Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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No review of the area of dependant's relief is complete without considering the leading Ontario Court of Appeal decision in Cummings v. Cummings (on the application for support, see (2004), 5 E.T.R. (3d) (81) (Ont. S.C) (Cullity, J.); on the appeal to the Ontario Court of Appeal, see (2004) 5 E.T.R. (3d) (97) (Ont. C.A.).

 As a result of Cummings v. Cummings, the Court has forced the Estate's Bar to reconsider matters of support under Part V of the Succession Law Reform Act ("SLRA").

Historically, claims relating to support of dependants under Part V of the SLRA were a fundamental restriction on testamentary power.

As to the question of the power of the Court itself, section 58 (1) of the SLRA confers on the Court the ability to make an order for support where a deceased has not made adequate provision for the proper support of his/her dependants. In McSween v. McSween ((1985), 21 E.T.R. 195 (Surr.Ct.)), Justice Carnwarth sets out the appropriate guidelines in considering "adequate provision for the proper support of a dependant".

The case of Cummings v. Cummings was a most difficult one for the judges to determine as the facts were somewhat unusual and were as follows:

Bruce Norman Cummings (the "deceased") died on June 22 1998, survived by his first wife, Mary Anne, whom he married in 1968, and from whom he was separated in 1986 and from whom he was divorced in 1992.

They had two adult children, Paul, 28, and Elizabeth, 22, both of whom were dependants. Paul was 24 years of age at his father's death and was seriously and permanently disabled to the extent that it would take many times the value of all of the assets of the estate, both real and notional (as clawed back pursuant to section 72(1)(d) of the SLRA), to properly support him for the rest of his life. The deceased was under an obligation to provide support by Court order to Paul.

His daughter, Elizabeth, was eighteen years of age at her father's death and was attending university and was entitled to support under the Court order as well.

The deceased and his second wife, Ruta, commenced living together in 1988 and were married in 1997.

At the time of the divorce from his first wife, the deceased was earning approximately $300,000 per year and his employment was terminated in 1994.

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As to the adequacy of support, section 62(1) of the Succession Law Reform Act provides as follows:

62. (1) Determination of amount - In determining the amount and duration, if any, of support, the Court shall consider all the circumstances of the application, including,

(a) the dependant's current assets and means;

(b) the assets and means that the dependant is likely to have in the future;

(c) the dependant's capacity to contribute to his or her own support;

(d) the dependant's age and physical and mental health;

(e) the dependant's needs, in determining which the Court shall regard to the dependant's accustomed standard of living;

(f) the measures available for the dependant to become able to provide for his or her own support and the length of time and cost involved to enable the dependant to take those measures;

(g) the proximity and duration of the dependant's relationship with the deceased;

(h) the contributions made by the dependant to the deceased's welfare, including indirect and non-financial contributions;

(i) the contributions made by the dependant to the acquisition, maintenance and improvement of the deceased's property or business;

(j) a contribution by the dependant to the realization of the deceased's career potential;

(k) whether the dependant has a legal obligation to provide support for another person;

(l) the circumstances of the deceased at the time of death;

(m) any agreement between the deceased and the dependant;

(n) any previous distribution or division of property made by the deceased in favour of the dependant by gift or agreement or under Court order;

(o) the claims that any other person may have as a dependant;

(p) if the dependant is a child,
(i) the child's aptitude for and reasonable prospects of obtaining an education, and
(ii) the child's need for a stable environment;

(q) if the dependant is a child of the age of sixteen years or more, whether the child has withdrawn from parental control;

(r) if the dependant is a spouse,

(i) a course of conduct by the spouse during the deceased's lifetime that is so unconscionable as to constitute an obvious and gross repudiation of the relationship,
 
(ii) the length of time the spouse cohabited,
 
(iii) the effect on the spouse's earning capacity or the responsibilities assumed during cohabitation,
                                                                                                                        
(iv) whether the spouse has undertaken the care of a child who is of the age of eighteen years or over and unable by reason of illness, disability or other cause to withdraw from the charge of his or her parents,

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One of the first considerations that must be carefully reviewed when considering a support claim is the question of "Who is a dependant?" Section 57 of the Succession Law Reform Act defines a "dependant" as:

(a) the spouse of the deceased,

(b) a parent of the deceased,

(c) a child of the deceased, or

(d) a brother or sister of the deceased,

to whom the deceased was providing support or was under a legal obligation to provide support immediately before his or her death.

