Henson Trusts

A Henson trust (sometimes called an absolute discretionary trust) is one designed to benefit disabled persons by protecting ensuring that the assets of a disabled person can still be used to their benefit without compromising their right to collect government benefits and entitlements. This is done by ensuring that the trustee’s discretion in the operation of the trust is absolute, even to the extent of whether or not the trust assets are used (and, if used, to what extent) to provide assistance to the beneficiary. Such a power means that the assets do not vest with the beneficiary and thus cannot be used to deny means-tested government benefits. There are also possible income tax relief elements because of taxation at a lower marginal rate. They are also sometimes used to shield assets from matrimonial division in case of divorce of the beneficiary. In most cases, the trust assets are immune from claims by creditors of the beneficiary. Henson trusts can operate as either living trusts (i.e. for the benefit of the beneficiary when you are still alive) or as a testamentary trust (i.e. for the benefit of the beneficiary after your death).

Further information can be found in this paper:
"What Can You Do To Enhance The Quality of Life For a Family Member with a Disability: Consider a Henson Trust",
a document produced by Reena, (“a non-profit social service agency dedicated to integrating adults with developmental disabilities into the mainstream of society”) and The Law Foundation of Ontario:
"What Can You Do To Enhance The Quality of Life For a Family Member with a Disability: Consider a Henson Trust".
a document produced by Reena, (“a non-profit social service agency dedicated to integrating adults with developmental disabilities into the mainstream of society”) and The Law Foundation of Ontario:
Henson Trust

Unjust Enrichment

Unjust enrichment is a doctrine for the compensation of one who has unjustly received a benefit from another in a manner that the law will correct. It is a principle of “equity”.

Thomson-Carswell’s Dictionary of Canadian Law (3d ed) neatly summarizes the doctrine:

“ An action for unjust enrichment arises when three elements are satisfied: (1) an enrichment; (2) a corresponding deprivation; and (3) the absence of a juristic reason for the enrichment.”

Each of these is required for the doctrine to be applied. Only when they are proven is the action established and the court able to grant compensation; from there the court goes on to determine what remedy will be applied: monetary compensation or a judgment finding a “constructive trust” which will result in an order that the claimant has an interest in or title to property.

An example of unjust enrichment would be two companies working together without a written contract on a building project where Company A owns the land and Company B contributes labour and building supplies. Co.A refuses to pay Co.B, so where is B’s remedy? It can allege an oral contract, yes. But it can also allege that Co.A is unjustly enriched. Co.A has been enriched to the value of the contributions in labour and supplies and through any increase in the value of the property. Co.B has suffered a corresponding deprivation, in that it has lost those contributions and the profit (the increase in value) which would have been provided if those contributions had been used elsewhere. Lastly, there is no juristic reason for what happened. If, for example, Co.A had been owed $1m by Co.B and B’s deprivation was roughly the same, Co.A could claim a set-off for that debt, which could be a juristic reason which may be upheld by the court.

For further reading and a discussion of the principle, please see the Duhaime page on unjust enrichment.

Varying a custody access order: When you can and when you can't

Is there a situation where parties are blocked from seeking variation of a custody or access order? Yes. Elizabeth Ramsden in LAO LAW’s The Bottom Line: A weekly summary of new cases in family law (November 11, 2009) summarizes this issue:

Even where both parties request a variation of a custody or access order, the court is without jurisdiction to vary the order unless it makes an explicit finding of a material change in circumstances since the previous order was made. A material change is one that:
(1) amounts to a change in the condition, means, needs or circumstances of the child and/or the parents’ ability to meet the child’s needs;
(2) materially affects the child; and
(3) was either not foreseen or could not have been reasonably contemplated by the judge who made the original order.
If an applicant fails to meet this threshold requirement, the inquiry can go no further: Persaud v. Garcia-Persaud, 2009 ONCA 782 (Laskin, Gillese and Juriansz JJ.A.), ¶ 4, [citing see Gordon v. Goertz, [1996] 2 S.C.R. 27, at ¶ 13 and Litman v. Sherman (2008), 52 R.F.L. (6th) 239 (Ont. C.A.)].

As the Court of Appeal noted, "[t]he matter is jurisdictional and a court must make a finding of a material change in circumstances even when, as here, both parties request a variation." [Emphasis added.]

The Court went on to note that where there is “significant conflict in the affidavit evidence of the parties … a variation motion cannot be properly determined on affidavit material. … [R]esolution of conflicting evidence on critical matters requires a trial of the issues, in which viva voce evidence is called. See this court’s decision in Schnarr v. Schnarr (2006), 22 R.F.L. (6th) 52”.

