Brothers Henry and Simon Kaptyn never got along and their father John should have known they’d never agree when it came to matters concerning his $75 million empire of real estate and investment holdings.
John Kaptyn died May 8, 2007, and the siblings have been scrapping ever since, driving the legal bills up over $6 million, which they demanded their dead father’s estate pay for. That is, until the court cried foul.
John Kaptyn’s story is a cautionary tale of what can happen when family feuds spill into the courts and sadly, it’s not unusual.
Like the Kaptyns, your family’s fight over your money could cost tens of thousands of dollars—if not millions—and you could pay for it all. But don’t worry, you’ll be oblivious because you’ll either be dead or incapacitated while the legacy you’ve spent a lifetime building is frittered away in legal fees.
Feuds over wills and estates are clogging Canada’s courts, driven in part by the enormous wealth of aging boomers, many of them successful entrepreneurs, as well as dysfunctional family dynamics.
The first round
After arriving in Canada in 1954, John Kaptyn built a web of inter-related companies, which either owned property or owned mortgages against those properties in Canada and the U.S. They included a Sheraton Hotel in Richmond Hill and shopping plazas in Florida.
The estate of Toronto entrepreneur John Kaptyn, who died in 2007, has been dwindled by millions in legal fees by feuding heirs. (Shown with wife Doreen)
In 2006, Kaptyn decided to leave the bulk of his assets to his grandchildren. He also wanted his wife to be looked after and to make some charitable donations. The residual would go to his sons.
He left Henry’s children more than $20 million and Simon’s nearly $19 million, based on an intricate calculation of John’s complex holdings. It was as close to equal as possible, short of liquidating everything.
The will was also complicated and in two parts: one for personal holdings, the other for the business. Even more bizarrely, he appointed the battling brothers co-executors. It was a disaster.
“Henry and Simon are unable to work together, in any reasonable and effective way,” Ontario Justice David M. Brown wrote in Jan. 2011, reviewing costs after the brothers continued their battle even though another judge tossed out their case following a two-week trial.
Enough was enough. He slapped down the Kaptyns’ demand for $4.4 million in total costs noting they’d already been given $1.1 million from the first trial.
Instead, he awarded each brother $350,000 in legal fees from the estate and $475,000 to the Ontario Office of The Children’s Lawyer, a legal branch of the Ministry of the Attorney General that represented the grandchildren’s interests. He said if the litigants wanted to continue they’d have to pay from their own pockets.
After months of dragging each other to court and running up millions in legal costs, the brothers were back at square one.
They should have seen it coming. In 2009 Justice Brown rocked legal circles in another, unrelated, decision saying it was time the losers paid their own costs in protracted estate litigation: “Parties cannot treat the assets of an estate as a kind of ATM bank machine from which withdrawals automatically flow to fund their litigation.”
When the gloves come off
Similar battles are brewing all over Canada. The greater the value of the estate, the greater chance of litigation arising as disgruntled beneficiaries claim unfairness or undue influence by siblings or other family members.