This week on Hull on Estates, Paul Trudelle and Saman Jaffery discuss Charitable Giving and Estate Planning.

If you have any questions or comments, please send us an email at hull.lawyers@gmail.com or visit our blog at estatelaw.hullandhull.com

Click here for more information on Paul Trudelle

Click here for more information on Saman Jaffery

This week on Hull on Estates David Smith and Nadia Harasymowycz discuss the definition of "Child" and its application in the Estates field with a review of the British Columbia cases of Hope v. Raeder Estate and Peri v. McCutcheon.

If you have any questions or comments, leave us a comment on our blog or email us at hull.lawyers@gmail.com

Click here for more information on David Smith.

Click here for more information on Nadia Harasymowycz.

If you have any questions or comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

This week on Hull on Estates, David Smith and Nadia Harasymowycz discuss a fairly new investment vehicle that has been set up by the Canadian Government to allow for Canadians with disabilities and their families to save for the future.  More specifically, this podcast discusses how one can use this investment fund as an estate planning tool. 

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

For more information on David Smith click here.

For more information on Nadia Harasymowycz click here.

Listen: Understanding the Role of an Executor

This week on Hull on Estates, Ian Hull discusses the role of an executor and how you can anticipate problems that may arise.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull – Click here for more information on Ian Hull.

Understanding the Role of an Executor - Hull on Estate and Succession Planning #222

Posted on February 15, 2011 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. The podcast you’re listening to will provide information and insights into estate planning in Canada. From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Ian Hull: Hi and welcome to episode 222 on Hull on Estates and Succession Planning. 

Welcome back. I’m Ian Hull doing a solo podcast today without my compatriot, Suzana Popovic-Montag. Today is episode 222. It’s a great show that some of us of my vintage remember, Room 222. So it had a nice resonating history to it and I wanted to speak about a topic that ties into that historic show in the sense of this, and that is, is that we went to class, we watched 222…Room 222 when we were kids and as young teenagers and it taught us to understand and appreciate leaders, and leadership through education. Taught us to respect our teachers and some we didn’t respect and some we did. Sometimes we were wrong; sometimes we were right. Probably didn’t know until many years later. It ties into the same theme in my view as to being an executor. It’s an often criticized role and it’s easy to, as my dad used to say, it’s easy to kick down sandcastles – it’s not so easy to build them up.

And like every executor has, is that when they get the job of executor when someone passes away, the beach is flat. There are no…the water has been just waving across the rocks and the sand is flat and maybe not even wet enough to build anything with. Well the executor has to go and start from the beginning and building the sandcastles. And we often and too often in my view, see beneficiaries who just turn around and try to kick down the sandcastles as opposed to admiring them and respecting the work that they’ve done. Having said that, that’s life. And if you’re gonna take on the job, it comes with its own warts, so to speak. And we’ve been talking about in this series, in this mini-series, about some of the warts and some of the problems that executors run into with a view to trying to anticipate them and anticipate where you’re gonna get poked and prodded and complained about. 

One of the easy things that I think is easily addressable is the whole question of the bank accounts. Early on, you’re gonna be required, as an executor, to determine the nature and extent of the bank accounts of the deceased. We tell our clients, please make some sort of list, even if it’s a photocopy of the bank statement that sits in a safe area where when you pass away someone can at least match up what institution, give some lead to the bank and so forth. Sometimes what helps is that when we ask our clients to draw Wills, we’ll say to them look, we want all this information about where your banking is, even the bank account numbers, so that it’s a record that should the executor come to us and say I don’t even know where my great uncle banked, I’ll have a note of it at least. Starting points. Leads. 

But having said that, once you’ve identified it, we have an obligation to create our own estate account which we’re gonna talk about. But this is about pulling in assets at this point. We’re in the early stages. The water is just still rippling across the sand and we’re still trying to get our feet wet and determining whether the sand is too dry to build our sandcastle up or do we need to add some water to it. And so what we’re often faced with is, is what bank accounts exist and where are we gonna find those and locate those. There’s some Internet searching that’s available as well in most jurisdictions, a very easy one. One of the interesting searches that you can undertake is to look at old accounts through the Bank of Canada to see if the deceased just left money in an account that went dormant. But let’s just talk about easier ideas, sort of the low hanging fruit accounts. And those are the ones you kind of knew that they always banked at a certain bank and you’re gonna be able to find that out because if you show the bank the Will, they’re gonna give you that information. And in so doing, we’re often faced with the problem of it may or may not be in the form of a joint account. Now we have spent time over the years in our podcasts and we will continue to talk about this issue in some level because the Courts still struggle with it. But a joint account is a very classic estate planning technique and so as an executor if I come into this role and I meet a joint account issue, those are the sorts of issues that I want to seriously consider and probably seriously consider getting some legal advice or some help from my financial advisor or accountant as to how to deal with that joint account. But identifying the nature of the account, solo or joint, is a crucial, initial step that again, when we see attacks on an executor’s role and their duty, those are easy, low hanging fruit attacks as well in the sense that we see it too often, that the executors didn’t move quickly enough to determine the nature and extent of the assets in the context of bank accounts. Do determining if there are any bank accounts is vital.

The other sort of…now there are dramatic illustrations of this…but the more simple estates and the more straightforward estates are, we’re obligated as executor to really determine what the liabilities are. And it is sort of like chasing the bank accounts. It’s finding out what Visa cards are out there, what car leases are out there, what day-to-day automatic withdrawals are coming out of the account and for what purpose. And nature and extent of the liabilities is a core element of expectation of the executor.  So again, we sit back and we say well where can we enhance our position with the beneficiaries, so that they’re not making attacks on us? Well we can show and document to the extent that it’s necessary…maybe a memo or a note…I went to these banks.  I did this to find out the bank accounts.  I determined their status, joint or not, or otherwise.  I’ve determined if there is a corporate bank account, if there’s a private held company.  I’ve determined that these are the liabilities that need to be addressed right away.  And whether they’re funded through the bank account and the estate bank account is for another day and how we do those mechanics are for another day. But often it’s the itemizing, allocating and organizing of both the in assets and the out assets, so to speak. The in – finding the bank accounts; the out – paying the liabilities.  That we see a lot of attacks on trustees unnecessarily if it’s done in an organized, efficient…and when I say efficient, that means timely as well. Because the Courts have consistently said if you’re not timely with these things coming out of the gate, you are going to be susceptible to criticism.  Whether you should or shouldn’t be is another day and that’s for another lawsuit and it depends on the facts. But it is a very fundamental and basic organizational tool to expect of an executor and it’s an easy area to defend if you’ve done it right and you’ve identified it in a meaningful way.

So tomorrow we’ll talk a little bit about...the next podcast we’ll talk a little bit about what we’re gonna do with that in and out information and what our expectations are. But I wanted to cover the sort of basic parameters and the expectations I think that touch on our leaders, and those leaders being the executors. And coming back to my Room 222, the leaders are the teachers in our classroom or the people around us or the people that are prepared to take on roles such as executor.

So thank you very much for joining me this week. I’m missing Suzana and I apologize for her non-attendance and we look forward to our next podcast. Thank you very much.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag. The podcast that you have been listening

to has been provided as an information service. It is a summary of current

issues in estates and estate planning. It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

Listen: Why - Part 3

This week on Hull on Estates and Succession Planning, Ian continues his discussion on "what" it means to be an estate trustee and "why".  Specifically, he talks about dealing with and protecting special assets.

Ian continues his list of Duties for an Estate Trustee continuing with:

4. Dispose of perishable assets and secure and protect all other assets including business interests and rental properties.

5. Review insurance coverage and obtain increased or additional coverage of the assets where necessary.

6. Determine and list the names, addresses and ages of beneficiaries and notify them of their interest.

7. Determine the nature and value of the assets and debts of Louis, an inventory of the Estate, and arrange valuations where necessary.

The “Why” series was spurred by the book Start with Why By Simon Sinek which can be found in the Hull & Hull LLP Reading Center. 

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull – Click here for more information on Ian Hull.

Why – Part 3 - Hull on Estate and Succession Planning #221

Posted on February 1, 2011 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. The podcast you’re listening to will provide information and insights into estate planning in Canada. From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Ian Hull: Hi and welcome to Hull on Estates and Succession Planning. Well welcome back. I’m Ian Hull and I’m doing a solo presentation here without my colleague, Suzana Popovic-Montag who will be back into the loop soon.

We wanted to continue on our mini-series about I’ll call it the “what” and “why”, but the “why” and “what” probably more accurately, of being an estate trustee.   We’re gonna build a list of not everything. We’re building a list, hopefully in order that makes some sense, of what the duties of an estate trustee is over these podcasts. And the last podcast we dealt with some of the preliminary considerations, dealing with the body and issues where you have to deal with immediate concerns, as dependents that have to be addressed like small children and so on. I want to move on to my next one and again, we’re gonna be posting these as we work through them.

Our next one is dealing with special assets and dealing with and protecting those special assets. And in those circumstances I’ll often say to my client who is an estate trustee and appointed as estate trustee, go into the house or go into the condominium and take a video camera, film everything as soon as possible, so that you can have a record of the assets, the personal items, the perishable items, things that may need immediate attention. But the specific home contents and so on. They can be such a lightning rod of complaints. Later on someone’s gonna say I always wanted that chest of drawers, where did it go? And you’re sitting there saying, look I was really busy dealing with everything else, I didn’t really notice Uncle Fred took it, or I don’t even know who took it. It was a busy day, there was a bunch of people around the house. 

Anyway it’s just a helpful tool to help you describe and identify just what those contents are. And it’s a bit of an urgent and an immediate requirement as a duty of the trustee. I mean, you’re obligated as a trustee to bring in and distribute all of the assets of the estate. That includes the tea cups and the tea cups can be a very…unfortunately a vital source of very contentious litigation. So that’s an alternative. We also recommend strongly…we use some of the auction houses like Waddington’s. They’ll come in and they’ll make a whole list of the items right down to the pens and paper in the living room, put a value to it and as a locked inventory. An inventory that can be crucial in the context of all of the administration of the assets. And it’s not a difficult task, so one that I strongly encourage my executors as a duty to focus on early and do it right so you’ve got a record of the contents.

