Inheritance hijacking occurs when a person or persons steal or receive a part or all an inheritance they are not entitled to receive or is meant for another. Inheritance hijacking is not new, but it appears to be on the rise. There are multiple reasons for the increase in inheritance hijacking, but the two primary reasons are the average age of the populace continues to increase, giving rise to more estates, and money is tighter than ever.
At Northern Law, we have seen two primary examples of how inheritance hijacking occurs. The first, and most common, is when there are multiple beneficiaries to a Will. Usually, this involves siblings, who are named as equal beneficiaries to their parents’ Will. One sibling attempts to obtain ownership of their parents’ various assets, such as being put on title to a residence or being named as a joint owner of a bank account under the guise of avoiding estate administration tax or to assist elderly parents with day-to-day finances. However, once the parent passes, those now jointly owned assets vest to the beneficiary via survivorship and bypass the estate of the deceased, thus cutting out a beneficiary’s share of that asset.
The leading case on the subject is Pecore v. Pecore, 2007 SCC 17, which confirmed a long-standing presumption in favour of advancement and resulting trust over a gift. This presumption puts the onus on the receiver of the asset to prove that a gift was intended. This is a general rule, but it will not apply in all cases, and one must be aware of the intricacies of the relationship between the parties whether it be parent/adult child or otherwise. The civil standard of proof is applicable to rebut the presumptions on the balance or probabilities.
Second, and not uncommon, is for a beneficiary to unduly influence the testator of a Will to remove a beneficiary under that individual’s Will. We see this frequently, again, in matters where there are multiple siblings, wherein if one or more siblings care for a parent in their golden years, they feel entitled to receive a greater share of their parent’s estate. An adult child in this scenario can carry a lot of power over an elderly parent, wherein the testator feels pressured into making a decision out of fear or coercion.
With respect to the second example, undue influence is the improper use of a person’s authority or position, which may be a child over an elderly parent, or convincing a person to do something they would not otherwise do. It can happen when someone, such as a family member, caregiver, or friend, convinces an elderly or ill individual to amend their Will or estate plan in their favour or to the exclusion of another. This method of inheritance hijacking can be difficult to detect at the time of occurrence and challenging to prove. One can keep an eye out for things such as:
- A known change to a long-standing Will;
- A change to a Will to remove a beneficiary;
- Large gifts provided to a party, which decreases the value of the estate and the residue to the beneficiaries of a Will;
- A change in the relationship between the testator and an interested party;
- Capacity issues, including signs of early onset dementia or Alzheimer’s disease;
- A breakdown in communication between siblings, which is out of the ordinary.
One way to ensure inheritance hijacking does not occur is letting family members or trusted individuals, including your lawyer, know your intentions. It is best to speak to multiple individuals to confirm your estate plan. Another method to prevent inheritance hijacking from occurring is updating your estate plan, including your Will, after major life events. These events may include, but are not limited to: a marriage, having children, or the death of a beneficiary or executor of your current Will.
Northern Law LLP can assist with estate planning to secure your estate. We also frequently litigate estate matters involving family. If you have concerns regarding inheritance hijacking or wish to discuss your estate plan with us and how you can protect your estate, please do not hesitate to contact us today at 705-222-0111 or info@northernlaw.ca.