounting analysis is very helpful. It includes a source document review for a seven year period and includes a review of the Daniel’s complicated investment portfolio. Every material expense is reviewed, a reconciliation of investments accounts is undertaken and amounts are cross-referenced to the couple’s tax returns. The Austin’s were required to provide explanations for any transaction over $1,000, all cash transactions and any recurring expenses.

[19]           The accounting analysis reveals no issues in terms of Linda and Ted’s handling of the couple’s funds. Not only were the funds well handled, over the period of the Austin’s stewardship the investment portfolio grew in value from $6.06 million to over $7.36 million.

In their application, Linda and Ted sought compensation with respect to acting in all three roles.  They calculated the compensation for acting as estate trustee in accordance with the formula found in a Compensation Agreement that was created by RBC Trust and appended to Wayne’s Will.  Justice Di Luca found there was no apparent reason for Linda and Ted not to receive compensation calculated in this manner.[ix]

For acting as attorney for property, compensation was calculated using the formula set by Ontario Regulation 26/95 under the Substitute Decisions Act, 1992 (Ontario), applied to the years 2012 to 2018.[x]  As part of Linda and Ted’s application, it was pointed out that:

in estate matters, guideline percentages are used but the amounts determined under the guidelines are then assessed for reasonableness against an enumerated list of factors; see Laing Estate v. Hines, 1998 CanLII 6867 (ONCA) and Flaska Estate (Re), 1998 CanLII 5191 (ONCA). The factors assessed include; the size of the trust, the care and responsibility involved, the time occupied in performing the duties, the skill and ability shown, and the success resulting from the administration.[xi]

Justice Di Luca approved the manner in which compensation for acting as attorney for property was calculated, stating that:

While not necessary to do so, I also find that the factors set out in the estates case law support the reasonableness of the compensation sought. There is no issue that Linda and Ted provided great assistance in managing the financial affairs of Wayne and Isabel. The accounting analysis provided reveals that the financial affairs were handled meticulously and honestly. The large financial portfolio grew in value and was well managed. It would have taken considerable time and effort to manage the portfolio, even if Linda and Ted were not engaged in the actual investment decisions.[xii]

Finally, although there is no statutory framework for the compensation of services provided under a Power of Attorney for Personal Care, case law provides an opening for the claiming of compensation for acting as attorney for personal care.  Justice Di Luca assessed the range of services provided by Linda and Ted over many years, and, after considering Isabel’s and Wayne’s financial means and the impact the services provided had in terms of Isabel’s and Wayne’s independence and dignity, found that the amount sought by Linda and Ted was reasonable and proportionate in the circumstances.[xiii]

This case demonstrates the work involved in acting under a Will, Continuing Power of Attorney for Property and Power of Attorney for Personal Care.  Attorneys for property and personal care are tasked with providing various services that can have a large impact on the grantor of such documents’ life.[xiv]  An estate trustee, in carrying out the testator’s wishes, impacts the lives of the beneficiaries, who are generally people who meant something to the deceased.

Overall, to quote Justice Di Luca, “[u]nlike many applications to pass accounts, this is a ‘good news’ story.”[xv]  Linda and Ted approached their roles as estate trustees, attorneys for property and attorneys for personal care with integrity and care.  In doing so, they had a positive impact on the lives of Isabel and Wayne, earning the compensation that Isabel encouraged them to take.

[i] It is possible for these powers to be limited in the Continuing Power of Attorney for Property.

[ii] The “testator” being the person executing the Will.

[iii] The “grantor” being the person executing the Continuing Power of Attorney for Property or Power of Attorney for Personal Care, as the case may be.

[iv] 2019 ONSC 2790 [Daniel].

[v] Ibid at para 2.  At paragraph 5 of Daniel, Justice Di Luca states that Isabel Daniel provided an affidavit through her long-time counsel in which she indicated that she felt the proposed compensation was reasonable “having regard to [Linda’s and Ted’s] ongoing commitment, time and devotion expended to ensure that the needs and wishes of [her] late husband and [herself] were attended to in the most compassionate and attentive manner.”

[vi] Ibid at paras 3, 8-11, and 14.

[vii] Ibid at para 12.

[viii] Ibid at paras 12-16.

[ix] Ibid at paras 21 and 22.

[x] Ibid at para 23.

[xi] Ibid at para 24.

[xii] Ibid at para 25.

[xiii] Ibid at paras 26-29.  The material provided by Linda and Ted in support of their application for compensation is noteworthy.  Although they did not have explicit dockets of their time, they did provide affidavits detailing the services they provided during the relevant time period and were able to provide an estimate of the type and frequency of the services they provided.  They also retained the services of a licensed paralegal, Certified Case Manager and Certified Canadian Life Care Planner employed in the personal injury field, who is engaged in preparing reports relating to cost of care issues and who was able to estimate the rough value of the services provided by Linda and Ted.

[xiv] It should be noted that Powers of Attorney for Personal Care take effect once the grantor of the attorney for personal care is no longer capable of making personal care and treatment decisions for herself or himself.

[xv] Ibid at para 1.

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