Now we don’t want to underestimate…and again we’re working through a list of duties in the sense that, you know, I’m trying to do it as chronologically as I can but this isn’t the be all and end all of lists. It’s just hopefully a good starting point.

The next one is reviewing insurance coverages and obtaining necessary increases. Often, in some cases anyway, you’ll have an estate that has artwork in the house. So you want to make sure, and I tell my clients make sure we’ve got full coverage. The house is now only being watched every day with a person coming by, you check with the agent. Maybe even secure those assets. Get that artwork out of the house in case there’s a break-in. So if it’s secured in a locked facility, a storage facility of some nature or something like that. But consider, you know, what coverage there is and increase that, if necessary. And I’ve had cases where the deceased simply just underestimated or was too lazy to value their insurance and in the living room happened to have a Group of Seven painting that was insured for a modest amount. You know, you as an executor, need to come in, move quickly and assess that and determine with certainty whether or not the insurance coverage is there.

The next item…I think we’re at about item 6…is determine a list of the names and addresses and getting a hold of all of the beneficiaries. And this is one of those situations where I strongly encourage my clients to leave us a hint, give us some help here. If it’s your long lost cousin in Scotland that you’re going to be giving money to or that famous chair in the corner, help your executor…I tell my clients to make sure we’ve got a contact name, make sure we’ve got a way to get a hold of the long lost relative in Scotland. But even in a more simple estate, just a list of nieces and nephews if that’s where the money’s going or something like that with contact names or addresses. Anything that can sort of allow you to move quickly, because once you get that, you want to… outreach is the big part of it and communication...Suzana and I have talked about that many times…is a fundamental aspect of any estate administration. Well, early and often, tell them early and often and so the sooner you can get that information out to the beneficiaries, even to say look, we’re on it, here’s the Will, we’re on it, even vague at that point because you’re not really even sure what you’re doing or not doing yet, what your priorities are, is so helpful to creating a feeling of comfort that the beneficiaries know well at least it’s well in hand. And often the beneficiaries respect the choice of the executor. The deceased is gone. The beneficiaries will say well, you know what, they trusted so and so to be the executor. I’ve got a bit of trust there. And when you communicate, you encourage the trust and that’s a…we find a really helpful thing.

The other part of this, and again, these early days of being an executor in terms of your duties can be a bit hectic, but obviously it’s determine the nature and extent of the assets and liabilities of the estate. You know, find out where everything is, get the bank accounts, the financial investment accounts and insurance proceeds or things like that rolling and getting that pulled in. As an aside, it’s an interesting sort of debate you find sometimes with financial advisors, and certainly in Canada, that the law is quite clear and expressly clear that as long as you’ve got a Will, a notarial copy of it, you should be able to put that to…I tell my clients you should be able to put that to the financial advisor and tell them to sell the assets. Put it into cash, that’s one school of thought. Another school of thought is to wait till you get probate to distribute the assets. Now the idea that you can insist on the sale of the assets brings with it some controversy but it’s an option that you may want to consider. You may not want to play the markets anymore and you want to go into a cash position and distribute. For example, if there’s charitable bequests and so on, you want to get whatever’s there on the date of death or as close to it in a cash position and distribute it. Others choose to play the market. Some people play the market within the context of the trusts that are created under the Will. For example, if there’s a trust for the surviving spouse. The point is, is that you have a lot of flexibility and you can consider that flexibility in the context of your certain circumstances and the flexibility ranges right from, look I want to go cash or right to here. And in Ontario we have a provision under the Trustee Act which we call the prudent investor rules which say if you’re gonna hang on to assets, this is how you do it and here are the rules. And Section 27 of the Act really, truly codifies those rules and gives people some guideposts as to how they should deal with the investments.

So I think we’re around 6 or 7 duties and we’ve got more and we’re gonna enjoy having discussions on each of those as we work through it, but we’ll post the first…next few that we’ve just talked about today on our web. And we appreciate you joining us as always. I’m almost certain we’ll get Suzana back shortly and thanks for taking the time to watch our podcast.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag. The podcast that you have been listening

to has been provided as an information service. It is a summary of current

issues in estates and estate planning. It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

 Listen: Why

This week on Hull on Estates and Succession Planning, Ian continues his discussion on the book Start with Why By Simon Sinek.  This book can be found in the Hull & Hull LLP Reading Center.  Ian discusses why one becomes an executor and what it means to be an executor. This is followed-up with his first three duties for an Estate Trustee.

1. Make proper funeral and burial arrangements.
2. Determine that the Will appointing the Executors is the last will and testament.
3. Make provisions for the immediate needs of any dependants.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull – Click here for more information on Ian Hull.

Listen: Year of 2011

This week on Hull on Estate and Succession Planning, Ian discusses the year of 2011. Specifically, he discusses the book Start with WHY by Simon Sinek, which can also be found in the Hull & Hull LLP Reading Center. Ian examines the question of why in regards to estate planning issues and contentious planning matters.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull – Click here for more information on Ian Hull.

Year of 2011 – Hull on Estate and Succession Planning #219

Posted on January 18, 2011 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. The podcast you’re listening to will provide information and insights into estate planning in Canada. From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Ian Hull: Hi and welcome to Hull on Estates and Succession Planning. This is episode #219.

Hello and welcome back to Hull on Estates and Succession Planning. Suzana and I have taken a slight pod break but we’re back on air, 2011 with lots of vim and vigor and all kinds of topics that we want to cover over the next year. We hope everybody had a nice holiday season and although we’re well into January now that this podcasting is being launched, we want to welcome everyone back from our little pod break…podcast break. Over the holidays…oh and sorry you’ll notice that Suzana isn’t with me today…on either side and we’re podcasting without her and she will hopefully be back for our next one, if not the one after. She’s engaged in a big mediation right now. 

I’m gonna start off with this year with a podcast about the year of 2011 and something that I’m trying to do more with my clients, and I’m hoping that people are trying to consider generally when we’re dealing with estates and trusts and potentially or actual contentious matters with estates. And I…over the holidays I had some time to read some books and one of the books I read was a booked called “Start with WHY” and it is a book by Simon Sinek and it’s on our preferred reading list on the web page that we have updated regularly. And the link to the book is there. But it talks about starting with ‘why’. And I thought what might be a good idea for our…and I’m gonna start pushing on my clients to do…is let’s start with ‘why’ when they come to see me about dealing with (a) estate planning issues or (b) dealing with contentious estate planning matters.

I often face the different types of litigation that we see in our office with a great deal of hesitation. I know the turmoil and the pain that the litigation will be for the client and it’s like telling a teenager about the risks going forward. They don’t understand them until they’ve lived through them. So there’s a certain amount of, I find with my clients, a little bit of…my warnings go on deaf ears. And that’s okay, of course, and it’s appropriate because that’s a personal choice that the client wants to make. But it seems to me that we need to press back and consider ‘why’. Why exactly are we pursuing the litigation? And consider today the question of ‘why’ in the context of the types of contentious matters that arise, certainly in every day-to-day practice.

The two key components to any matter at our office that we deal with is (1) communication and (2) transparency. Communication about what we’re thinking, about how we’re seeing the dynamics unfolding as the litigation or as the contentious proceedings move on. We are always working at better communicating those thoughts and those concepts to our clients to keep them up-to-date (a) but (b) to let them know where we think the matter is proceeding, both from a strategic and from a legal standpoint. 

And secondly, the transparency – the transparency between both the client and the individuals, individual lawyers and of course, the transparency within the litigation. We need to hold our…obviously we hold our cards close to our chest and are there for the number one goal of protecting our client’s interests, but sometimes the transparency can be so important. And where transparency can be so important is, of course, and one of our general themes throughout our podcasts is, when planning. Forget the contentious side because that can be tied to strategic advantages to proceeding and certain information being disclosed at certain times. But on the planning side, the strategy tends to be more wide open. And again, I will ask myself and ask my clients to consider ‘why’. Why do I want to communicate my future thoughts in terms of my estate plan? And why do I want to be transparent? Well we’ve talked many times in our podcasts about the benefits of the ‘why’, the benefits of transparency and communication. But I wanted to think…I was thinking about it when I was reading this book. And what is the ‘why’? When we wake up in the morning and we consider pursuing our estate plan, or we consider pursuing a litigation plan within the context of our estate, why are we doing it? And I like to ask myself, and I’m gonna use 2011 as a reminder to me to ask my clients too, when they come to see us about a contentious matter. For example, we have a series of podcasts that deal with how a Will challenge proceeding is conducted. And we have my father’s video on-line where he explains in his views some of the real core components of a Will challenge and a piece of Will challenge litigation. That’s the’ what’ and we have dedicated our website and we’re continuing to dedicate our website to the ‘what’. But ‘why’ is only answered by the client. And certainly from my perspective, I’m gonna start to be more vigilant to ask the clients why. And why do they want to engage in the litigation? Is it a variety of factors? Is there more factors? Is it more overwhelming than the other? And the Will challenge litigation is an easy illustration of that, because the ‘why’ to pursue that litigation is a choice. And it’s a choice. Whereas when we have dependant’s relief applications or situations where our clients or we’re defending them or in the context of a dependant’s relief application, it can be the ‘what’ in the sense that they need the money. The spouse has not been properly treated, not given enough money during his lifetime, the Will does not provide for it. So you bring a dependant’s relief application. That’s because the ‘what’ is, I need money for my client.

Whereas when we get back to the ‘why’ in the context of estate litigation and Will challenges, sometimes it’s about the money. But sometimes it’s about far more than the money. And what we’re finding more and more when we’re pressing on that issue of the ‘why’…we’re absolutely capable to do with the ‘what’…the ‘why’ helps us deal with the ‘what’. Once we get a better understanding of why our clients are proceeding in the way that they want to proceed in the context of the litigation that they want to proceed, that can have a tremendous impact refining and directing our litigation in a very surgical and a very pointed way. And it seems to me that’s where the efficiencies can start to come into play in the context of the ‘what’.

So I’ve used ‘why’ and ‘what’ back and forth and in the context of two different choices – a dependant’s relief application where the ‘what’ is, we need the money; and a Will challenge where the ‘why’ is not necessarily driven by the money. And it’s driven by different factors, why they are pursuing that litigation.