Each of the terms "child", "parent" and "spouse" is further defined by section 57 as follows:

"child" means a child as defined in subsection 1(1) and includes a grandchild and a person whom the deceased has demonstrated a settled intention to treat as a child of his or her family, except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody;

"parent" includes a grandparent and a person who has demonstrated a settled intention to treat the deceased as a child of his or her family, except under an arrangement where the deceased was placed for valuable consideration in a foster home by a person having lawful custody;

"spouse" means a spouse as defined in subsection 1(1) and in addition includes either of two persons who,

(a) were married to each other by a marriage that was terminated or declared a nullity, or

(b) are not married to each other and have cohabited,

(i) continuously for a period of not less than three years, or

(ii) in a relationship of some permanence, if they are the natural or adoptive parents of a child.

The definitions provided allow for some scope with respect to a class of dependants.

There are also questions as to the meaning of the requirement that the deceased was "providing support" and the meaning of the phrase "immediately before his or her death".

We will look into these legal questions in the context of the definitions and the case law in future blogs.

All the best, Suzana and Ian. --------

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(a) the deceased's wife or husband;

(b) a brother or sister of the deceased;

(c) a former wife or husband of the deceased;

(d) a child or grandchild of the deceased; and

(e) a person treated by the deceased as a child of the family in relation to any marriage of the deceased.

58. (1) Where a deceased, whether testate or intestate, has not made adequate provision for the proper support of his dependants or any of them, the Court, on application, may order that such provision as it considers adequate be made out of the estate of the deceased for the proper support of the dependants or any of them.

(a) support claims are paid out of testate or intestate estates;

(b) "proper support" is truly a term of art and we will explore it in future blogs;

(c) the "Court" means the Superior Court of Justice;

(d) the claim must be made on Application;

(e) much like "proper support", "adequate provision" is a term of art that needs careful consideration; and

(f) the claim may be paid out of the assets of the estate, meaning estate assets in the usual sense plus any "clawed back" assets referred to in section 72.

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During Hull on Estates Podcast #14, we discussed the recent Supreme Court of Canada's decision in Leskun vs. Leskun dealing with spousal support and considered how it might affect the Estates bar. --------

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During Hull on Estate and Succession Planning Podcast #14, we discussed Powers of Attorney. ------

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Ian has just returned back from spending some time at the Podcasters Across Borders Conference. The Conference was a chance for Podcasters all over the world to get together and talk about their Podcasting experience. There were Podcasters from as far a way as the U.K. and throughout Canada and the U.S.

Friday night was a real highlight as the attendees were treated to a speech from none other than Shelagh Rogers of CBC's Sounds Like Canada. Shelagh was just back from Edmonton where she had her hair cut off in support of her friend who is suffering from cancer. Shelagh did this to raise money for the local Edmonton cancer research centre.

Shelagh is a supportive Podcaster and has her own Podcast. She told the audience about her Podcasting experience and she offered some important advice.

She reminded us to always use a sentence beginning with a subject followed by a verb and an object. She suggested that we use direct and active verbs when we speak and NEVER use terms like "everyone". She indicated that we should talk to the listeners as though they are right in the room with you and not to address an audience generally.

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In an effort to discuss claims against an estate that relate to dependant support and to claims of the surviving spouse, we thought it would be interesting to embark on a mini-series on the topic.

Family Law Act Claims

Subject to a contract to the contrary, section 6(1) of the Family Law Act provides for the right of the surviving spouse to make an equalization claim against the assets of the estate.

Since the 1970s, a general statutory proposition prevails that the value of "family property" should be split up equally when the marriage ends, regardless of which spouse holds to the property.

With the coming into force of the Family Law Reform Act, 1986 (R.S.O. 1980, c.152 (repealed and replaced by the Family Law Act 1986, S.O. 1986, c.4)), Ontario established a deferred community of property regime, which added a new dimension in relation to its impact upon surviving spouses and estates of deceased spouses and other persons who have an interest in their estates.

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At page 43 of the book Naked Conversations, the authors use a classic quote from a great blogger who describes it as follows: "Blogging is word of mouth on steroids".

