Daughters of Toronto philanthropist and Holocaust survivor fighting over $13M difference in their inheritance

As a boy, was the youngest of a large family in Czortkow in eastern Poland, site of a famous failed 1940 rebellion against Soviet troops then still allied with Hitler’s Germany. At the end of the war, after a long stint in hiding, he alone in the family had not died at the hands of the Nazis.

When he did die in 2012 aged 86, he was a massively rich real estate mogul and philanthropist, with a fortune well over $100 million and two daughters, Edie and Myra, to whom he wanted to bequeath everything equally, his wife Sarah having predeceased him.

Today, four years later, that legacy remains bitterly contested, and a new decision of Ontario’s top court lays bare the long-standing acrimony between Edie and Myra, and their duelling claims of dementia, financial coercion, and children used as legal pawns.

A lower court decision in 2014 seemed to put the case to rest. It confirmed Neuberger’s wishes to split equally the fortune he made in construction and property deals. And by blocking her challenge of the will, it dismissed Edie’s claim that her father was incapacitated by dementia when he was manipulated into major financial decisions.

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That 2014 ruling also barred Edie’s son Adam from bringing his own challenge to his grandfather’s will, on the grounds he was a “straw man,” participating only to support his mother’s position, with his legal fees paid by his parents.

Both those decisions were flawed and have just been overturned by the Ontario Court of Appeal; so the litigation is likely to continue.

At issue is how Chaim Neuberger divided his estate between Edie, who acted for his business as a lawyer, and Myra, whose husband worked for Neuberger’s main company.

In effect, Neuberger split his main company in 2004, with one part for each daughter, known as a “butterfly” transaction. Edie claims the value of those companies fluctuated over the following years, controversially as his dementia progressed, such that the division was unequal. He finalized the attempt at equal division in a 2010 will, with an estate freeze designed to protect his legacy against a declining economy. The daughters were named co-trustees.

The total difference between the status quo and what she seeks, Edie claims, is about $13 million, roughly 10 per cent of the fortune. With the expense of pursuing massive multi-party litigation to appeals court and back, what is at stake might be lower than that. The sisters are joined in the case by their adult children; Edie has five, Myra three.

Edie claims her father did not have the mental capacity to make his 2010 will, and that he had been manipulated into business decisions he was legally incapable of making by Myra’s husband Joel York, Chaim’s brother-in-law and business partner Harry Sporer, and Sporer’s son-in-law Michael Lax.

Edie acted for her father’s business as a lawyer, and claimed he started losing his mental capacity about 2009, just as she was being excluded from daily operations by new lawyers hired by her father’s management team.

The tricky bit is that Edie did not challenge the 2010 will until more than a year after Chaim died, after she had paid the income tax, one of the key functions of a trustee.

The lower court judge held this late challenge against her, as indicating her acceptance of the will. She had been questioning his mental capacity for years, while also acting on his legal instructions. For example, she negotiated cheques for him in the summer of 2011, after she had written to other lawyers about his advancing dementia.

She also acted several times after his death as co-trustee under the authority of the 2010 will. For example, she inquired about his season tickets to the Maple Leafs, told a cemetery to remove his nickname “Mundek” from his headstone, instructed a lawyer and sought official health records, all as a co-trustee of his will.

As the lower judge put it, “Edie should have moved with haste if she truly wanted to pursue a will challenge. She did not do this.”

But the appeal court said it was wrong to hold this late challenge against her, as it would put any trustee in this kind of situation in an impossible bind — either bring a premature challenge or risk being seen to concede the validity of a will. It also accepted the evidence of Edie’s son Adam that he decided to join this case independently, and as a person with an interest in the outcome, it was a legal error to bar him as a “straw man.”

Chaim Neuberger’s dementia in his final months was never in serious doubt, and it is common ground that this made him vulnerable. In 2011, for example, five months after he made the 2010 will, he was forbidden by his lawyer from donating $20 million to Bar Ilan University in Tel Aviv, after a fundraiser elicited a promise from him that caused his caregiver to become suspicious.

In 2008, in one of his last major acts of clear-minded philanthropy, he donated $10 million to create the Sarah and Chaim Neuberger Holocaust Education Centre at the United Jewish Appeal campus in Toronto.

National Post

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