So I look at the other kinds of litigation that we’re involved with and I think to myself, from our perspective anyway, when we’re looking to remove a trustee, the question of ‘why’ needs to be answered at the outset or at least needs to be framed at the outset so that then we can proceed with the ‘what’. If we’re not happy, my client is not happy with the actions of the existing trustee, why are we trying to get them removed? Well is it partially because they’re putting the estate assets in jeopardy? Or is it partially because we just don’t like them? And once we can drill down on the ‘why’, we can then create our plan going forward and our ‘what’ going forward.

So again I thank the author, Simon Sinek, for alerting me of the ‘why’ and the ‘what’ distinction. I hope I haven’t been too confusing with the ‘why’ and the ‘what’ today but I thought that it was a great way to illustrate our starting point into what is going to be an exciting year of podcasting with myself and Suzana. And we look forward to being back on air more regularly after we’ve taken our Christmas extended break from podcasting. So welcome back to everyone and I look forward to our next podcast.

Thank you very much.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag. The podcast that you have been listening

to has been provided as an information service. It is a summary of current

issues in estates and estate planning. It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

Listen to: Mutual Wills

This week on Hull on Estates, Paul Trudelle and Rick Bickhram discuss a recent case out of the B.C. Supreme Court that applies the mutual Wills doctrine and discusses what Will be needed in order to find a mutual Wills agreement.

For more information on Brewster v. Lenzi, 2010 BCSC 1488 (CanLII), please click here.

If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

Paul E. Trudelle – Click here for more information on Paul Trudelle.

Rick Bickhram – Click here for more information on Rick Bickhram.

Mutual Wills - Hull on Estates- Episode #232

Posted on December 14, 2010 by Hull & Hull LLP

Rick Bickhram: Hello and welcome to Hull on Estates. You are listening to episode 232 on Tuesday, December 14, 2010.

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.

Paul Trudelle: Hi and welcome to another episode of Hull on Estates. I’m Paul Trudelle.

Rick Bickhram: And I’m Rick Bickhram.

Paul Trudelle: Hi Rick. How are you today?

Rick Bickhram: I’m doing well. How are you?

Paul Trudelle: Good, good. The year is quickly winding down.

Rick Bickhram: It is and this is one of the very few podcasts left for the year.

Paul Trudelle: Yes, I think it’s my last one for 2010 so I wanted to thank you for participating in our podcasts this year and thank our audience for listening this year and I hope everyone has a great holiday.

Rick Bickhram: Yes. I would like to wish everybody happy holidays out there and I hope everyone enjoys it.

Paul Trudelle: And happy New Year. We thought we’d end the year by discussing a recent case out of the BC Supreme Court that talks about mutual Wills and applies the mutual Wills doctrine and discusses what will be needed in order to find a mutual Will agreement.

Rick Bickhram: Absolutely. And I think it’s the facts in this case that makes this case particularly unique. And it was Paul that pointed it out to me. And again, I guess I’ll just jump into the facts right away.

Paul Trudelle: Sure.

Rick Bickhram: And Paul will jump in and put in your two cents whenever you feel fit. So in this situation we have Peter and Lena. And this is their…both their second marriage. They’re both pretty elderly. I think the wife…Peter was 64 years of age and Lena was 69 years of age.

Paul Trudelle: That’s not actually very old, Rick. You’re showing your youth. They were…yes, they were middle-aged, let’s say, at worst.

Rick Bickhram: Okay, we’ll leave it at that. And they had their assets during their lifetime that they had accrued but when they originally got married, they moved into Peter’s residence and then they decided that they were gonna each contribute one-half of the purchase price of a condominium.

Paul Trudelle:   Right. And I think it’s important to note that they both contributed to that condo but for the most part they kept their finances separate other than that one joint purchase.

Rick Bickhram: Absolutely. And that’s a very important fact here. After they each contributed one-half to the purchase of the condominium, they moved into it where they lived for I would say about 6 to 7 years until the husband, Peter dies.

Paul Trudelle: Yeah, he died in 1997.

Rick Bickhram: During their marriage, they had…both Peter and Lena agreed to execute Wills, mutual Wills. And those of us that are not really familiar with mutual Wills, I’m gonna ask Paul to jump in here and maybe he can explain a little bit more, better than I can.

Paul Trudelle: Yeah, the mutual Will, I guess, is a finding that the Court makes. It will apply in the circumstances where in this case Peter and Lena both made Wills. They agreed that they would transfer one-half of the contents and their one-half interest in the matrimonial home to the other, to the survivor. And then upon the survivor’s death, it’s going to go to specified parties. And in Peter’s case, if he died first, the property would go to Lena and then when Lena died, it was going to go to Peter’s daughter by a first marriage, the plaintiff. If Lena was to die first, Peter would get Lena’s interest and then when he died, Lena’s half would go to Lena’s nephew and niece. That’s the mirror Will type provisions that we often see. It would be a mutual Will if those provisions were put in place and there was an agreement found that upon the death of the first that those terms became irrevocable. And that was the issue here because as it turns out, after Peter died, Lena made a new Will that left…that didn’t leave half of the property to Peter’s daughter but in fact gave the entire property to Lena’s niece and nephew.

Rick Bickhram: Absolutely. Well that’s exactly what happened here was they had the mutual Wills. Peter dies. Lena doesn’t die as yet but she executed a subsequent Will and in that subsequent Will it names…she leaves the residue of her estate to the two designated beneficiaries that would have taken which is I believe one was her niece and then the other one was…

Paul Trudelle: A nephew.

Rick Bickhram: A nephew.

Paul Trudelle: Yeah. And the Court says that “When the fact of the new Will and Mrs. Lindsay’s (Lena’s) apparent intention to disregard the alleged agreement came to the attention of the plaintiff, she commenced this action”. What’s not clear is how the daughter found out about the new Will that Lena had entered into. But in any event she found out about it and cried foul, stating that that would be a breach of the mutual Will agreement. So the issue was whether there was a mutual Will agreement and whether Lena was bound by it. The Court looked at the terms of the Will itself and there were mirror terms saying that Peter’s share would go to Lena and then it was to go to half to his daughter. The Court correctly quoted the facts…sorry, the law in the area saying that those terms alone aren’t enough for…to found a finding of mutual Wills. What you’d need is something more than that, that shows an agreement that the recipient agrees to be bound by the terms of the mutual Will. And so the Court then turned to whether there was that…whether there was enough evidence to show that Lena agreed at the time of the making of the Will to be bound by those terms.

Rick Bickhram: And I think that’s the interesting and the very neat little tweak in this whole…in this case is that the Court comes out and says, you know what, even though you guys have mirroring provisions in the Will, we want more proof. We want some sort of corroborating evidence to indicate that there was an agreement before I decide to hold both Lena mutually…or impose some sort of obligation on Lena to be held responsible, to hold that half of property in trust for the beneficiaries of Peter’s estate. And in this case, the plaintiff heir which is his daughter, Lorraine.

Paul Trudelle: Right. And the Court went on to consider the evidence and whether there was such an agreement. And I think there’s two important points there: one is the actions of Lena after Peter’s death served to confirm the agreement; and secondly was independent evidence from a friend of the family that served to confirm that agreement of mutual Wills. Let’s first turn to what Lena did after the deceased passed away. I think at that time she did go to see a lawyer. The lawyer was addressing concerns raised by the daughter and the lawyer spoke to Lena allegedly and wrote back saying that Lena intends to be bound by the agreement.

Rick Bickhram: Yeah, I thought that the daughter wanted to go on title to the condo because the condo was originally held in joint tenancy. So when you have an asset held in joint tenancy, there’s a possibility that it may go by right of survivorship, and I use that word very lightly…or very loosely because we all know that there’s this constructive trust argument. So that’s what the daughter raised in the situation. She said that Lena, you are holding this property in trust for me on the basis of that mutual Wills’ argument. 

Paul Trudelle: Yes and I think that’s the way to get around the joint tenancy issue. I think it would have been open to the Court to consider whether this was jointly held property and whether it passed to Lena outside of the estate and therefore the Wills didn’t quite govern. The Court did discuss briefly, though, whether the joint tenancy was severed by the terms of the mutual Will agreement. Also alluded to the trust claim that the daughter would have against this jointly held property. The Court did consider the fact that Lena did…confirm or agree that she would be bound by the agreement. It appears that there was an issue at trial as to whether that agreement was actually authorized by Lena and for that reason, I think we heard evidence from Lena’s lawyer at the time who said yes, he met with Lena and they discussed it and this was her agreement. It looks like Lena tried to distance herself from that evidence but the Court did accept the evidence of the lawyer.

Rick Bickhram: Absolutely. And that’s pretty strong evidence. You have a family friend who comes in to corroborate hey, there is a mutual Will here and by course of conduct, that mutual Will kind of severs the joint tenancy. And then we have subsequent testimony from the lawyer, and it’s Lena’s lawyer, and his evidence is again Lena was aware of the agreement, she acknowledged it and I don’t…that’s pretty tough evidence to get around so…

Paul Trudelle: Yeah, and I think that strongly supports the judge’s conclusion that there was a common intention at the time the Will was entered into that the property…half of the property would go to the survivor and upon the survivor’s death, it would go as the parties agreed when they entered into the Will – half to Lena’s side and half to Peter’s side. So in order to…the remedy that the Court imposed was a finding that Lena held half of the condo in trust for Peter’s daughter from his first marriage. There was an agreement, it appears, that Lena would be able to live in the property during her lifetime and it would only pass upon her death.

Rick Bickhram: So basically she gets a life interest and then subsequent to her passing, the proceeds I guess would be divided or…I don’t know how.

Paul Trudelle: It would be sold and half would go to Peter’s…

Rick Bickhram: Peter’s estate.

Paul Trudelle: Yeah, Peter’s side and half would go to Lena’s side. Well, it’s an interesting decision. And we’ll put the link up to that decision on our website in our show notes. We thank you for listening. If you have any questions, please feel free to write to us at estatelaw.hullandhull.com. That’s our website. You can write to us at hull.lawyers@gmail.com or visit our website where you’ll find notes on this podcast and other podcasts and blogs as well.  

Rick Bickhram: We hope that you enjoyed the show. I’m Rick Bickhram.

Paul Trudelle: I’m Paul Trudelle. Thank you.

