Estate Planning for New Lawyers - Hull on Estates, Episode 245
Listen to: Estate Planning for New Lawyers
This week on Hull on Estates Natalia Angelini and Sarah Halsted discuss the paper "How to Draft a Will - Minimizing the Risk of Liability to You" by Corina S. Weigl. More specifically, they discuss tips for estate planning such as; how to take instructions, how to draft a will, how to see that it is duly executed and lastly, the importance of reporting to your client once the will has been executed with a final reporting letter.
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Natalia R. Angelini - Click here for more information on Natalia Angelini.
Sarah Halsted - Click here for more information on Sarah Halsted.
Estate Planning for New Lawyers - Hull on Estates- Episode #245
Posted on April 12, 2011 by Hull & Hull LLP
Natalia Angelini: Hello and welcome to Hull on Estates. You’re listening to episode #245 on Tuesday, April 12, 2011.
Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.
Sarah Halsted: Hi and welcome to another episode of Hull on Estates. I’m Sarah Halsted.
Natalia Angelini: And I’m Natalia Angelini.
Sarah Halsted: If you want to be heard on Hull on Estates, you can participate by leaving us a comment. Email us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.
Natalia Angelini: Thanks Sarah. I’m glad we can be podcasting for the first time together.
Sarah Halsted: Yes, I’m looking forward to it.
Natalia Angelini: So why don’t we get right into it. We’re gonna be talking about the most recent CLE that Sarah, you attended, called The New Lawyer Practice Series, Wills and Estates Law 2011 that was held on March 3.
Sarah Halsted: Yes and it was chaired by our own Jordan Atin. It was very informative.
Natalia Angelini: And I think you were telling me, one of the papers you found to be and talks that you found to be really informative was the one given by Corina Weigl on How to draft a Will and minimizing the risk of liability.
Sarah Halsted: Yes that was a very good, thorough paper.
Natalia Angelini: So why don’t we take some talking points from that paper and let our listeners know what you gleaned from Ms. Weigl’s paper and her talk.
Sarah Halsted: Sure Natalia. So this paper is intended to provide a process to follow from when the client walks in the door asking for a Will to be drafted, what to do with the Will once it’s been executed and how to report to the client. It covers four areas and the first is taking instructions. Note taking is of crucial importance. You must take notes as to the client’s background and use that to sort of come up with the template for the Will that you’re going to draft.
Natalia Angelini: That’s right. I think, you know, it seems kind of trite but we definitely, on our end when we do LawPRO work, we do see some times that if there are great notes, it’s helpful to the…you know, our client. And if there aren’t, it can be detrimental to their case. So I think it’s certainly a trite but important point to stress. I think one of the other things that she mentions is testing the mental state of your client. And there’s sort of a two-pronged approach here. Number one, you want to look at does your client have the capacity to make a Will? And, you know, number two, are the instructions being provided to you those of your client or is he or she under some kind of influence or undue influence of others? So, you know, there’s…I mean, there’s a lot to capacity that could take up much more than this talk today. But in its simplest…or just by way of simple comment I guess what we take from this is that you definitely want to test that the testator understands what they’re doing by making a Will, they understand what their property is and how they’re giving it away and they explain their rationale to you about why they’re doing what they’re doing. You know, they know that they’ve got…if they have obligations to their dependents, they understand that. And you’re really gonna be exploring with your client the kinds of questions. And you can ask questions ranging from a whole gamut of things from their family, their family relationships, their assets, all to help you in determining if capacity is an issue or not.
Sarah Halsted: Okay the next topic is the relationship between your client and his or her relatives.
Natalia Angelini: Right and this is, you know, tying into my other point. You know, there’s gonna be more than just, you know, learning the names of the…for instance, the kids of the testator. You certainly want to be informed about the aspects of the administration and think about who’s gonna be…or discuss who’s gonna be the best person to be the trustee. And Ms. Weigl recommends that you know what? Talk about who’s gonna be the trustee at the end of your meeting after you’ve got all the information because then you can have a better sense of…help guide your client as to who might be the best person for that.
Sarah Halsted: Another important think that you have to do when you’re taking instructions is canvass assets and liabilities because you don’t want to draft a Will where the gifts are going to abate because there aren’t enough assets. You weren’t aware of the extent of the assets. So it’s important to make sure you have that background information.
Natalia Angelini: Right, and you know, if people have property outside of Ontario, you might have to think about preparing a separate Will to deal with those assets. You know, and you might also want to confirm ownership of assets by looking at title documents. So what your clients are telling you they own, they actually own.
Sarah Halsted: Another thing that’s important is to discuss tax considerations. So, you know, the client is not necessarily going to know what their obligations are with respect to tax and, you know, mechanisms for reducing the amount of tax payable upon death.
