May 5, 2021
If you want to avoid having your estate consumed in lengthy and expensive law suits, you need to take care that your intentions are clear. Sometimes the most important estate planning that you do takes place outside your lawyer’s office. In those circumstances especially, making your intention clear is crucial.
Zachariadis Estate v. Giannopoulos Estate is a recent illustration of this point that went to the Ontario Court of Appeal.
The deceased, Dr. Zachariadis, was in a long term romantic relationship with Despina Giannopoulos. He was estranged from his own adult children. However, he died without a will, so his daughters stood to inherit the value of his estate.
The issue though was what was the value of the estate. Dr. Zachariadis had given Ms. Giannopoulos a bank draft some months prior to his death in the amount of $700,000.00. The only notation on the draft was “Payment to Despina”. At the time, the balance in Dr. Zachariadis’ bank account was $708,531.15, so the bulk of his estate was covered by the draft.
And here is where better planning would at least have made the dispute simpler, since the courts were called upon to determine whether the payment was a valid gift. The Court of Appeal upheld the motions judge who found it to be a gift based upon the facts:
- the couple had been in a relationship for 19 years
- he had previously given her a $50,000.00 cheque which she had never cashed
- she testified that he told her the draft was a gift
- she was a credible witness
- there were no apparent restrictions on the payment.
- the bank ‘s evidence was that the draft purchase appeared to be a “normal banking transaction”
- there was no active concealment by Despina.
In doing so, the judge rejected the argument that factors such as the amount of the draft; the absence of witnesses as to the delivery of the draft; Dr. Zachariadis’ medical condition; and the absence of the word “gift” on the draft constituted “suspicious circumstances”, which in law create a presumption of fraud. Suspicion, as the motions judge pointed out, does not amount to evidence.
Using the word “gift” if you intend to make a gift is a simple and effective strategy. Although the Court of Appeal finds that the word “payment” was neutral in the circumstances, the word “gift” would have removed much uncertainty. Though the daughters might still have sued, their case would have been much easier to rebut if the gift was called a gift.
We do not know why Dr. Zachariadis did not make a will, but if he had done so his lawyer could also have documented the gift.