Rick Bickhram: Until next week, so long.

Paul Trudelle: Bye.

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.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network.

This week on Hull on Estates, Nadia Harasymowycz and Natalia Angelini discuss preparing for trial, specifically when doing a Will challenge.  

If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

Nadia M. Harasymowycz -  Click here for more information on Nadia Harasymowycz

Natalia R. Angelini – Click here for more information on Natalia Angelini.

Preparing for Trial - Hull on Estates- Episode #231

Posted on November 30, 2010 by Hull & Hull LLP

Natalia Angelini:  Hello and welcome to Hull on Estates. You’re listening to episode number 231 on Tuesday, November 30, 2010.

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.

Nadia Harasymowycz: Hi and welcome to another episode of Hull on Estates. I’m Nadia Harasymowycz.

Natalia Angelini: And I’m Natalia Angelini.

Nadia Harasymowycz: 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: So hey Nadia, I think this is our first time podcasting together.

Nadia Harasymowycz: I think it is.

Natalia Angelini: So this should be good.  We’re doing an interesting topic for us since we just came out of some pretty intensive trial preparation. We thought it would be timely to discuss preparing for trial and particularly when you’re doing a Will challenge.

Nadia Harasymowycz: I think one of the things as litigators we often forget in the estates world is that most of our matters probably don’t get to full on trial prep and we end up doing a lot of mediation and settlement beforehand and the nuances of preparing for trial are often not as honed as we’d like them to be.

Natalia Angelini: Right, but the good thing about preparing for trial is that it does force you to get all of your ducks in a row and if you’ve got that in mind from the outset, I think it does help streamline your case. And we thought we would sort of say some things that we find helpful.

Nadia Harasymowycz: If we take it back to basics and look at how to start preparing for trial, you need to look at all the people with a financial interest or who may have a financial interest in the proceedings to make sure that they’ve been given notice. You don’t want to end up at your first day of trial and find out that somebody who should have been there actually isn’t.

Natalia Angelini: Right that would be a huge waste of expense. I think you’d have a client, a pretty upset client at that point. But yeah, I think that goes without saying, that you want to have that in place. Also another thing that you would want to have that should go without saying is having a complete understanding of the inventory of the assets of the estate.

Nadia Harasymowycz: That’s clearly critical when you’re challenging a Will to determine who the beneficiaries are, what their rights are going to be, and what kind of assets you’re dealing with if you are going to be proceeding so that you can argue it properly.

Natalia Angelini: Right and when we talk about moving on to your client and what your client’s personal circumstances are and what the personal circumstances of the witnesses are, I think it’s really important to think about their age. Because their age and health circumstances and even financial circumstances, I’ll get to that in a moment. But when it comes to their age and health status, if it’s necessary, you know you want to think about maybe taking evidence before trial, under Rule 36 of the Rules. Bianca La Neve and I podcasted on this some time ago, but you really want to avoid the situation where you’ve got, you know, elderly witnesses that develop some kind of problem or unfortunately pass on before you get to trial and then you’ve potentially compromised your case. So I think it’s good to keep an eye, especially in this type of…especially in this field, when you’re dealing with older witnesses most of the time that you keep that consideration top of mind.

Nadia Harasymowycz: Even if the individual you’re… you have as a witness or is your client is not necessarily in a position that their age would be a consideration in respect of maybe not being able to appear at trial, it should be given some consideration so that you recognize the fact that the client or the potential witness may never have been involved in litigation, may not understand the requirements of being a witness or what the process will be. And so preparing them for those kind of situations will be critical to your trial prep.

Natalia Angelini: Right and touching on the point I raised earlier about financial circumstances, you know, given that the trend of cost awards in estate litigation has gone towards a loser pays system, like the civil system, clients I suppose, should know that this is the trend and that there is a risk in going to trial and a very costly thing to go to trial.  And, you know, we like to have that discussion right at the outset and definitely at other times throughout the litigation, where needed. Which is why we, you know, are quite happy to go to mediation in most or all of our cases because, you know, it’s a great tool we find in really forcing the parties to realistically look at their financial interest and look at the assets that are at stake. And you know, more often than not, come to a resolution.

Nadia Harasymowycz: I suppose if all those avenues fail and you do end up at trial, it’s important to look at the legal issues themselves and ensure that you’ve properly researched all the potential areas that are going to be brought up at trial. Generally, as we mentioned, we’re going to be discussing Will challenges today and if you’re looking at setting aside a Will, looking at the lack of testamentary capacity, whether or not there’s undue influence, if suspicious circumstances and lack of knowledge and approval surround the execution of the Will, whether or not there’s due execution, if there’s fraud or forgery and fully flushing out those issues before you get to the eve of trial is really important.

Natalia Angelini: Right and one of the ways to do that is at discoveries making sure that you’ve got…or even through your Order for directions, but I mean, definitely by discoveries you want to be able to get the medical evidence and medical opinions that would be relied on. And that would include, you know, hospital records, doctors’ records.  Even, you know, solicitor’s records which can speak to some of those issues and are really quite key in a lot of cases.

Nadia Harasymowycz: And that brings me back to one of my earlier points actually that you can’t ever forget that when you’re preparing witnesses for trial, after you’ve reviewed your hospital records, your solicitor’s notes, that the evidence of the individuals who made those records is going to probably be key to your argument and noting that trial is a unique experience for them and making sure that they understand the importance of their evidence and how to present it at trial.

Natalia Angelini: Right, I mean, I think in a lot of Will challenges the lawyers that are giving evidence are not necessarily litigators.  They’re usually, you know, estate planning counsel and they may be just as uncomfortable with testifying as any other person. So carefully preparing them is definitely going… can’t hurt, it can only help.

Nadia Harasymowycz: I think along that line if you’re looking at the evidence of, you know, the hospital records or individuals who are relevant to the litigation, you need to keep that in mind when you’re preparing your Requests to Admit and your Evidence Act notices which have to be filed timely prior to trial so that you can move towards a simpler and more organized trial in general.

Natalia Angelini: Right. And you know we all know that our experts have to be lined up well in advance and you know the Rules have requirements, not just for the content of the report, but also, you know, the expert’s got to sign a document acknowledging their duty to be neutral and you’ve got to make sure you’ve served their CV as well in accordance with the timelines under the Rules.  So having all that diarized, you know, we found that to help us.

Nadia Harasymowycz: I think as a last recommendation I would suggest that while you’re going through all your preparation and witness notes and documents, it may be helpful to prepare a chronology of events that has been run by opposing counsel or opposing parties, simply in order to assist the judge and all the parties at the trial while the evidence is being put forward. If you have an agreed upon Statement of Facts it’s also helpful to have an agreed upon Chronology.

Natalia Angelini: Right, and before we end though, I did want to speak about your cross-examinations on trial that you’re going to be preparing for. You know, if suspicious circumstances have been alleged, then it’s gonna affect how you want to organize your witnesses. For example, you know, the propounder of the Will should really work through witnesses so a clear story can be told.

Right. And before we sign off, I did want to touch base on preparing your examination notes on a Will challenge. And if you’re going to be examining the lawyer whether you’re propounding or challenging, I think it’s important to cover topics like, getting that evidence out of the solicitor about their general practice when drawing Wills, specific recollections made, you know, with respect to preparing the Will. You know, referring the lawyer to the Law Society Rules which …sorry, not the Law Society Rules, the guidelines, the Law Society guidelines that relate to drawing Wills and you can use that as a type of benchmark. 

And you can also, you know, get that other information about how familiar the lawyer was with the client and for how long and what they did to ascertain capacity. And then, you can, you know it’s good to go over the issue of, you know, the testator’s assets and what questions were asked by the lawyer about those assets and what investigations were made about the possibility of the exercise of incapacity or… sorry the exercise of undue influence or a lack of capacity. So it’s good to cover all of that, no matter what side you’re on when examining the lawyer for the deceased.  And it may be… it seems to us that there are different…you want to take different approaches when you’re acting for someone who’s propounding the Will or challenging the Will. So when you’re propounding the Will you may want to consider, first you know your focus is proving the Will.  So once you elicit that evidence to establish that there was due execution and then you examine your lawyer who prepared the Will and took instructions to attempt to deal with the issue of testamentary capacity and knowledge and approval and even undue influence and suspicious circumstances, if it’s applicable to your facts. And then you can, you know, call other professionals like doctors, followed by interviewing or…sorry, examining relatives and friends of the deceased who knew the deceased’s condition around the time of execution. So you, sort of, that’s the order of examining and eliciting evidence that we find is helpful.

Nadia Harasymowycz: And then if you’re a Will challenger you should start off by potentially looking at the attending physicians or nurses or any medical staff that may have relevant information and then call on lay witnesses and conclude with a lawyer who can give evidence on any prior Wills that were prepared by the testator.

Natalia Angelini: Right. So I guess that’s the different approach you take because you’re on the attack and you really want to draw the focus to the lack of capacity, the undue influence.  I guess you would elicit that from your other lay witnesses, and finally the, you know, provisions of prior Wills that would, I presume, help your case. So of course this isn’t, you know, this isn’t set in stone, these are just our thoughts based on what we find is helpful when dealing with a Will challenge scenario, be it either on the side of the propounder or the challenger. So I think we can... I think that’s brings us to the end of our podcast today.

Nadia Harasymowycz: Thanks for listening and thanks for joining me today, Natalia.

Natalia Angelini: Thanks, Nadia.

Nadia Harasymowycz: We look forward to hearing from our listeners. You can send us an email at hull.lawyers@gmail.com.  Be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law. We hope that you enjoyed our show.  I’m Nadia Harasymowycz.

Natalia Angelini: And I’m Natalia Angelini, 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.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network.

 Listen to: Interesting and Informative Books

This week on Hull on Estates and Succession Planning, Ian and Suzana discuss what they are currently reading for business and pleasure.

Some of the books they discuss are:

·  The 50 Biggest Estate Planning Mistakes . . . and How to Avoid Them by Jean Blacklock and Sarah Kruger

·  The High Road by Terry Fallis

·  The Final Call by Kerry Fraser

·  In Bound Marketing by Brian Halligan and Darmesh Shaw

·  Say it with Series by Gene Zelazny

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull - Click here for more information on Ian Hull.