A well-known legal blogger, Lawrence Lessig, also comes highly recommended in the book. T

he authors point out (at page 87) that they were a bit surprised by the number of lawyers collaborating on blogs, as they perceive the profession as being the most competitive. They illustrated the point by taking the readers to three seeming competitors in the area of patent law.

 Attorneys Stephen M. Nipper, Douglas Sorocco and J. Matthew Buchanan are all patent lawyers with an interest in blogging. Each of them started blogs within three weeks of each other and then discovered each other through the blogosphere. In a short time, they found themselves to be trusted colleagues, exchanging email, talking on the phone and they even started collaborative forms of writing by using software that allows groups to collaborate by editing each other's words on an Internet site. The result of working together produced the creation known as Rethink(ip), a collaborative blog addressing how lawyers and clients should work together on IP issues.

The blogosphere is something that needs to be transparent, open and honest. The authors point out (at page 94) that consultants/lawyers need to get over an inclination to hold their cards close to their chests. They point out that if you are afraid to share ideas, you shouldn't blog.

The authors also point to a classic quote from Walt Disney when someone asked him if he wasn't worried about telling so many people about his ideas. In response, Disney said, "Those were last years ideas".

A classic question that arises when considering the whole concept of blogging is whether or not blogging is in fact marketing? In essence, the authors answer this question by saying that if blogging is your only marketing element, then you are entirely missing the boat. Blogging needs to be part of a marketing plan and not a sole entity. The advantage to blogging is that (page 94-95) blogs help organizations get closer to customers and customers closer to brands. Blogs are a powerful tool that few can afford to ignore. According to the authors, the bottom line is if your target audience wants a blog, you had better blog.

Finally, if you are ready to start to blog, then the authors (at page 172) suggest that you read a bunch of blogs. An easy starting point is to use the blog category in Goggle as a key word search engine. Based on our experience, the keyword searches are all that you need to be able to properly start a searching process.

Best of luck, Suzana and Ian! --------

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In an effort to come back to some thoughts and discussion on legal issues, we thought we would refer to an interesting series of U.S. decisions on the issue of undue influence.

As a general observation, when a court wants to find against the contestant/objector, the court emphasizes that there is a lack of direct evidence of undue influence, and when a court wants to find in favour of the contestant/objector, the court emphasizes that direct evidence of undue influence is seldom available.

For example, in Lipper v. Weslow, 369 S.W. 2d 698 (Tex. Civ. App. 1963), commenting on the four traditional elements of undue influence (susceptible testator, confidential relationship, participation in the will making process, and benefit), the court seemed to point to the relatively mundane facts that were led to try to make the undue influence case, e.g., the attorney-son (who was the alleged undue influencer) had a key to his mother's home. Undue influence was not proved.

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In Chapter 2 of the book Naked Conversations, the authors ask the question, "What is a blog and who cares?" They describe a blog as nothing more than a personal website, with content displayed in reverse chronological order, where new posts are placed at the top of the page instead of the bottom making it easy to see what has changed. In most cases, site visitors can identify the author and can leave comments for others to see. The blogs themselves are generally linked between each other by way of hyperlinks and, once you link to a blog, you are taken to other blogs in the global network called "blogosphere".

As the authors describe (at page 27), the most important aspect of the blog is that it is conversational, and while face-to-face meetings are a preferred route to go in communications, the reality is that it is impossible to make such meetings with every customer. The authors indicate that businesses essentially pursue the conversations because they build trust within their own organizations and with clients, customers and suppliers. The authors describe six key differences between blogging and other communication channels. These differences are as follows (page 28):

1. Publishable. Anyone can publish a blog. You can do it cheaply and post often. Each posting is instantly available worldwide.

2. Findable. Through search engines, people will find blogs by subject, by author, or both. The more you post, the more findable you become.

3.Social. The blogosphere is one big conversation. Interesting topical conversations move from site to site, linking to each other. Through blogs, people with shared interests build friendships unrestricted by geographic borders.

4. Viral. Information often spreads faster through blogs than via a news service. No form of viral marketing matches the speed and efficiency of a blog.

5. Syndicatable. By clicking on an icon, you can get free "home delivery" of RSS-enabled blogs. RSS lets you know when a blog you subscribe to is updated, saving you search time. This process is considerably more efficient than the last-generation method of visiting one page of one website at a time looking for changes.

