It’s your funeral, but who calls the shots?

If you have a will, you may have spelled out your detailed wishes for your funeral in the document.  Would you be surprised to know that your personal representative does not have to follow them?  You may have also heard that funeral expenses get paid out from an estate in priority to all other expenses.  So, who actually has legal responsibility for arranging and paying for the funeral?  And what should you keep in mind at the outset when the question of funeral arrangements comes up?

 

Who has the legal duty for funeral arrangements?

In Alberta, it is well-settled that the personal representative named in a will has the sole legal responsibility and authority for making funeral arrangements.  That authority is confirmed by the Estate Administration Act, the Funeral Services Act, the Cemeteries Act and their respective regulations.  That means the personal representative does not have to follow funeral instructions in a will, though the vast majority do.

If there is no will or the personal representative is unavailable or refuses to give burial instructions, then the law gives the following people priority: spouse, adult child, parent, guardian, increasingly more distant relatives, with the Minister of Human Services being a decision-maker of last resort.  Where there are two or more individuals of equal rank, the right devolves on the eldest.  The Court has the discretion to vary the order of priority among all of the above categories.

 

Who has to pay for the funeral?

In Chernichan v Chernichan (Estate), 2001 ABQB 913, the Alberta Court of Queen’s Bench confirmed that the deceased’s estate has the primary responsibility to pay for the funeral expenses.

In that case, the deceased’s brother paid for the funeral out of his own pocket.  The personal representative used estate funds to pay out other estate debts before paying the brother back for the funeral expenses, leaving the estate insolvent.  The brother claimed that he should have been paid back in priority to all other creditors, including Canada Revenue Agency.

The Court conducted an in-depth review of the law and concluded that where the estate is insufficient to cover the funeral expenses, a secondary responsibility falls on the person responsible in law for supporting the deceased.  Therefore, a surviving spouse, adult interdependent partner or a parent of a minor child may have to make up the shortfall.  The residual responsibility to pay for the funeral rests with the Minister of Human Services.

In Chernichan, the Court also held that funeral expenses are entitled to a priority over other estate administration expenses and liabilities, except for the expenses of proving a will.  The personal representative, being the deceased’s wife, was ordered to pay the expenses to the brother.

 

What is a reasonable funeral?

The liability of the estate, the personal representative, and the responsible survivors for funeral expenses is limited to reasonable expenses.  There is no universal answer as to what is reasonable.  The analysis will depend on the deceased’s station in life, size of the estate and cultural background.  For example, in Lopushinsky Estate, 2015 ABQB 63, the Court held that a $26,000 funeral was reasonable given the deceased’s highly respected status in his community (the funeral required overflow seating and a video link to the service because of the number of attendees), the fact that he spent a similar amount on his wife’s funeral a year before, and the size of his estate.

 

Things to keep in mind at the start

On the planning side, pre-paid funeral arrangements may decrease family disputes about the type of funeral you want and will make the job easier for your personal representatives.  They also eliminate the risk of there being inadequate assets to pay for the funeral.

Whether you are an executor or a family member who is making funeral arrangements, always consider the reasonableness of the cost of the funeral in light of the deceased’s station in life and expressed wishes before making the final arrangements.

While personally paying the funeral expenses may be a generous gesture, one would be well advised to consider the likelihood that estate assets will be sufficient to reimburse those expenses.  Finally, ensure that your intentions with respect to the payment are documented at the outset – is the payment meant to be a gift or simply a short-term loan to the estate?

Funeral arrangements have the potential to set the tone for the rest of the estate administration.  Taking care to make the right decisions at the start is important and personal representatives and family members should not rush into decisions during the difficult and emotional time immediately following a loved one’s death.

 

Let us know if you have any questions or comments and thank you for reading.

-Predrag

My last will and textament

What would you look for in a document to determine if it was a legally valid will?  An Australian man’s estate recently made headlines when the Queensland Supreme Court admitted an unsent text message into probate as his valid last will.

The deceased created the following text message on his cell phone shortly before he committed suicide:

“Dave Nic you and Jack keep all that I have house and superannuation, put my ashes in the back garden with Trish Julie will take her stuff only she’s ok gone back to her ex AGAIN I’m beaten . A bit of cash behind TV and a bit in the bank Cash card pin 3636

MRN190162Q

10/10/2016

My will”

The message was addressed to the deceased’s brother and purported to leave the estate to him and a nephew.  The deceased was also survived by his wife, though the marriage was apparently tumultuous and short-lived, and an estranged son.  The unsent message was found in the drafts folder.