Suzana Popovic-Montag – Click here for more information on Suzana Popovic-Montag.

Interesting and Informative Books – Hull on Estate and Succession Planning #218

Posted on November 29, 2010 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. The podcast you’re listening to will provide information and insights into estate planning in Canada. From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Suzana Popovic-Montag: Hi and welcome to Hull on Estate and Succession Planning. You’re listening to episode 218 of our podcast.

Ian Hull: Hi Suzana.

Suzana Popovic-Montag: Hi there Ian.

Ian Hull: Well welcome back.

Suzana Popovic-Montag: Thank you very much.

Ian Hull: You’ve been much missed. We’ve had to do a couple solo performances.

Suzana Popovic-Montag:  I apologize for that.

Ian Hull: So … no it’s all good. Never say sorry on a podcast. We’re always happy to have you. Alright so what we thought we would do today it came out of a recent sort of barrage of enquiries and when I say barrage it wasn’t in the thousands.  But I had a few people asking me and…coincidently at the same time, what are you guys reading? What is Suzana reading? What are you reading these days? And I’m a bit of a zealot with technology so I’ve got my Amazon Kindle quite a while ago.  I guess we both have had it for about a year and a half. All of the readers are excellent and quite frankly, I don’t really know enough about the other ones because I only use the Amazon Kindle because that’s the one we early adopted to. But we thought today we’d talk in our podcast a little bit about what are we reading in the sense of...it is…you know these are sources of materials that we’re getting from other podcasts and other bloggers.

Suzana Popovic-Montag: And I just wanted to start, Ian with firstly a book that has been done by Jean Blacklock and Sara Kruger. And I know we’ve previously referred to it and it’s “The 50 Biggest Estate Planning Mistakes… and How to Avoid Them”. And I think that this is an excellent book and as we’ve talked about in our earlier podcast, it really is one of those kinds of things that you hate to admit that you actually do read as a practitioner but it is full of sort of horror stories and things that we certainly try to avoid on a daily basis. So I think I highly recommend it and I know that you’ve enjoyed it and actually have some kudos attached to your name at the back of the book as well.

Ian Hull: I do have my name on the back, but not on the front where these good authors have properly placed themselves. It’s a great book, it’s a super sort of summary of some of the key mistakes in estate planning and it’s just literally out the last week or so. It’s called “The 50 Biggest Estate Planning Mistakes… and How to Avoid Them”. And I like the “and how to avoid them” because it’s not just all about saying how where the problems are, it’s also like we like to do, about what are the solutions.

Suzana Popovic-Montag: And as we go through the books that we talk about today, I just want to remind people that not necessarily all these books are available to be downloaded.  Some of them still come in the traditional hard copy format. You actually have to go to the book store to purchase them. But certainly definitely worth trying to see if you can get them downloaded, if that’s your preferred way of reading these things.

Ian Hull: So as we, certainly for me, I sort of look at my category of book reading as, some fun stuff and non-business and business related. And I would say that “The 50 Biggest Estate Planning Tools” obviously illustrates a business related book. A non-business related book and one that we’ve about in previous podcasts is of course “The High Road”. And “The High Road” is the novel written by Terry Fallis and it’s just come out in soft cover.  We have heard that it’s on as I’ve said in my previous podcast, it’s on Canada Reads.  It’s one of the top ten books to read. So that’s a fun novel.

Suzana Popovic-Montag: That’s for sure.

Ian Hull: The other fun book we have, and we’ll come back to some business ones, is a great book by Kerry Fraser and it’s called “The Final Call”. And Kerry was good enough to invite me to the book launch a couple of weeks ago and we had a really interesting fun time down at Gretzy’s restaurant. And he spoke about this, it’s a phenomenal book and I’ve read it now, really enjoyed it, some great hockey stories for those of us who like the folklore of hockey.  And some of us who remember Kerry Fraser, of course, being the referee that didn’t call the penalty on Wayne Gretzy in 1993, I think it was.  And we didn’t make it into the finals against the Montreal Canadians. So that’s not his only call but it’s a great book and interesting book for sure. Now coming back to the business books, why don’t we talk about our next one?

Suzana Popovic-Montag: The next one is a great book by Brian Halligan and Darmesh Shaw and it’s called “In Bound Marketing -Getting Found using Google, Social Media and Blogs”.

Ian Hull: So this book is interesting to me because we read a ton of social media and blogging books, always trying to see sort of what other people are thinking. This is, in my view, anyway if not the best, one of the very best sources of how to get your head around all of the angles and all of the approaches that we want to consider when we’re blogging and podcasting. And I’ve got both of this.  I actually have it on my Kindle and I have it on in a hard copy. Now it sounds a little strange but the Kindle has a reader on it and so I can listen to the book and I might pop around, go back and forth on chapters. And then I also sometimes, not all books, but I sometimes like a hard copy. This is one of those books that I’ve used so much that I keep coming back to it and so the hard copy was important.

Suzana Popovic-Montag: And I just wanted to take a chance just to read a little bit off the back of this in terms of understanding what in bound marketing is all about and how it’s contrasted with outbound marketing. And I think the authors succinctly state it when they say that when you want to connect with today’s buyer, you need to stop pushing your message out there and actually start pulling your customers or, in our case, your clients in. The rules of marketing have changed and the key to winning them is to use this change to your advantage. And it’s very interesting to have the focus on these social media techniques that we are so much looking into these days and how we’re trying to draw our clients in as opposed to pushing our messages out.

Ian Hull: Alright well this is, as I say, a terrific book and we can’t say enough about it.  I will say, too, and thanks to Daniel Debow who is the CEO of Rypple, another phenomenal program that we’re using in our office and we've spoken about it at other podcasts. He’s the guy that called me up and said, I know you’re doing a lot of this work, this is the book to read.  And he didn’t have to convince me for long because I’m really glad that he did and I’m glad that we’ve been able to enjoy it. 

The last sort of few business related books we wanted to talk about are on my Kindle and they’re not actual hard copy books and they really are, you know, a big help to me.  And the series that I have just purchased and bought and I’ve only gone through about half of them now is the series called “Say it With”. And it’s “Say it With Presentations”, “Say it With Charts” and “Say it with Charts, sort of, Revised” and in more detail. So there’s three books.  They’re all written by Gene Zelazny.  I’m saying it wrong but I’ll spell it right in the show notes. But the “Say It With” series that he has written is phenomenal, helps with presentation skills for both your visual and with charts and so forth and your presentation skills just generally and some of the techniques that are really useful. 

The other book that I do say that is probably the very best marketing and presentation book I have on here is a book about Steve Jobs and I, of course, am forgetting the name because I’ve read it like three times and I haven’t read it for a little while.  But it’s…we’ll put it in our show notes as well, and it’s a phenomenal book about… it’s a book on Steve Jobs and the theory, of course, behind that is that he is perceived by some as the greatest sort of on-line presenter and personal presenter in the business now. And that book has really been a big help. 

So those are sort of just a summary of the books that we’ve used.  The source is the Kindle, the hard copy books.  And the last thing I just want to say is managertools.com, a series that we listen to all the time, their podcasts, they’re a phenomenal group. They’ve also put out a listing of book reviews and you can go on-line and track their down what they say and they’ve put down I think about fifty or a little less than fifty of their favorite books to read. And I highly recommend it.  We’ve probably read about a third of their list and we’re working on it. So thanks very much for joining us. Thanks, welcome back Suzana.

Suzana Popovic-Montag: Thank you.

Ian Hull: And that’s the end of our attempt to give you a little bit of an idea of what we’re reading.

Suzana Popovic-Montag: Thanks very much.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag. The podcast that you have been listening

to has been provided as an information service. It is a summary of current

issues in estates and estate planning. It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

This week on Hull on Estates, David Smith and Julia Evans discuss remedies for breach of fiduciary duty by attorneys for property acting on behalf of their incapable grantors.

If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

David M. Smith - Click here for more information on David Smith.

Julia Evans - Click here for more information on Julia Evans.

Remedies for Breach of Duty by an Attorney for Property - Hull on Estates- Episode #230

Posted on November 23, 2010 by Hull & Hull LLP

David Smith: Hello and welcome to Hull on Estates.  You’re listening to episode #230 on Tuesday, November 23, 2010.

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.

Julia Evans:  Hi and welcome to another episode of Hull on Estates.  I’m Julia Evans.

David Smith:    And I’m David Smith.

Julia Evans:  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.

David Smith:    Well Julia, you know, today we thought we’d talk about a topic that was top of mind from our recent mutual attendance at the Estates and Trusts Summit in Toronto put on by the Law Society of Upper Canada. But in addition, we thought that considering the nature of our practice, we certainly run into the issues that we’re going to discuss quite frequently and of course what I’m talking about are Powers of Attorney and the whole idea of what remedies are available where there’s a breach of a Power of Attorney.  And in particular we’re talking about Powers of Attorney for property as opposed to personal care, right?

Julia Evans:  Yes and of particular note was a paper presented by Professor Freedman from Queens University Law School and he made an important distinction between the kinds of duties that an Attorney for Property owes the grantor of the property where the grantor is capable and the Attorney is acting on their behalf and where the grantor is incapable and the Attorney is acting on their behalf.

David Smith:    Okay, well let’s… let’s break this down a little bit.  So if I’m a grantor of a Power of Attorney, go to my lawyer’s office, make a Power of Attorney appointing my wife, let’s say, as my attorney for property and I’m out of the country and she uses that Power of Attorney for Property under my authorization.  What’s the nature of the legal duty there?

Julia Evans:  Well there’s also… I think when everyone looks at a legal relationship, it’s important to appreciate the multiple dimensions that may be at play.  So clearly, there’d be a standard of care required, a duty of care to be met.  But in addition, if she is a mere order taker, an instruction taker from you, one would think that her duty is that of agency.  And therefore, if she were to breach that obligation, that the remedy would be a remedy that reflected the content of the duty breached.

David Smith:    Okay, so if we break this down a little more, if I’m the principal… as I understand the principal/agent relationship, the agent is not permitted to act except under my authorization, correct?

Julia Evans:  Yes.

David Smith:    That’s the essence of an agency relationship, isn’t it?

Julia Evans:  Yes.