Natalia Angelini: Right. And I think it’s interesting that Ms. Weigl, you know, cautions lawyers, if you will, and says you know if you’re gonna practice in the area of Wills and estates, you need to understand the income tax considerations that are relevant to taxation of property and income on death. And if you don’t, then you may not be meeting, you know, the competency level required by the Rules of Professional Conduct. So if you don’t, you at least need someone I guess on your team or in your office that can help you with this, since it’s definitely something that you’re gonna need to discuss with your clients.
Sarah Halsted: And the next stage of taking instructions is something Natalia’s already sort of touched on is, determining whether there are dependents which your client is under a duty to provide for. This is extremely important because the Will could eventually be subject to a dependent’s support claim if you haven’t provided for that dependent in the Will. So it’s important to know so that…so in estate planning you can prevent that sort of thing from happening.
Natalia Angelini: Right, right. That’s a good point. I’m sorry. I’m just gonna tie back into that…my comment on tax issues. The other related tax discussion I guess you would want to have is about probate tax. And it’s important to discuss it but it’s also something that Ms. Weigl notes, you know, don’t let probate tax savings, you know, become the client’s only focus for doing a certain transaction because sometimes that can actually hurt your client rather than help your client. So understanding your client’s circumstances and what’s gonna work best for them is valuable.
Sarah Halsted: I agree. And some final considerations are whether there are any beneficiary designations for life insurance, RRSP’s, RRIF’s, pensions. You may want to make reference to these in the Will just for clarity. Another thing you want to be aware of is whether there are any previous Wills and you want to consider those in your process of drafting. Make sure nothing important or crucial has been left out.
Natalia Angelini: Right. And I think the key here is also to discuss changes between the Will you’re doing now and the prior Will, especially if it’s a really marked change. Since we see a lot of, you know, Will challenge litigation coming through our doors, this is kind of a hot spot where lawyers can sometimes get caught if they haven’t explored that change in the testator’s decision.
Sarah Halsted: Now next Ms. Weigl gets into drafting the Will. The most important point in terms of drafting, I think, is to prevent an intestacy with a residue clause.
Natalia Angelini: Right. That’s an important point and again, it seems trite but, you know, it can be overlooked on occasion and the impact of an intestacy is, you know, obviously the last thing a testator wants. I mean, the whole point of having their Will done, in most cases anyway, is to make sure that everything is disposed of as they intend. So it’s certainly an important one not to miss.
Sarah Halsted: Yeah, it’s also important to ensure that all income and capital is disposed of with respect to any testamentary trusts that the client is asking you to draft for them.
Natalia Angelini: Right. And I think another one of the things that we see are where there’s no gift over provision. And Ms. Weigl also, you know, stresses that you want to make sure you include a gift over provision in the event that a beneficiary doesn’t reach, you know, the specified age to receive their gift. And that way, you’ll avoid the application of a Saunders and Voce type rule…the Saunders and Voce rule.
Sarah Halsted: That’s a really good point, Natalia. So the third main aspect is executing the Will. You need to ensure the Will is duly executed in accordance with the Succession Law Reform Act or SLRA for short.
Natalia Angelini: Right. And in that case we’re gonna need two witnesses over the age of 18. You want them staying in the room with you, the solicitor, during the execution at the same time since they’ve got to see each other witness. And while we don’t see a ton of…I guess we don’t see as much litigation revolving around this point, it still does happen sometimes that you’ve got situations where people say oh you know, I didn’t…my lawyer sent me the Will and I signed it or…I mean I think we don’t see very much of it, but we can’t stress enough how important it is to have control over that process and how it’s really negligence avoidance to be in the room while that’s all taking place.
Sarah Halsted: Finally, Ms. Weigl suggests that you prepare a comprehensive reporting letter for your client where you explain what you’ve done, what duties are imposing on like executors for instance, tax considerations, giving an overview of the Will and explaining it to the client so they understand.
Natalia Angelini: Right. It’s definitely helpful, you know, ‘cause sometimes they go through the process and they might not have remembered everything you’ve said or, you know, it’s definitely helpful. And good record-keeping for you as well to have on file that you’ve sent your client a comprehensive letter confirming everything and so later on if anything…you know, if things do go awry, it also might assist with your memory too in jogging your memory to recollect things to have that letter in place. And hopefully it avoids…it helps to avoid misunderstandings as well and if the clients change their mind about something, then you know once they get your letter, then they have that chance to come back to you and revisit things.
Sarah Halsted: I think that’s a really important point, Natalia.
Natalia Angelini: Thanks Sarah. So I think that brings us to the end of our talk. Now, I mean, we’ve touch on this to the degree that we could in our brief podcast. But we really do refer you to Corina’s paper. It’s really comprehensive. It’s almost 40 pages so it’s a great tool to have, especially for the new estate practitioners out there.
Sarah Halsted: Yes, yes. It was very helpful for me as a new lawyer. Well it was a pleasure, Natalia. I look forward to podcasting with you again soon.
Natalia Angelini: Great. And we look forward to hearing from our listeners. As Sarah noted at the outset of our podcast, you can send us an email or visit our blog page. Until next time, take care.
This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.
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