Living Wills: The Centre for Bioethics

The University of Toronto Joint Centre for Bioethics maintains a website with information, education and precedent materials on living wills. The website provides living will information for general living wills, cancer living wills and HIV living wills. Registration and sign-in (triggering a disclaimer) is required to view or download these precedents.

"Six Ways to Stall Estate Planning"

I recently came across an interesting article, "Six Ways to Stall Estate Planning" [PDF] by Thomas Junkin, Senior Vice President of the Fiduciary Trust Company of Canada. In it he examines six mental roadblocks we run into, internal barriers blocking us from our estate planning. While the short summary below is useful it is no substitute for reading the whole two-page article [PDF]; it contains much that anybody who must ponder estate planning (which is pretty much everybody) should know.

1. "I am too busy to worry about estate planning right now."
Don't fall into the trap of thinking that estate planning is neither important nor urgent, Junkin urges: while proper estate planning does take time it is necessary to deal with its complexity immediately. This is especially important in light of the fact that estate planning isn't an exercise in fill-in-the-blanks will preparation, especially in this era of blended families, rapidly changing family law rules and increasingly complex potential decisions.

2. "Thinking about death, especially my own, is frightening."
Yes, it is, no question about it, but it need be faced. That's why I always open my presentations on wills and estates planning [PDF] with this:
Junkin wisely suggests that you make estate planning an intellectual exercise rather than an emotional one. It is difficult, because thinking about executors, beneficiaries and guardians for one's children is an emotional issue. But properly structuring the planning makes it easier to deal with it.

3. "I am confused and intimidated by the complexity of estate planning."
Junkin cautions against falling into either of two extremes: being so disinterested in the fine points that one doesn't proceed, or being so details-oriented that one seeks to become an expert before proceeding. I have been an advocate for some years of detailed estate planning questionnaires which allow people to move through their process at a steady, measured pace which they can adjust to their own comfort level.

4. "My family relationships are strained."
"Awkward family situations lead to procrastination in two ways: Fear of confrontation with your family members, and fear of discussing potentially embarrassing family matters with someone outside the family." Junkin and I are in agreement on the importance of using the skills of your estate planner to help you resolve these emotional dilemma: working with somebody who will help you through these difficult decisions makes those problems solvable.

5. "I think estate planning must be very expensive."
It doesn't have to be expensive, but it will cost money to do properly. It's baffling to many lawyers that people who will not hesitate to spend $1,500 to fix a broken head gasket on their car will balk at spending $400.00 for properly done wills and powers of attorney. You can always take a taxi if the car doesn't work; you can't raise yourself from the dead to retroactively do all of the things for your family that you should have done when you were alive.

6. "I don’t know what I want to do with my estate."
This is where a estate planning in cooperation with your solicitor is vital. Much of the uncertainty comes from not knowing where to begin: many people don't even know the questions to ask, and it's the questions that provide the answers. Find a solicitor who will work through the whole process with you and who can provide access to specialized advice and services (financial planners, etc.) where required for the more sophisticated estates.

Mr. Junkin invites readers to go to Fiduciary Trust's Perspective library and browse their past articles and download copies.

Return of the Corvée?

Most of us sat through history lessons on the seigneurial system in New France. (History was very badly organized in the Ontario curricula in the 1970s and early 1980s and so I had to take it three times before Grade 10!) In those classes we became familiar with the term "corvée", which is "labour, often but not always unpaid, that persons in power have authority to compel their subjects to perform". They key words, naturally, are "unpaid" and "compel". These words came to mind today as I sat through my Law Society webcast of The Annotated Retainer Agreement.

Ms. Sharon Shore of Epstein, Cole, (a very respected Toronto family law firm) gave a presentation on retainers in family law cases. One of the things that she has noted is that courts are increasingly requiring lawyers in family law cases to stay on the record and continue to represent their clients for further stages, long past the time when the client has paid -- or has the ability to pay -- the lawyers's fees. Ms. Shore noted that she had recently seen a case where a lawyer had to stay on the record for an additional two months and perform all the work to be done during that time. While she did not say so specifically one must concede that it is unlikely that the lawyer in that case will ever see payment for all that work.