David Smith:    And so, if an agent acts outside of their authority that I grant to them, I’m gonna be, as the grantor, upset first of all, and I’m going to be the one, presumably, who is going to pursue remedies against the agent, correct?

Julia Evans:  Yes.

David Smith:    Alright.  And so what kind of remedies do we talk about in the agency context?

Julia Evans:  I think they’re akin to remedies for breach of contact.  And the quantums then are akin to the quantum and remedy we find for breach of contract.

David Smith:    And presumably the parties to that kind of proceeding would be the principal effectively suing the agent, saying you didn’t do what I authorized you to do.  And fairly straight forward, I guess, kind of situation.  There’s nobody else who’s gonna have any privity to make that claim on behalf of the principal, right?

Julia Evans:  Right.

David Smith:    I guess the situation is a lot more complex in the context of an incapable grantor.

 Julia Evans:  Yes.

David Smith:    Alright, so let’s talk a little about that.

Julia Evans:  The Substitute Decisions Act, which is the statute that creates the possibility of attorney… Power of Attorney documents, expressly indicates that where the grantor of the power is incapable a fiduciary duty arises in the attorney acting on behalf of the incapable.

David Smith:    Let’s talk about fiduciary duties for a minute.  So using the same analogy if I’ve made a Power of Attorney, I’ve become incapable and my wife is my named attorney and is acting under that attorney, and under the power of that attorney, I guess the issue there is one of supervision.  I’m not any longer able to make sure that she’s doing what I would want her to do with that authority.

Julia Evans:  No and hence the reposing of trust in her, and the correlative duty of loyalty that she would owe you as grantor of the power.

David Smith:    Right, and so I’m presuming that in the absence of the grantor to watch over the attorney and supervise him or her, there’s a lot more, a lot greater temptation and a lot more opportunity for the attorney to misuse that power to their own benefit.

Julia Evans:  Perhaps so.  I think that’s why when a solicitor is receiving instructions from a grantor in terms of naming and appointing potential attorneys that the solicitor canvasses that very serious question about trustworthiness in the parties they’re considering appointing.

David Smith:    Right. And I mean we’ve seen time and time again in the litigation context disputes between siblings where mom or dad has become incapable, one of the siblings has Power of Attorney on behalf of the parent and another sibling makes allegations that his or her sibling has misused the attorney to their own benefit, whether or not that is, in fact, the case.  And let’s talk about the whole idea of procedure.  If there’s admittedly a fiduciary duty owed from a grantor to a Power of Attorney.

Julia Evans:  Well from a Power of Attorney to the grantor.

David Smith:    Oh right, so right, if there’s a fiduciary duty that exists between the two.  Thanks…thanks for that clarification.  And so if there’s a duty owed to the grantor by the attorney and the grantor is no longer able to enforce that, what’s standing do the siblings have to have the Court look into the actions of the attorney?  Do you run into that at all?

Julia Evans:  Once obliquely, and I believe that the siblings... one of the duties…lets back up for a second…one of the duties on an attorney acting for an incapable grantor is a duty to go and review the Will because often, when incapacity has moved into the life of the grantor, that will be the last Will.  So beneficiaries under that Will may have a kind of interest that would give them some standing to question the attorney acting and dealing with the estate, or the assets of the estate.

David Smith:    Yeah, I’m always struck by that, Julia.  I mean it’s a little bit… I’m just challenging you here, but it’s a little bit cynical, isn’t it, for a sibling to stand up and say to the Court, I’ve got a financial interest in the estate here and I want to make sure it’s preserved for my benefit.  I find that the judges sometimes look askance at a beneficiary under an estate long before mom and dad…mom or dad has passed away.  If they too clearly project their motivation as being to protect their inheritance, clearly there’s a contingent financial interest there.  But as we know under the Substitute Decisions Act the Court has the authority to grant leave to anyone to seek an accounting, if there’s reason.  So presumably if you file an Affidavit as the disgruntled sibling, you’d want to say not only do I have a financial interest on the death of the grantor, but in addition, you know, I’ve seen my brother driving a fancy new car, or taking vacations and I know he doesn’t have the money to do it and I think he’s using mom or dads money to benefit him or herself.  Right?

 Julia Evans:  Right.

 David Smith:    But it’s ... I think your point is certainly valid.  I mean the standing in principle comes from a place that is one of contingent financial interest.  I’m always a little weary when I’m in front of a judge of making that pitch too strongly because I think in the present climate, judges are very reluctant to in any way encourage children to think that there’s going to be any estate left for them. The concern always has to be mom or dad.  And in these proceedings too, there’s usually Section 3 counsel appointed, right?  Well Section 3 counsel, of course, is the counsel that’s appointed by the Public Guardian and Trustee pursuant to Court Order to represent the interests of the incapable person.  And in these kinds of disputes they always represent a really important part of the process.  But I recognize we’re kind of getting off track and we’re running low on time.  So in the remaining time we have, Julia, let’s just talk about this more interesting academic debate, which is, what remedy is available for breach of fiduciary duty in the context of an incapable grantor who has suffered damages because of the actions of the attorney.  And this is what Dr. Freedman was talking about, right?

 Julia Evans:  Yes and it’s ... I think it’s an interesting area to look into and probably requires or cries out for more research.  The starting point is usually disgorgement of whatever was inappropriately taken or taken in breach of fiduciary obligation plus all profits associated thereto and it can be quite a hearty restitution.  Now Professor Freedman’s suggestion was that this may work most of the time, but often the attorney who has misappropriated funds of the incapable grantor then stands to be beneficiary of the estate of the incapable grantor on his death.  And Professor Freedman is suggesting that perhaps the remedy for breach of fiduciary duty during the life of the grantor or even later is not sufficient and in fact suggests that the attorney, if in error under the incapable grantor’s estate, should perhaps forfeit his or her interest in that estate.  A couple of questions arise, and that is, you know, what is the impact of this on the other beneficiaries of the estate.  Is that a windfall and what is equity’s view of windfalls?  Secondarily, if one is concerned with punishment and deterrents and making sure that those kinds of objectives are met, maybe that might be more appropriately located in the legislature, the criminal law.

 David Smith:    Right. Now how does this... something that comes to mind when you talk about this potential remedy is the whole public policy idea. And, you know, one example is the Supreme Court of Canada case.  The name of the case escapes me but a few years back there was someone who murdered his wife who was the named beneficiary of her insurance policy and there’s very clear settled law in the Supreme Court of Canada quite rightly and obviously said, look you can’t benefit from life insurance if you murder the person who named you as beneficiary.   Is that in any way analogous to what you’re talking about here?

 Julia Evans:  It was suggested in the presentation by Professor Freedman, but I think the question can be asked that look, if the fiduciary has breached his or her duty to the incapable grantor and made full restitution, either that remedy is satisfactory for the breach or it’s not.  If it is, then what profit is there on the death of the grantor?  After all, the grantor presumably was made whole before his death.

 David Smith:    Right.  I mean one thing that sort of,  I think, comes through from what Professor Freedman was talking about and which is really highlighted in a lot of the cases is this whole concept of breach of fiduciary duty being the highest standard of care that a trustee can owe to the grantor. And in this case, you know, although the Trustee Act doesn’t specifically apply to attorneys in this context, clearly they’re subject to a fiduciary duty and because of that, you know, there’s very severe remedies available in certain cases.  You know, punitive damages, things of that nature do occasionally get rewarded… awarded rather in cases of breach of fiduciary duty.  So it sounds to me that what Professor Freedman is really arguing for is a sort of more thorough  exploration of remedies available for breach of fiduciary duty.  And I think he quite rightly points out that, you know, the Courts historically and recently have been very hard on people who breach fiduciary duty.

 Julia Evans:  Yeah.  I do though still think that we need some more work there rationalizing the basis of remedies for fiduciary duty.  And there is a very…well a critical divide in legal theory.  One suggests that law actually serves an end and that comes loud in clear in this paper from Professor Freedman, that is, the end of deterrents and enforcement and protection.  And some legal theorists are of the view that, no, law doesn’t serve an end, it’s imminently rational in and of itself.  And I guess depending on one’s particular point of view, research might reveal useful remedies.

 David Smith:    Absolutely. Well look, you know, really interesting topic, Julia, and I really appreciate you bringing that paper to my attention and to the attention of our listeners.  Unfortunately we’re out of time, and so that brings us to an end of this week’s discussion.  Thanks for listening and thanks for joining me today.

 Julia Evans:  It was a pleasure, David.  I look forward to podcasting with you again soon.

 David Smith:    And we look forward to hearing from our listeners.  You can send us an email at hull.lawyers@gmail.com .  Be sure to visit our blog at estatelaw@hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law.  We do hope that you enjoyed the show.  I’m Dave Smith.

 Julia Evans:  And I’m Julia Evans.  Until next week, so long.

 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.

 To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

 Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

Listen to: Assortment of topics

This week on Hull on Estates and Succession planning, Ian discusses an assortment of topics.

Topics include:

• The High Road by Terry Fallis
• 2010 Canadian (International) Conference Of Elder Law
•  The Articulate Advocate by Brian K. Johnson and Marsha Hunter
• The use of personal and life coaching to manage work and life balance

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull – Click here for more information on Ian Hull.

Assortment of Topics – Hull on Estate and Succession Planning #216

Posted on November 17, 2010 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag.  The podcast you’re listening to will provide information and insights into estate planning in Canada.  From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Ian Hull: Hi and welcome to Hull on Estates and Succession Planning.  Well welcome back to our semi regular podcasts.  We’ve missed a couple of sessions because of life’s running around, but we’re back, I’m back any way on a solo basis.  Suzana is still involved in a lengthy trial.

So what I wanted to talk about was what I what call a potpourri of issues and recap a little bit about what’s been going on recently.  One of the most exciting things that’s going on is that our great friend and fellow podcaster and blogger Terry Fallis has his book on Canada Reads, the CBC Canada Reads competition and is in the top ten of the Canada Reads competition for the CBC and that his new book “The High Road” which is a great book and it’s on… actually it’s available on the web.  It’s available on Amazon and all of those other sources.  But we’re really excited for Terry.  The book is a tremendous follow-up from his first book, and it’s called “The High Road” by Terry Fallis.  So we’re excited about that.