6. Linkable. Because each blog can link to all others, every blogger has access to millions of other bloggers.

The authors note that you can find each of these elements elsewhere. None, however, in itself is all that remarkable, but the combination of them, plus the two-way Internet communication, is phenomenal. More to come on a later blog ...

All the best, Suzana and Ian. --------

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In Hull on Estates Podcast #13, we discussed costs in Estate litigation. --------

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During Hull on Estate and Succession Planning Podcast #13, we discussed Estate freezes.

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In our May 15, 2006 blog we mentioned the book Naked Conversations by Robert Scoble and Shel Israel. In our view, it is truly one of the very best books on the topic of blogging.

Without a doubt, an important starting point for the whole blogging process is to understand its underlying concepts. Blogging begins with the old-fashioned media known as the printed word. In Naked Conversations, the authors state that the book is all about how and why you should join the conversation of blogging; in addition, the book also tells you how to "blog smart" in order to succeed.

In describing the blogging phenomenon (at page 5), the authors talk about the fact that it is aptly described by the Author-philosopher Arthur Schopenhauer, who once observed that, "All truth passes through three stages: First, it is ridiculed; second, it is violently opposed; third, it is accepted as being self-evident."

The authors believe that, at this point, blogging has passed the denial and most of the anger phase.

Perhaps one of the most telling quotes referred to in the book is at page 7, where the authors' cite G.W.F. Hegel and remind us, as Hegel did, that "Nothing great has been and nothing great can be accomplished without passion."

In the first Chapter of the book, the authors point out that perhaps the most telling acceptance of blogging in the corporate world arises out of the fact that Microsoft has embraced the technology. It is clear that the culture of blogging is huge in Microsoft generally and, as a result, a growing level of transparency has been created through the blogging process. The number of visitors that were attracted to the various Microsoft blog pages as of the founding publication of Naked Conversations in 2006 was somewhere between 10 and 10,000 per day.

We plan to continue a further comment on this great book in future blogs. As for other books about podcasting, we suggest you also consider:

• Podcasting for Dummies: A Reference for the Rest of Us, Tee Morris, Evo Terra, Dawn Miceli, Drew Domkus (For Dummies, 2005)
• Podcasting Hacks: Tips & Tools for Blogging Out Loud, Jack D. Herrington (O'Reilly, 2005)
• Podcasting Solutions: The Complete Guide to Podcasting, Michael W. Goeghegan and Dan Klass (Apress, 2005)
• Podcasting: The Do-It-Yourself Guide, Todd Cochrane (Wiley, 2005)
• Secrets of Podcasting: Audio Blogging for the Masses, Bart G. Farknas (Peachpit Press, 2005)

All the best, Suzana and Ian.

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In general terms, the form of the accounts should provide all essential information to all persons interested or entitled to an accounting in the Estate or Trust. Generally speaking, the accounts should be prepared in a manner that is capable of being understood by a person of average intelligence, literate in English, and familiar with basic financial terms, who has read it with care and attention. Accordingly, Executors and Trustees preparing their accounts should be careful to avoid technical terms such as "debit" and "credit", which are generally not known to persons who are not familiar with bookkeeping and accounting practices.

One of the main problems encountered by Executors and Trustees in answering requests for information or providing explanations to beneficiaries is that the beneficiaries frequently do not read the accounts with the required care and attention which is essential if the accounts are to be understood.

On the cover of the accounts, a short statement of the purpose of the accounting, such as "The Trustees present these accounts for the approval of the Judge and to acquaint interested parties with the administration of the Estate and its proposed distribution", might well be added.

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In Ontario, Rule 74.17 of the Rules of Civil Procedure sets out the specific expectations of this relatively precise art of accounting. It can be seen, therefore, that any accounting by Executors and Trustees has both a broad and a narrow aspect to it.

In the broad sense, it is an obligation whereby the Executor or the Trustee furnishes information to interested parties on an ongoing basis concerning the administration of the Estate or Trust.

In the narrow sense, the Trustee's accounting relates to the accounts prepared by him or her at the close of his or her administration (or some appropriate intermediate stage) so as to reflect the transactions that have occurred, with a view to discharging the trustee from liability for his or her stewardship.