The judge considered the detail of the deceased’s instructions about the disposition of his assets (like providing the PIN to his bank account, location of cash).  Other evidence, such as the deceased’s strained relationship with his wife and estranged son, contrasted with a close relationship with his brother and nephew, the fact his phone was found next to him and that he concluded the text with the words “My will” further solidified the Court’s analysis that he intended the text message to operate as his will.  You can read the full Court decision here: Re Nichol, Nichol v Nichol [2017] QSC 220.

Could this happen in Alberta?

A simple text message like the one in the Nichol estate would likely not qualify as a valid will in Alberta.  However, like the Queensland law at the centre of that case, Alberta law gives the Court leeway to validate a document that does not comply with all of the requirements for a valid will if there is sufficient evidence to convince the Court the deceased intended the document to act as his or her will.

To start, how do you make a valid will in Alberta?  The Wills and Succession Act requires a will to be:

  • in writing;
  • signed by the testator;
  • in the presence of two witnesses;
  • both of whom are present at the same time; and
  • each of whom signs the will in the testator’s presence.

Alberta law also allows “holographic” wills: wills which are written entirely in the deceased’s handwriting and signed by the deceased, in which case no witnesses are required.

If the deceased doesn’t comply with those requirements, the Court could consider two sections of the Wills and Succession Act to validate the document:

  • section 37: the Court can dispense with the formalities if satisfied on clear and convincing evidence that the writing sets out the testamentary intentions of the testator and was intended by the testator to be his or her will. One thing the Court cannot dispense with under this section is the requirement of a signature.  Therefore, it would be of little help with a text message; or

 

  • section 39: the Court could rectify a document by inserting a signature only if satisfied that the deceased intended to sign the document and give it effect as a will, but failed to do so because of “pure mistake or inadvertence.” This is meant to be used in narrow circumstances, and given the facts in Nichol, likely couldn’t have saved the text message without more – on those facts, the failure to sign was probably not a result of mistake or inadvertence, but a deliberate decision.

These powers are relatively new in Alberta and have not been widely considered by our Courts.  While there are a handful of reported decisions, none have considered the level of departure from the formalities found in Nichol.  However, we will likely see attempts to push the boundaries in the years to come as people change the way they manage and create their legal documents.

Contact us if you are unsure whether you are dealing with a proper will.  Even if it doesn’t have all of the formalities, an Alberta Court may recognize it as a valid testamentary document, which may drastically alter the administration and distribution of an estate.

Thank you for reading,

-Predrag

PS – Our friends at Hull and Hull also recently wrote about this case from an Ontario perspective.

(Don’t) live together, love together

A frequent area of estate litigation involves claims by adult interdependent partners against the estates of their deceased partners.  An adult interdependent partner is roughly the Alberta equivalent of a common law spouse, but may include other types of relationships.

To qualify as an adult interdependent partner, two people must cohabit in a relationship of interdependence continuously for at least 3 years, unless they have a child together or have entered into a written partner agreement.  Where there are no children or agreements, one of the first things we will want to see is evidence of the length of cohabitation.  This is a complex analysis which requires more than a review of the couple’s address history during the last three years of the deceased’s life.

In the recent case of Wright v Lemoine, 2017 ABQB 395, the Alberta Court of Queen’s Bench confirmed that cohabitation does not necessarily mean living under the same roof.  Courts in Ontario, British Columbia and even in Tasmania have arrived at the same conclusion.

In Wright v Lemoine, Ms. Wright sought adult interdependent partner support from Mr. Lemoine.  One of the key issues was whether the couple lived together continuously for at least three years. Due to his work schedule, he was frequently away in remote locations.  When he was not working, the couple spent time together in hotels or at his home in Saskatchewan.  Shortly after the relationship began, Mr. Lemoine purchased a trailer in which the couple resided when he was in town.  Sometimes Ms. Wright joined him at his work locations and they went on several extended vacations together.  When Mr. Lemoine was away, Ms. Wright stayed with her mother.  In the three years prior to their separation, 26 days was the longest time the two spent apart.

Mr. Lemoine asserted that as a result of frequent interruptions of their co-residence, the parties did not cohabit continuously for three years.  He also pointed to the fact that Ms. Wright kept her mother’s residence as her mailing address for the duration of the relationship.

