How disinherited family can end up with estate assets

Most people will leave behind something in their estate when they pass. Most of them have preferences about where those things should go and under what conditions. Yet, the majority of people have no will, let alone appointed someone to act for them to make sure their wishes are honoured. Then there are the “do it yourselfers” who feel they can handle their estate and legacy planning themselves and save money in the process. The problem is that unintended consequences arise when proper, professional advice is bypassed.

A good example is the case of Eismann v. Kuntz, 2018 ONSC 3650.

Seigfried Kunz was born and raised in Germany where he married and subsequently had one child, Petra born in 1962. Seigfried was divorced in 1967 and emigrated to Toronto, Ontario, Canada. He remained a German citizen though he was a resident of Canada. He never remarried nor had any other children. He did return to Germany several times between 1980-89 to rekindle a relationship with Petra which did not flourish. He and his daughter became estranged in 1989 and never saw or spoke to each other again. Seigfried did reconnect with the only other family he had when the Berlin Wall fell. There he found a sister, Ruth, a half-brother Wolfgang and their families in the former East Germany. Seigfried became close to Ruth and her family.

unintended consequences arise when proper, professional advice is bypassed.

After Seigfried died in 2016, police located his sister Ruth, who hired an Ontario lawyer to help her settle Seigfried’s estate. Seigfried had executed 4 testamentary documents during his lifetime. Each one had different instructions for the distribution of his estate. None had appointed an estate trustee or administrator. One key question was; which documents were valid?

Here is a summary of those documents.

The 2000 and 2009 documents were kept together in an envelope by Seigfried in his Toronto apartment.

The parties in court agreed that, “to the extent material, German law and Ontario law are materially identical as regards holograph wills.” Section 6 of the Succession Law Reform Act states that a holograph will is one that is written entirely in the deceased’s own handwriting and is signed at the end. This made it easier to determine the validity of the will. Section 18 of the same Act states that the deceased must have signed “in the margin or in some other part of the will opposite or near the alteration or at the end of or opposite to a memorandum referring to the alteration and written in some part of the will.” This was crucial to the decision on the validity of changes made to the will.

Justice S.F. Dunphy J. concluded that the 2000 will without the subsequent alterations made in it was valid and that the 2009 document operated as a codicil to the 2000 will. This meant that the revocation of the bequest to Petra of the residue of the estate was considered to be valid. It also meant that the dramatic increases in specific bequests to Ruth and her family were invalid.

Here is where the unintended twist occurred. Seigfried had not included instructions as to the distribution of the residue of his estate. This meant that there was a partial intestacy in respect of what would now be a rather substantial residue. Part II of the Succession Law Reform Act prescribes the distribution of property in intestacy. Section 47(1) provides that “the property shall be distributed, subject to the rights of the spouse, if any, equally among his or her issue”.

Petra was awarded the residue as Siegfried’s closest surviving relative, notwithstanding the clear, written desire of her father that she be disinherited.

Estate and legacy planning are not “do it yourself “exercises. Unintended consequences frequently arise when improperly and incompletely done. Engage the services of a wills and estates lawyer who can help you set up a will that expresses what you want to have happen with the assets you leave behind when you pass. Ensure that the documents you put together are periodically stress tested to make sure they continue to do the job they were designed to do. That includes covering off as many scenarios as possible so that your assets go to the people and causes you care about.

? 2018 by peter a wouters

This material is presented for informational purposes only, and is not a legal, tax or investment opinion. The provision of the information contained herein and any oral or written communication regarding the same should not nor is intended to be construed as such. Interested persons should seek retained independent professional advice before acting or foregoing action in relation to any of the matters mentioned herein reflected as of the date published or updated.