Usually, a Trustee informs the beneficiaries of the results of his or her administration on an interim basis. This statement usually sets out the income or revenue received, the expenses incurred and the net result of investments, together with a list of assets.

Interim reporting statements vary widely in the manner of their presentation and the detail of the information they contain. To a greater or lesser degree they are designed to demonstrate the performance of the trust and frequently resemble the form of corporate financial statements.

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1. To keep proper accounts of the trust or estate, which should be clear and accurate and rendered at appropriate intervals to the beneficiaries;

2. The accounts must be kept distinct from other accounts;

3. Receipts or cancelled cheques and vouchers must be preserved to support entries on both the credit and debit side of the account;

4. To produce to any beneficiary the accounts when reasonably requested. In the case of income or revenue beneficiaries, accounts must be rendered at reasonable intervals without being requested by the beneficiaries entitled to such income or revenue. In the case of residuary beneficiaries, accounts should be presented when the interest falls into possession. These beneficiaries are entitled to inspect and investigate the accounts, vouchers and other documents of the trust or estate, including the will or trust deed. They are also entitled to such full and accurate information regarding the state of the trust property and the administration generally as is or ought to be within the knowledge of the Trustee. Thus, the accounts must be kept in such a manner that they will clearly show how all the monies or assets received have been disbursed or otherwise disposed of, and the ultimate distribution among the beneficiaries of the available Estate.

It goes without saying, of course, that beneficiaries who are given general or specific bequests or devises and who have received these bequests in full are not entitled to any further accounting. If, for any reason, the Trustee cannot keep the accounts herself, she is under a duty to employ a competent person to do so, and these costs will generally be chargeable out of her compensation, as it is her duty to keep the accounts.

5. To make all beneficiaries fully acquainted with their rights;

6. To disclose any and all breaches of trust;

7. To allow all beneficiaries sufficient time to investigate the accounts;

8. To ensure that all beneficiaries have competent and independent advice in their investigation of the accounts; and

9. To notify all beneficiaries interested of any Court audit.

Our social media leads for today's blog are, as usual, just suggestions:

 Open-Source Podcast Players: amarok

Search Engines and Directories for Podcasts:

podcast 411 (reflects numerous directories)

vodstock (listing video podcasts and "vlog" directories as of Nov.10, 2005)

podcast.net  ; podscope ;  podcast search ; podcast alley ;  digital podcast

All the best, Suzana and Ian. --------

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(1) lawyers for a fiduciary;

(2) duties to beneficiaries;

(3) the general nature of the duties;

(4) the need for good faith, fairness and impartiality;

(5) determinative duties to beneficiaries; and

(6) anticipating and avoiding conflicts.

In the course of analyzing the ACTEC Commentaries, we also intend to consider the interplay of the Law Society of Upper Canada's Rules of Professional Conduct. Many of the MRPC (Model Rules of Professional Conduct) are similar, if not identical, to the Law Society's Rules of Professional Conduct.

Of course, while looking at the U.S. experience, we will also be keeping in mind the Rules of Professional Conduct in Ontario to serve as an illustration and a benchmark for this particular jurisdiction. Competence The MRPC Rule 1.1 provides that:

"A lawyer shall provide competent representation. Competent representation requires the knowledge, skill, thoroughness and preparation reasonably necessary for the representation."

In a future blog, we will undertake a comparison with the Law Society of Upper Canada's equivalent comments on competence. Now, in an effort to provide a social media update, the following are some useful resources to look at. By including these references here, we do not "endorse" them, but hope that you find these as useful places to get more information. There is, of course, a wealth of information in addition to these resources, and this is not intended to be an exhaustive list at all:

General information regarding podcasting: Wikipedia - podcasting RSS

"How to" podcast: Make a podcast Tutorial Articles

Basic steps (this link has a great diagram and a description of the basic steps of how a podcast works)

Enhanced iTunes (making enhanced podcasts in iTunes)

Enhanced Windows (making enhanced podcasts using Windows Media Player)

All the best, Suzana and Ian. --------

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In Hull on Estate and Succession Planning Podcast #12, we continued with our discussion of trusts and, in particular, the concepts of the "prudent investor" rule and incentive trusts.

