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Heartbreak, Hockey and the Quinn Estate

Summer is a wonderful time in Ontario. The sun is shining. People are out and about enjoying restaurants and patios. Aperol Spritz’s are being consumed poolside. Dogs are everywhere…

But not everyone is happy.

Who are these people you ask?

The answer…Hockey fans.

It has been 91 days since the last NHL game was played between the Washington Capitals and the Vegas Golden Knights.

Three whole months without a goal by Connor McDavid …a clean hit by Brad Marchand … or a fight involving Tom Wilson.

Some hockey fans look forward to the summer break, however I like to refer to this time as “sports purgatory” as we anxiously await for a new season to begin.

Growing up in British Columbia during the 1990’s I fell in love with the Vancouver Canucks.

Trevor Linden, Pavel Bure, Cliff Ronning, Sergio Momesso, Gino Odjick and Kirk McLean were my heroes.

And then there was our coach, Pat Quinn (“Quinn”).

The “Big Irishman” as he was affectionately known was the Head Coach of the Vancouver Canucks team that went to the 1994 Stanley Cup final and eventually lost to the New York Rangers in 7 games.

Quinn led the 94’ Canucks on a Cinderella run that came within a Nathan Lafayette crossbar of forcing overtime in game seven. I was six years old and heartbroken (Note: I still have not forgiven Mark Messier).

Standing six foot three, Quinn remained an imposing figure in both the hockey and local Vancouver community. After 20 seasons, 684 NHL coaching victories and a gold medal at the 2002 Winter Olympics, Quinn and his wife Sandra Quinn (“Sandra”) returned from the US to BC where they lived until the date of Quinn’s sudden death on November 23, 2014.

The city mourned as we lost an icon. Streets were named after the coaching legend and a statue was even raised in Quinn’s honor which demonstrated the impact sports leaders can have on a community.

Unfortunately, Quinn’s death has also shed light on the complexity of estate planning for people with assets in the United States and Canada, specifically the province of British Columbia.

The Will and Quinn Family Trust

On April 1, 1996, Quinn executed his Will in respect of his Canadian assets situated in Canada. At the time of his death, Quinn’s Canadian assets consisted primarily of shares in the capital of several private corporations. Subject to the resolution of a particular liability, the value of Quinn’s estate was approximately $750,000.00. Although his Will was prepared by a U.S. attorney, it was executed in British Columbia with all requirements for proper execution for a will observed.

Quinn’s Will however provided that the residue of his Canadian Estate would “pour over” into a U.S. trust, referred to as the Quinn Family Trust.

The Quinn Family Trust was settled on March 4, 1996, prior to the execution of his Will. Quinn executed the trust declaration contemporaneously with the execution of his Will and Sandra also executed a “mirror will” contemporaneously with the settlement of the Quinn Family Trust.

About one year after Quinn executed his Will, certain administrative provisions of the Quinn Family Trust were amended to ensure that it would be considered a Qualified Domestic Trust for U.S. tax purposes.[1] Under the Quinn Family Trust, the settlors, namely, Quinn and Sandra, were the first beneficiaries. Following the death of the surviving settlor, the beneficiaries were their children, Valerie and Kathleen (or if either daughter has predeceased both settlors, that daughter’s issue, and if that daughter has no issue, to her surviving sister).

A “pour-over” clause is generally viewed as “a dispositive provision directing that all or part of the estate should be added to the corpus of an existing trust, the terms of which were not reiterated in the will itself”[2] The terms of the Quinn Family Trust allowed Quinn and Sandra to amend it. Because they could amend the trust, the beneficiaries could be changed without compliance with the requirements of section 37 of British Columbia’s Wills, Estates and Succession Act, S.B.C. 2009, c. 13 (“WESA”).

As a result, on March 9, 2018, Justice Funt of the BC Supreme Court declared the “pour over” clause in Quinn’s Will invalid. He did so on the basis that the gift of the residue could not “pour over” to be held by the trustees of the Quinn Family Trust on the terms which existed at the time the Will was executed given that the trustees were obliged to follow the terms set out in the amended Quinn Family Trust.[3]

Justice Funt also determined that the clause was not “cured” by section 58 of WESA and the result was that the residue of Quinn’s estate would be distributed on intestacy pursuant to part III of the statute.  The BC Supreme Court’s ruling in the Quinn Estate highlights the need to get specialized tax and legal advice with respect to implications on both sides of the border. Accordingly, it may be prudent to retain local counsel with niche expertise to deal with such matters.

[1] https://www.allaboutestates.ca/the-toronto-maple-leafs-and-pour-over-clauses-have-something-in-common/

[2] lan N. Polasky, “‘Pour-Over’ Wills – and the Statutory Blessing” (1959) 98:10 Trusts and Est. 949.

[3] Supra note 1.

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