Following an extensive review of the evidence and the existing case law, Justice Nixon held that the couple cohabited for the necessary period, and confirmed that the requirement for cohabitation did not equate to co-residence.  The judge reiterated that a flexible approach was necessary and that the couple’s intention was a key factor for determining whether they have cohabited for the purpose of the legislation.  Mr. Lemoine’s unique work schedule was not enough to displace the couple’s intention to live together when he was back from work.

A different illustration of the same principle can be found in this very recent decision of the Full Court in Hobart, Tasmania.  In that case, the deceased and his alleged common law spouse had not cohabited for much of their 23-year relationship because the deceased was a hoarder and his spouse had found it unbearable to live in the same residence as him.  Nonetheless, there was sufficient evidence that they saw each other almost every night, that they had an exclusive sexual relationship and were considered in the community as a couple.  The judge concluded that despite the daily separation, the relationship was significant and continuous for the amount of time required by the relevant legislation, such that the spouse was entitled to the whole of his estate.

In Alberta, a finding that a person was the deceased’s adult interdependent partner could have a significant impact on an estate.  It may entitle the surviving partner to a significant portion of the estate if there is no will, a right to make a claim for maintenance and support even where there is a will, and the priority to administer the estate.

We have experience with analyzing the required elements of the legislation together with the factual matrix to advise whether someone meets the legal definition of an adult interdependent partner.  Feel free to contact me if you think someone’s status may have an impact on an estate you are dealing with.

Thank you for reading!

-Predrag (Peter) Tomic

You can ask for advice and directions

Acting as an executor or personal representative is a challenging job.  A personal representative is expected to follow the terms of a will, trust document or Court order and to do so prudently and competently.  Sometimes, the testator or the settlor of a trust adds to an already difficult job by creating an unclear will or trust document which leaves the personal representatives guessing as to the deceased’s true intentions.  Other times, what the beneficiaries want conflicts with the instructions in the will or trust.  Since personal representatives may be personally liable for decisions made in the course of their administration, they should ensure they are making the correct decision.

Fortunately, a personal representative who is faced with an unclear and confusing document or a situation not contemplated by the document can seek advice and directions from the Court.  Generally, if the Court provides directions and the personal representative follows them, they will not be personally liable even if the decision leads to a loss to one or more beneficiaries.

In Alberta, authority for seeking the Court’s advice and directions is found in several statutes.  Personal representatives can turn to the

  • Estate Administration Act, which allows a personal representative to apply to the Court for advice and directions on any question respecting the management or administration of an estate.  The personal representative is shielded from liability if he or she follows the Court’s direction on the particular issue.

 

  • Surrogate Rules, which give the Court a very broad discretion to consider applications for directions by personal representatives or persons interested in the estate regarding practice, procedural or other issues and questions and ways to resolve them and “any other matter that may aid in the resolution or facilitate the resolution of a claim, application or proceeding or otherwise fairly or justly resolve the matter for which direction is sought.”

 

  • Trustee Act, which has a similar provision to the Estate Administration Act, allowing trustees to apply for advice and direction and absolving them of liability when acting on the opinion, advice or direction of the Court as long as there is no fraud or misrepresentation by the trustee.

A Court will not make a personal representative’s decision or exercise discretion for him or her.  Therefore, a personal representative should come to Court with a particular plan of action, which the Court can approve, deny or modify.  Most often, the Court will give directions on the steps to be taken to bring about a desired result or to move a matter forward.  However, the Court can also make determinations of fact and substantive rights of one or more parties.  Courts have in the past given advice and directions to:

  • break a deadlock among personal representatives;
  • determine if a particular individual qualifies as a beneficiary;
  • determine if a charitable gift fails where a charity has been incorrectly described or no longer exists;
  • determine if it was prudent for a personal representative to pursue collection of certain assets by way of litigation, or whether it was prudent for the personal representative to use estate assets to defend a claim; and
  • set down litigation plans to ensure that a contentious matter begun under a related Act or under the Surrogate Rules proceeds efficiently and in a timely fashion.

This is not an exhaustive list and the broad discretion given to the Court makes the application for advice and direction a powerful tool to advance the administration of an estate or a trust.

If you are a personal representative in Alberta who needs some clarity on an estate or trust administration matter, Field Law can help.  Do not hesitate to contact me to discuss in more detail: ptomic@fieldlaw.com or 403.260.8511.

Thank you for reading.