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In Hull on Estates Podcast #12, we continued with our discussion of Scott v. Cousins and, in particular, the court's analysis of the Burden of Proof and Undue Influence.

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In addition to the basic themes of the Commentaries (see our June 9, 2006 blog), they also reflect the role that the trusts and estates lawyer has traditionally played as the lawyer for members of the family. In that role, a trusts and estates lawyer frequently represents the fiduciary of a Trust or an Estate and one or more of the beneficiaries.

In drafting the Commentaries, the authors have attempted to express views that are consistent with the spirit of the MRPC (Model Rules of Professional Conduct) as evidenced in the following passage:

"The Rules of Professional Conduct are rules of reason. They should be interpreted with reference to the purposes of legal representation and the law itself."

The editors note (at page 1 of the Commentaries) that a goal of the Commentaries is to encourage a full discussion between a lawyer and a client as to the scope and the cost of the representation. Furthermore, the duties of trusts and estates lawyers are also carefully considered and described. In the U.S. jurisdictions, many of the parameters of the duties of estates and trusts lawyers are set out by opinions rendered in malpractice cases, which provide some guidance regarding some of the ethical duties of the lawyer as well.

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Ian is honoured to be a Fellow of the American College of Trust and Estate Counsel and, as a Fellow, he receives ongoing updates from the perspective of U.S. Estates Law. Interestingly enough, the similarities between the United States and Canada are considerable. For example, the leading decision of Banks v. Goodfellow (1870), L.R. 5 Q.B. 549 is used as a benchmark testamentary capacity case in most U.S. jurisdictions. Therefore, the starting point with regard to the U.S. law and its experiences are fairly similar to ours in many situations.

One of the recent massive undertakings that ACTEC has completed is the fourth edition of the Commentaries on the Model Rules of Professional Conduct.

These model rules were first published in 1993 and the Commentaries continue to assist U.S. courts. There are ethics committees and other aspects of the U.S. Estates Bar that use these model rules as a true "benchmark" for many of the pressing issues.

As the introduction to the Commentaries explains, they generally seek to identify various ways in which common problems can be dealt with, without expressly mandating or prohibiting particular conduct by trust and estates lawyers. The Commentaries are intended to provide general guidance to the trust and estates lawyers.

Ian and I intend to work through the Commentaries in some respect throughout the next little while in our Podcasts; however, we thought that it might be helpful to, in a written format through our daily Blog, walk through some of these interesting issues as well.

The basic themes of the Commentaries are:

-the relative freedom that lawyers and clients have to write their own charter with respect to a representation in the Trust and Estates field;

-the generally non-adversarial nature of Trusts and Estates practice;

-the utility and propriety, in this area of law, of representing multiple clients, whose interests may differ but are not necessarily adversarial; and

-the opportunity, with full disclosure, to moderate or eliminate many problems that might otherwise arise in an Estates practice. (See ACTEC Commentaries, page 1).

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Ultimately, where a trustee administers the assets of a trust, the two most effective and important releases that are available to be obtained are (1) a Clearance Certificate from Revenue Canada; and (2) an Order of the Court in a Passing of Accounts.

Having said that, while a Clearance Certificate is of course sought in most circumstances, a formal Passing of Accounts is not always obtained by a trustee.

From a practical standpoint, where all of the beneficiaries of a trust are sui juris, the trustee has the opportunity to obtain a Clearance Certificate and then merely circulate a release to all persons with an interest in the trust. In so doing, some consideration must be given to the question of independent legal advice and whether or not it is necessary to insist that a beneficiary obtain such prior to signing the release.  Without the benefit of independent legal advice, there is the question as to the strength and enforceability of any release.

None the less, in practical terms, many estates and many trusts are wound up on the basis of an execution of the appropriate release by the beneficiaries.

From a practical standpoint, when seeking a final release from a beneficiary, a copy of the accounts should be provided, and these accounts may be in an informal format or in Court format, depending on the circumstances.

A condition contained in a will to execute a release is enforceable and, upon refusal to do so, the legatee may forfeit the gift: see Williams on Wills (7th Ed.) Butterworths 1995 at p. 374. Furthermore, it has been held that, where there is a requirement in a release that it be executed within a stated time, this must be complied with: see Simpson v. Vickers (1807) 14 Ves. 341.