The second thing is I’ve just come back last week from … too far back.  I went to speak with Kim Whaley of  Whaley Estate Litigation at the World Conference or the World Study Group for the Canadian Conference on Elder Law.  And it was a fascinating seminar session three day conference, was at the first day, the Thursday, and enjoyed speaking at that conference about recent developments in Power of Attorney litigation.  The conference was on for three days.  I went to the famous “Red Shoe Dinner” or not dinner, reception that Laura Watts, the organizer, who did a phenomenal job.  The organizer of the conference, Laura Watts put on the first opening reception and then we had a great time at the final closing dinner with some excellent speakers. 

But the conference itself was, as I say, it was fantastic in many levels.  One of the speakers that we were treated to was Professor Doug Surtees and Doug Surtees is … and I’ll spell that S-u-r-t-e-e-s in case I’m mispronouncing his name, but he was with the College of Law at University of Saskatchewan.  And he gave us some really empirical data reference points as to what is going on in the growing area of elder law and the growing needs that are coming out of it. 

One of the sources of the data is a study that he’s been in charge of and effectively been pulling together in terms of his research.  But I did my own research just to see what the current state of affairs with the transfer of wealth and how we’re dealing with our aging population is.  Just some interesting stats we’re about… there’s an article called  “Inheriting Money is Stressful, but These Steps can Help” and it came in the Investor…Globe Investor, Tuesday, October 5^th 2010 in the Toronto Globe and Mail.  And it was an article about how families and how investors should deal with inheriting wealth and what they should or shouldn’t do when the wealth comes in.  The author speaks about the recommendations that the experts are talking about, is easy things like, obviously pay off all your debts.  Any debts you‘ve got, use your inherited wealth to get rid of your debt load and then move on to the investment step.  The article itself was, you know, I guess helpful and a bit anecdotal.  But some of the statistics in this article were very interesting.  The Globe article estimates that the estimated value of Canadian inheritances in 2010 will be about 70 billion dollars.  So he says over the five year period, ten year period we’re at about 550 billion dollars over the last ten year period with regard to inherited wealth.  And where we’re going the projection is about 4.3 trillion dollars will be held by asset managers by 2014 with the number of Canadian baby boomers born between 1946 – 1964 right now at about 9.4 million dollars…I’m sorry, 9.4 million people. 

So you can see with our aging population, we’re going to have about 1/5^th of Canadians by 2021 that are going to be over the age of 65.  And what has that done?  Well that has spawned obviously all sorts of efforts in the financial community to assess and address the new aging population. But this world study group program was phenomenal.  And, as I say, we spoke, myself and Kim Whaley co-presented … financial abuse and neglect in the Power of Attorney and we talked about some of the recent case law developments.  And there were really tremendous seminars.  There was another seminar in the afternoon of the first day.  It was called “Moving towards an International Lens of Elder Rights Issues.  And Dr. Jane Barrett, the Secretary General of the International Federation of Aging and Laura Watts talked about where we are going and what kind of projections that they had in their mind in terms of elder law and elder issues themselves.  So from that standpoint, any way, we we’re very lucky to hear some of the great speakers and again Laura Watts puts on a tremendous annual conference.   I’m told that this year it was in Toronto.  I’m told that next year it’s going to be back in Vancouver.

In any event, the last…. and keeping on with my potpourri, I want to talk about as well today is the book, an interesting book that was brought to my attention and it’s called “The Articulate Advocate”.  And for those of us who podcast and present and watch and read about these issues all the time and that is, how do we better perform in that sense or how do we better present better word for it.  Brian Johnson and Marsha Hunters’ book called “The Articulate Advocate” was a book that was recommended to me and I’ve taken a look through it and read through most of the book by now actually. But it is…what was really interesting was the way that they talk about how to present and the sort of techniques to consider.  The part one aspect of the book was fascinating to me and it wasn’t about just articulating and trying to engage your audience the whole first part. . third of the book talks about the body and how we are to control our body.  And we all have in our swaying or our hand movements and so on and there’s a whole section on understanding adrenalin and how our body reacts to adrenalin and how we can deal with it in presentations. 

So any way I thought that was a really interesting book and one that I highly recommend in terms of where and when we are presenting our…whatever pitch we’re making, whether it’s on a podcast or it’s in the context of our own day-to-day business of presenting our pitches at the office or in schools and so forth.  So I highly recommend that, “The Articulate Advocate”.

Coming back then to some of the other...dealing with my potpourri issues coming back to that is we…I was lucky enough to do some personal coaching and some coaching within our firm and why I say that is that Joanna Mackie of Rhythms of Change is the company that’s been helping us with that personal life coaching to our firm and our team.  And it’s all about how to manage both your life and work balance and some of the coaching you can take from that in a business environment.  And one of the interesting things that came out of that is we’ve all learned to manage and develop better feedback models within our own firms and so on.  But it’s also being picked up on the main stream and again in the report on business …the actual section, the Report on Business in the Globe and Mail on October 13, 2010 had a really interesting article talking about the use of mentors and life coaches when hiring and firing and when managing your firm.  So again, I just sort of…that was something that we’ve been really focusing on in our firm.  We’re always trying to, sort of, innovate and decide what aspects of our firm we can enhance and to make stronger and one of them is using life coaches.  And professional coaching is well talked about in lots of sources but just an interesting article came out in the recent Globe and Mail article on Wednesday, October 13, 2010.

Any way that wraps up my potpourri of discussion points and I really appreciate you joining us today and we’ll look forward to hopefully our next podcast with Suzana as well.  Thanks very much.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag.  The podcast that you have been listening

to has been provided as an information service.  It is a summary of current

issues in estates and estate planning.  It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

Listen to: Transitions

This week on Hull on Estates and Succession Planning Ian and Suzana discuss transitions, both personal and professional. They examine transitions currently taking place; how they affect us and different approaches one can take.
 

Ian M. Hull – Click here for more information on Ian Hull.
 

Suzana Popovic- Montag - Click here for more information on Suzana Popovic- Montag.

Transitions – Hull on Estate and Succession Planning #215

Posted on November 3, 2010 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag.  The podcast you’re listening to will provide information and insights into estate planning in Canada.  From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Suzana Popovic-Montag:  Hi and welcome to Hull on Estate and Succession planning.  You’re listening to episode 215 of our podcast.

Ian Hull:  Hi Suzana.

Suzana Popovic-Montag:  Hi there Ian. How are you?

Ian Hull:  I’m great thanks and yourself?

Suzana Popovic-Montag:  I’m good thank you.

Ian Hull:  Well that’s great.  Well today we want to talk about transitions and cultures.  And we see it a lot with families as we all know sort of as our families grow and my family moved from sort of toddlers into teenagers and they’ll move on to the next stage of life.  We all as parents have to adapt and we have to adapt our estate plan in that way.  And we also, of course, have seen transitions in business.  We see transitions in politics.  So we’re going to talk a little bit of that and talk a little bit about how the Courts have been dealing with a couple of interesting recent approaches to transitions.  So the first thing we’ve got to do is talk about the new mayor.  We have a new mayor in Toronto.

Suzana Popovic-Montag:  Yes we do.

Ian Hull:  It’s great.  And he is… it’s exciting times whether we like him or not it’s new blood down in City Hall.  So we’re anxious to see what he’s going to do and see where our city goes.

Suzana Popovic-Montag:  Well they say change is good so it’s good that we’ve had the opportunity to see it live before our faces.  And so much change is going on in our daily lives and in the hustle and bustle of life in general.  So it’s good to sometimes take those moments to actually think about, you know, what that change is going to mean.  And you mentioned at the outset, you know, in terms of our estate plan and in terms of our…just life in general.  So…

Ian Hull:  And it’s so true because we talk about…we can talk about transitions in big steps and then we can talk about short term transitions and short term changes.  And of course a mayor changing in the City is a flash point and an automatic change.  And in fact today we’ve heard in the news that the transition team is moving in.  So there is a team for a transition.  But in life we don’t have those kinds of luxuries but it does help us sort of remind ourselves anyway to maybe we should be rethinking about our estate plan and rethinking about how we can do that.  And in doing that we have been really having some interesting times here in our firm even because we have been trying to, in our own way, work a family meeting.  And we look at the necessity of running a feedback model within a business as a vital component to our day-to-day operations.  Like, we would always have, what we have always said with our family meetings.  We have looked for those as being a formal opportunity to give feedback.

Suzana Popovic-Montag:  That’s right.

Ian Hull:  And give feedback to the heads of the family.

Suzana Popovic-Montag:  Yeah, all as part of the dialogue in getting…encouraging people to talk about things that they wouldn’t traditionally have otherwise talked about.

Ian Hull:  And even and then a …feedback…everybody that works in the business community is focused on making sure that their team understands and there’s transparencies and there’s expectations that are managed and not managed, but a silent office doesn’t make any sense.  But yet we go home and we have a silent home.  And it’s unusual that our natural instincts are in the business community to really focus on communication.  And what we’ve tried as well in the office here which is sort of an interesting tool, it’s a business tool, but one that I think helps demonstrate the importance of the need for meaningful communication in a formal way as we have been just using a new program that’s called “Rypple” and it’s R- y- p- p- l- e, it’s rypple.ca.  And it’s a feedback model.  And it’s a feedback model that makes us document specifically the feedback within the members of our team.

Suzana Popovic-Montag:  And it’s one of those great pieces of technology that we’ve introduced into the system because, you know, we are certainly in the midst of a bunch of change internally as well with our document management system, our very stringent attempts to go paperless.  And so having this opportunity to do an on-line feedback conversation with individuals is part and parcel of that whole project.

Ian Hull:  And it comes back to our estate planning.  I mean why aren’t we having, we can’t help but ask ourselves, why aren’t we having these kinds of documented and meaningful and pointed moments in time of feedback between ourselves and our family.

Suzana Popovic-Montag:  It is really funny you say that Ian because you are so right. The business world is made up of those kinds of conversations, those kinds of exchanges, and yet when we come to our families, it’s a very different environment.  So we see a lot more of this kind of professionalism being injected into the process.

Ian Hull:  And what if we could do is professionalize it and regularize it, both in the estate planning dialogues that we’re going to have and in the business dialogues that we have.  It seems to pay off and we know it pays off in the business environment.  We’ve seen results in the business environment.  The experts say it does.  So why isn’t it paying off in the family environment?  Well I think it’s partially because we are not trying hard enough.

