What does the law say about your autonomy to make gifts, whether during your lifetime or on death under your will? When will the law intervene, and when will it step aside?
This issue is of increasing importance in our aging society where many of us will live well into our nineties, and often with diminished capacity. How do we ensure that personal autonomy is respected and that ageism and a too paternalistic approach does not erode personal autonomy to make decisions that sometimes our closest family, friends and professional advisors may not agree with as being good ones and, in fact, think are very bad ones?
At the same time, there is the reality of financial and emotional abuse of many senior citizens, which is often hidden, insidious, and difficult to prove, and only often comes to light too late.
Estate of William Robert Waters v Gillian Henry
Some of you may have read about a recent Ontario case that received much media attention: the Estate of William Robert Waters v Gillian Henry.
Here is a detailed article about that case, which was published by Toronto Life Magazine (April 2024), “The Professor, the Caregiver and the Missing $30 Million.”
Here is the actual court decision: Estate of William Robert Waters v Gillian Henry et al., 2024 ONSC 4190.
The facts read like a Netflix drama. William Waters was a wealthy Torontonian and professor of finance and economics at the University of Toronto, but also a successful entrepreneur and businessman who made over $50 million in various ventures involving computer financial modelling.
When he died at age 88, most of his estate had been depleted during his lifetime by transfers of cash and property of over $30M to his bedridden wife’s personal support worker, Gillian Henry, which occurred over 10 years before his death, and with whom he had a secret romantic relationship. Gillian Henry used the funds to buy real estate, cars, trips, clothing, and jewelry.
William Waters’ estate made various claims against Gillian Henry to recover the funds for his estate, under which 23 charities were capital beneficiaries after his wife’s death. The couple had no children.
The claims included for a resulting trust and that the money was given to invest for him, undue influence, fraud, unjust enrichment and “unconscionable procurement”, which is an arcane legal doctrine seldom used which can allow a court to void a transfer of property including gifts if the recipient actively procured the transfer and the transferor did not fully understand its effects, nature and consequences. A court in reviewing the transaction can conclude it was not fair, just, and reasonable under the circumstances.
The Court’s Decision
In this intriguing case, what did the court decide?
Were the transfers to Gillian Henry loans or funds to be invested for William Waters to be repaid to the estate? Were they improper transfers the court should make void and order the money to be returned to the estate? Or were they valid gifts freely provided by William Waters to Gillian Henry for her to keep?
On the facts, Justice Callaghan found that William Waters had many professional advisors with whom he was in regular contact, who considered him still very sharp and able to appreciate the advice given and provide instructions.
The court found that the money given to Gillian was provided within an intimate relationship which informed why William Waters wanted Gillian Henry to have the money, that he authorized every transfer, and that there was no credible evidence that he had any ownership interest in what was purchased or that he had any expectation that the money would be repaid. In conclusion, the court found that the transfers were all gifts, except for one property.
The court found that regarding these gifts, there was no undue influence, and that William Waters was strong-willed and controlled his finances. Justice Callaghan stated that “he acted as he did because he chose to do so” and that “this case was always about recognizing William’s right to do with his money as he chose balanced against the legal presumptions about bargains and gifts.”
An interesting case where the court had to sift through voluminous testimony and facts to come to its conclusion which ultimately supported William Waters’ right to make the decisions he did, notwithstanding how controversial or unpopular they may be to some.
— Margaret O’Sullivan