The form of a release or receipt depends on the nature of the gift itself. For example, when a beneficiary receives a specific bequest, he or she should only need to provide the person who presented the gift with an acknowledgement of receipt of the particular bequest received.

On the other hand, a residuary beneficiary has a right to consider pursuing a formal Court audit or should be expected to sign an acknowledgement, release and indemnity.

In conclusion, the substantive issues relating to the whole question of release, indemnity and receipt are important to keep in mind when you are dealing with the form of a receipt, acknowledgement or indemnity.

Best wishes, Suzana and Ian. --------

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·the general principle is that a trustee is entitled to an indemnity for liabilities properly incurred in carrying out the trust, and that right extends beyond the trust property and is enforceable in equity against a beneficiary who is sui juris; ·the basis of the principle is that the beneficiary who gets the benefit of the trust should bear its burdens, unless he can show some good reason why the trustee should bear the burdens alone; ·the right of indemnification is not confined to the case where there is only one beneficiary.

It applies to cases of multiple beneficiaries as long as they are all sui juris and entitled to the same interest as absolute owners of the trust property between them; ·the liability to indemnify could apply to trustees of subtrusts that were beneficiaries of the principle trust; and ·prima facie, the beneficiaries share the liability in proportion to the extent of their respective beneficial interests in the trust.

With the incidence of personal liability for trustees, it is nice to see that the caselaw strongly supports, in the right circumstances, the ability of the trustee to come back against and collect, if necessary, from the beneficiary.

All the best, Suzana and Ian. --------

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In an effort to carry on with our theme of trying to protect trustees, we wanted to consider the liability of trustees as against third parties. In this context, there is really no limit to the extent of liability that a trustee can incur.

A trustee can, of course, incur liabilities to persons other than beneficiaries. For example, the trustee may contract an environmental clean up company to remove contaminated soil from land that is owned by the estate before it is put on the open market. The trustee will therefore be liable for those costs, payable out of the assets of the estate. As trustees are principals and not agents of the beneficiaries, they will, prima facie, be personally liable on obligations owed to third parties and trustees may incur personal liability as a result.

The trustee may limit the extent of the personal liability to the value of the trust assets or limit it to the extent that the right of indemnity exists only against such assets. Furthermore, where the trustee has the right of indemnity out of the trust assets, creditors will, as a general rule, be entitled to be subrogated to it. See Cullity, M.C.C. "Personal Liability of Trustees and Rights of Indemnification" (1997), 16 E.T.J. 115 at pp. 127-128. As to the question of limiting the liability of a trustee, Falconbridge on Mortgages (4th Ed.), p. 428-429 states:

If the trustee or personal representative covenants to pay, he will be personally liable on his covenant, even thought he covenants as trustee or as personal representative, even though he adds a proviso that he shall not be personally liable, such proviso being repugnant to the covenant to pay and therefore void. He may, however, validly limit his liability without destroying it, as, for example, if the covenant is to pay out of a certain fund, with a proviso that the covenantor shall not be liable after he ceases to be entitled to administer the fund. So, if a trustee covenants "as trustee and not otherwise", or "qua trustee only", or if an executor covenants "as executor, and as executor only", the covenantor is personally liable to pay, but only to pay out of the assets of the estate or to the extent that he has assets.

This strict rule attempting to limit a trustee's personal liability has been weakened and modified by the courts. For a review of the impact of the ability of a trustee to limit his or her liability, see Cullity, M.C.C. "Personal Liability of Trustees and Rights of Indemnification" (1997), 16 E.T.J. 115 at pp. 129-133 and see Gordon v. Roebuck (1992), 92 D.L.R. (4th) 670, 9 O.R. (3d) 1 at p. 7-10 (C.A.).

It seems that the bottom line is that a trustee must watch out for the personal risk that may be attached to him or her, merely as a result of his or her dealings with third parties.

On our next Blog, there'll be more to come on this "protection of trustees" theme...

All the best, Suzana and Ian.

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During this episode of Hull on Estates, we talked about the case of Scott v. Cousins (2001), 37 E.T.R. (2d) 113 (Ont. S.C.J.).