Lawyers often have to deal with the conflicting demands on them as professionals on the one hand with being business people on the other. This problem often takes quite literal form as the caselaw in assessment cases (where the quantum of a lawyer's bill is examined) and professional liability cases are often in direct conflict. One assessment case may say that in Situation X a lawyer can't collect for making a judgment call to proceed with Action Y because it wasn't part of the retainer agreement and the client can't be forced to pay for something that the lawyer independently thought was in the client's best interests. However, a solicitor's negligence case may have a holding that in a same or similar Situation X the lawyer was obliged to perform Action Y because it was necessary for the client and that the duties incumbent upon a professional transcend the usual "no pay no work" underpinning of a normal commercial service transaction. These dilemmas are usually resolved by lawyers' governing bodies, insurers, courts and assessment officers in favour of the client. (The myth that judges and lawyers protect other lawyers is just that: a myth. It is rather closer to the truth to say what one lawyer attending the session said: that the lawyers are seen as a source of fiscal indemnification for the mistakes of others. The reader will thus start to get some small idea of why law is listed as a "disabling profession" in the book of that name and why they suffer higher burnout, suicide and alcoholism rates than the general population; having to square a circle under great stress and externally imposed demands will do that.)

It is a given that the court processes are becoming unaffordable and that access to justice is a vital and indispensable necessity for a civilized and complex society. I do have profound concerns, though, about a system which responds to problems created jointly by its own structural flaws, governmental under-budgeting, conflicting demands, increasing complexity and sophistication and information-intensiveness, and, most of all, hugely increased public demand by simply demanding that lawyers work for free. Nobody is demanding that the judges work for free, or the court clerks, or the expert witnesses, or the doctors, psychologists or counsellors, or court reporters or process servers ... of all the people being paid to be in a court only the lawyers can be and are arbitrarily deemed to be available without charge.

The problems of the court system are very large and demand immediate attention, but telling lawyers and lawyers alone among all the involved professionals that their need to be paid for their time and effort is now an optional extra is a cop-out, and a highly selective and hypocritical one at that.

An update on two previous posts

On February 5, 2009 I did a post on parental alienation. Since then the judge who has written a book on the subject, Harvey P. Brownstone, has done an op-ed piece in the Globe and Mail on this topic.

On March 31 I did a post on some hysterical American prosecutorial reactions to "sexting". Noted criminal defence attorney Eddie Greenspan has since written a piece on the issue.

"Parental Alienation"

In family law, "parental alienation" is the phrase used to describe where one divorced parent systematically turns the children against the other parent. Some Canadian courts have, in the past, viewed the concept with some suspicion; there is caselaw out there where the courts have said, in effect, that trying to bend the children back towards the alienated parent is not in their best interests because the damage is done. There is also caselaw rejecting such conduct as an independent tort where the alienated parent can sue the alienating one. On the other hand there are other cases where the courts have held that the views of the children should not be given too much weight where those views have been created by an alienating parent.

Is this changing? In a surprising and newsworthy decision, one Superior Court Judge has decided that one mother's "consistent and overwhelming campaign, for more than a decade, to alienate [a father's ] three children from him" -- a campaign which was harsh and pathological and included ignoring assessments, the Children's Lawyer, and misuse of the police -- merited the switch of custody from mother to father. (The full text of the decision is very much worth reading, especially the table where alienating behaviours are listed and detailed.) Custody of the children was awarded to the father, even though the mother had been the custodial parent for about a decade:

The three children of the marriage have been alienated from the Applicant [the father] over a long period because K. D. [the mother, the Respondent in this case] is unable to accept that it is in the best interests of the children to have a relationship with their father. She has been given several opportunities to change her behaviour over many years, and refuses to do so. I find that her unrelenting behaviour toward the children is tantamount to emotional abuse... [...] [F]or the children to have any further contact with the Respondent, significant therapeutic intervention is necessary. [...] It is now time for [the father's] and the children’s fates to be free from K. D’s control. She has shown that she cannot be entrusted with it.

This is only one Superior Court decision and has no binding force on other Superior Court judges, who are free to accept it or reject it. Only an appellate-level decision (from the Divisional Court or the Court of Appeal) can bind lower courts. Further, the mother's behaviour in this particular case appears to have been so unbalanced, self-centered and obsessive that it would have been bizarre if the court had not intervened. (The Barbara Kay piece in the National Post, noted below, asks very valid questions about why this behaviour was tolerated for so long and whether any but the emotionally strongest and wealthiest alienated parent could get to this winning point.) It remains to be seen, therefore, whether this holding will be applied in other cases where the facts are less shocking, and whether or not the decision of Justice Faye McWatt will be adopted by other judges in general or approved at an appellate level.


Further Reading:
Full text of the decision in A.G.L. v. K.B.D.
"Mom loses custody for alienating dad: Ruling a 'wake-up call' for parents who use kids to punish ex-partners" - Tracy Tyler, Toronto Star, January 24, 2009
"Brainwashing the kids to spite the ex" - Barbara Kay, National Post, January 30, 2009
"The Cult of Parenthood: A Qualitative Study of Parental Alienation", Amy Baker, Ph.D - [in PDF format, and in HTML format].