In particular, we discussed:

(i) the admissibility of hearsay statements;

(ii) the role of medical evidence regarding capacity; and

(iii) the issue and use of retrospective capacity assessments. --------

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During this episode of Hull on Estate and Succession Planning, we talked about:

(i) the concept of trusts;

(ii) different types of trusts;

(iii) the advantages of a trust;

(iv) considerations in choosing a trustee; and

(v) an illustraion of how trusts provide much needed flexibility. --------

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Perhaps one of the more frightening aspects of being a trustee is the fact that the risk of personal liability is "an incident of the office of trustee". His Honour Justice Cullity wrote a leading article on this topic, entitled "Personal Liability of Trustees and Rights of Indemnification" (1997), 16 E.T.J. 115. Given the personal consequences attached to the position of trustee, some consideration must be given to the nature and extent of the releases and rights of indemnification that may be available to a trustee.

Usually these issues are considered at the final stage of an estate administration, when the trustee is dealing with the distribution and winding up of the assets of the estate or trust. In this Blog series on this topic, we will attempt to briefly review some of the substantive and practical issues relating to the whole question of rights of indemnity and releases for trustees.

In order to properly determine just what a trustee should receive in the form of a release, acknowledgement or indemnity, some consideration must be given to specifically the nature and extent of the obligations and liabilities that are expected of the trustee when he or she takes on the role. In short, a trustee is a fiduciary and, as such, his or her fiduciary obligations are owed to beneficiaries, and in some circumstances, to third parties as well.

Given this, the whole question of what a trustee can expect in the form of an acknowledgement, release or indemnity, is a difficult one. Presumably, the trustee's rights of indemnification out of the trust property arise as a result of the fact that the trustee merely holds the legal title to the property and does not hold the beneficial interest in the property.

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"Clients doesn't care about you, they care about themselves".

While this may seem like a bold statement, we think it is true in every case that we work on. You have to show that you care about your client. You can't fake the fact that you care. A client has an intuitive ability to determine if you indeed do care about his or her case.

There are three "R's" of good client service.

You need to respect the client. The first rule of respect is relatively obvious, in that people want to be held to a certain level of esteem by you. Consideration needs to be shown for their thoughts and their feelings.

The client is going to make judgments based on how you communicate your advice to them. You need to make a connection with your client and ask yourself:

What do I, or could I, like about this person? Do I understand this person? What is the quality of my communication with this person? What ideas does this person have that I can appreciate? The purpose of this kind of analysis is to get your thinking aligned with the client to respect their feelings.

The second "R" is building rapport.

What is rapport? Before influence can sink in or leadership can be effective, you have to create a certain level of trust and rapport with your client. Rapport is defined as an agreeable or harmonious relationship. The client is going to come back if that lawyer has their best interests in mind throughout the retainer. The real question is, "Does the client feel that the lawyer has his or her best interests at heart and can that lawyer assist the client"?

Essentially, there is an interdependence between the client and the lawyer. The client eventually comes to a level of trust where he or she is going to respect and act on the advice given by the lawyer.

The third "R" is the rules, sometimes referred to as the client's rules. Every client has his or her own expectations and rules. Typically, the client comes in with his or her own reasons for his or her own agenda. The rules need to be respected and always considered.

With these three "R's" in mind, we're well on our way to improving our client services.

All the best, Suzana and Ian.

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A unique characteristic of podcasting is the fact that it is speech-based radio and, in Canada, just like in the U.K., we have a culture of expecting high quality speech-based radio as a result of the CBC.

Podcasting is essentially citizen media created by those who are closest to the story. And podcasting is truly about convenience. These days, people simply do not have the time or the ability to listen to things they want to listen to in "real time". As such, we as service providers have to react and perform to this reality.

In our view, podcasting is not just another fad or interesting technology blip. Rather, it's the wave of the future. Paired with the ipod, podcasts are informative, intimate and convenient. And because they are portable, they are conducive to complete and total communication.

And the great thing about podcasts is the fact that, while your audience is expecting to hear great content, it is not necessarily expecting great production.

The listeners who are the most affected and the ones whom you have "won" are the ones who download your podcast and essentially "take you with them". The only way you will get them to take you along, however, is to make it simple, easy and convenient - without compromising on the high quality content. We need to teach people how to "consume" podcasts to make sure that they can download and walk away with the technology in hand.

All the best, Suzana and Ian. --------