Suzana Popovic-Montag:  That’s right.

Ian Hull:  Another neat thing that we’ve been working around here as well, as you said, the paperless model.  And we’re stepping away from, for a lot of good reasons, but we are stepping away from moving paper all day long.  And that doesn’t necessarily transition well or, you know, tie well into estate planning because we still need paper for some of the estate planning process like a Will.  But what it does is again, it illustrates how we’re trying to take a team work approach to a problem that we all have the same goal, and that is, transfer of family wealth where we want to transfer paper within our office environment.  And the feedback model that we were talking about the rypple.ca program we’re using and other methodologies we’re using has really helped us.  And as I say, I think it can transition really well and easily into the real world of family.

Suzana Popovic-Montag:  And just to sort of circle, come full circle in terms of our firm’s experience, we also have our document management, or pardon me, our knowledge management system.  And we talk about sharing feedback, sharing you know information.  Here’s the perfect way of taking, you know, the hard copy of knowledge and sharing it with others within our firm so that we can complete that entire circle of that exchange.

Ian Hull:  And it’s so true when you look at the estate plan and when someone gets into a situation where, you know, they don’t even want to show their family the Will.  Or they don’t want to show their family the corporate structure of the family.  Or they don’t want to show their family the shareholders’ agreement that their kids, or minor kids, are involved in or whoever.  It’s about transparency and you know putting those documents on a safe cloud, you know and having access to the internet is one methodology that we found clients will do.  And we try to download the information exchange, have it available to the family to look at, as of when they feel they want to look at it.  So you have it accessed in a private way through the internet.  And again, I mean it’s just about, you know, the feeling that at least it’s there, it’s there for me to read or understand.  If I want to I can choose to hire professionals to help me understand it.  But if we can download that information, make it available, it again, in a paperless way, can help tie the bonds together and make sure that people get rid of some of these basically superstitious feelings about suspicious behavior on the part of any of the family members.

Suzana Popovic-Montag:  And it does still bolster that whole team work environment or that feeling within the family that, you know, those documents, that information, that dialogue can be exchanged with everyone who wants to participate in the process. 

Ian Hull:  So we have taken a little bit of a world of business and tried to import it into a world of family and estate planning.  And we’ve learned some good lessons in the business community, business environment that we can, we think, translate well in our efforts to effectively and properly estate plan.  So thank you very much Suzana.

Suzana Popovic-Montag:  Thanks to you too Ian and I look forward to our next podcast.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag.  The podcast that you have been listening

to has been provided as an information service.  It is a summary of current

issues in estates and estate planning.  It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

This week on Hull on Estates, David Smith and Julia Evans discuss avoiding negligence claims in a Wills file, an issue that is top of mind for lawyers who draft Wills. Specifically, they chat about the landscape in this area and some things that may create problems.

If you have any comments, send us an email at hull.laywers@gmail.com or leave a comment on our blog.

David M. Smith - Click here for more information on David Smith.

Julia Evans - Click here for more information on Julia Evans.

Avoiding Negligence Claims in a Wills File - Hull on Estates- Episode #227

Posted on October 28, 2010 by Hull & Hull LLP

David Smith:   Hello and welcome to Hull on Estates.  You are listening to episode #227 on Tuesday, October 26, 2010.

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.

Julia Evans:    Hi and welcome to another episode of Hull on Estates.  I’m Julia Evans.

David Smith:    And I’m David Smith.

Julia Evans:    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.

David Smith:    Good afternoon Julia.

Julia Evans:    Good afternoon David.

David Smith:    So Julia today we thought we would podcast about this whole issue which is top of  mind to lawyers who draft Wills and that’s the whole idea about avoiding negligence claims in a Wills file.  And what we thought we’d talk about is the sort of  landscape in this area and give some consideration to the kinds of things that can go wrong.  Certainly it seems that in my estimation and what we are told by LawPro is that the scope of liability of Wills lawyers seems to be increasing.  Do you have some idea of why that is?

Julia Evans:    Yes I do.  I think that we have an increased complexity in the law and in the human lives that it governs.  People own property all around the world, in all different kinds of ways and their familial relationships are quite varied and so we can have some complexity there that we have to grapple with.

David Smith:    Right and I guess the standard of care for a lawyer keeps getting higher really, given this complexity.  I guess also too, just from my experience, I would assume that the increased efforts of people to jointly hold assets and come up with those kinds of estate plans can also create problems as well.

Julia Evans:    Yes, I think it’s incumbent on the solicitor drawing the will to identify those issues and unpack them for clients so that they understand better what they’re up to.

David Smith:    Right.  Now when we talked about planning for this podcast you sort of thought that it would be helpful to discuss the Will file in stages.  And so the first stage we talked about was the initial meeting with the client.  And so if you’re a solicitor acting on behalf of a client who’s wanting to prepare an estate plan, we are very big on checklists, aren’t we?  And what are some of the things we want to have on our checklist?

Julia Evans:    Well the checklist, I think, even before we get to its content is to understand when I certainly have found it useful, and that is, in the course of one’s practice you get very familiar with the questions that you are asking day-to-day.  When it’s absolutely critical, in my experience, to have a checklist is when you are in a foreign environment or circumstance.  So suddenly the norms have shifted.  You’re in the hospital or you’re in a nursing home or the individual is very sick in front of you, or even if you are doing a Will for a friend.  It’s those times when the checklist keeps you focused.

David Smith:    Right, and certainly some of the things you think about with the checklist are the kinds of things, I take it, that start with things as basic as due execution of the Will, right? Making sure you’ve got two witnesses present and making sure that the person who is making the Will knows and understands the nature of their assets and has their requisite testamentary capacity.  And, of course, as estate litigators we always think of Banks and Goodfellow in that regard.  What other things come to mind at the initial meeting?

Julia Evans:    I think in addition to thinking about the very Will itself and the assets, it’s important to be alert to other things that are outside the document itself, like the possible presence of undue influence and to be brave to ask the tough questions of your client.  How did you get here? Who did you come with?  And why are you on your fourth lawyer?  But the very most important thing I find at the initial meeting is to provide copious notes and actually as close in time as possible after your initial meeting, to sit down and dictate a very detailed memo.  My thinking there is because when it counts, the key witness is dead and we don’t know today what factors will be critical in a determination down the road.

David Smith:    Right and we know that those notes can often be critical when you get into a Will challenge situation.  I would also assume that at the initial meeting certainly something I’ve seen on occasion is when there is not enough consideration given to compiling a really comprehensive list of what the person owns in terms in terms of not just assets, but jointly held assets, insurance products, art work, RRSPs.  All that kind of stuff.

Julia Evans:    Yes and I think it’s important also to remember that the Will is not the only testamentary instrument and the only testamentary event happening and I always explain that with our clients that one must think of the Will as part of the whole.  And its risky to dabble with just one element, so that one must consider the things that are designated, things that pass by property law and contract law.

David Smith:    Right, so those are the kind of things you talk about at the initial meeting.  I think it’s very useful to sort of think in terms of risk avoidance when you talk about compiling the assets, satisfying yourself that the Will will survive scrutiny.  And in fact, is a Will that is one that the testator wants to make.  The next stage that we’ve talked about in preparing for this podcast is drafting and file building.  What do you mean by that?

Julia Evans:    Well file building is making sure that you have all the documents that you might think are relevant.  So you’ve called in all the contracts, the corporate documents, title, promissory notes and so on and especially previous Wills or things that might be construed as Wills and look for patterns in frequency of changes, multi-lawyering and things like that.  And take the time to prepare a sheet that lists the various issues that are on your mind as you are going through the drafting process.

David Smith:    I guess some of these concerns are of…or some of these issues are more of a concern when you are dealing with elderly clients, is that kind of a fair statement to make?

Julia Evans:    I think elderly clients bring their own special circumstances.  Different people have different issues you must be sensitive to.  We have capacity issues in the young as well, if they’re on medication or suffer other problems.  So I think an open mind is really key.

David Smith:    And in your practice typically, Julia, is it something where you look for…you look for all copies of prior Wills that a client’s made?  Or do you just ask for the existing Will that they have at the time when they come in to meet with you?

Julia Evans:    I try to get as many as I can for two reasons.  To review it for changes and so on, but also to keep all the Wills in one place so that there isn’t as much confusion on death.  They may not know that there was a subsequent Will. 

David Smith:  And I guess another factor there is to sort of clearly spell out whether you’ve addressed issues that appear in your list of assets.  And certain assets, I suppose, might appear in prior Wills that can flag you to make sure you include them in the Will that you’re drafting.

Julia Evans:    Yes or certainly ask what happened to them.

David Smith:    Right.  What about client approval and execution? What’s a good practice point with respect to execution of a Will?

Julia Evans:    The number one thing I think, or one of the number one things is never send it out to the client to be executed somewhere else, then you’ve lost control of the process and you are not really sure whether you’ve really confirmed that the client understands what they’re doing, what they’re signing.  It also is a great opportunity to review that list of issues that you’ve  been compiling during the drafting process and confirm that you’ve raised or at least answered as many as you can there.

David Smith:    Fair enough.  And certainly it would seem to me that one of the duties that you should assume if you’re drafting a Will for someone, execution shouldn’t be seen as a separate part of the piece.  It’s really a seamless part of the whole, isn’t it, in the sense that you draft, you take the instructions, you draft the Will, you get the instructions.  But the actual execution of the Will is such a critical part of the whole piece because due execution is…I’ve always taken the view that it’s deceptively simple.  It sounds easy enough to sign a Will in the presence of two witnesses, but you know there’s been more than one occasion where I’ve seen Wills that have not been duly executed, even when they’ve been drawn in lawyers’ offices.  And I think it’s sometimes a process that perhaps we can be too casual about on occasion.

Julia Evans:    I think so, and indeed one good practice tip I found was to always do it in the same order.  Always, especially if you have a couple, you have it…you know, it’s always the woman first, for example, and then who is the first witness and who is the second every single time.  And my thinking there is that if you’re ever asked later on how did the execution go, you can say well it’s always the same order because I’ve always done it so.  And furthermore the same with the review.  It’s always in the same order.  You go over the Will the very same way for every single client and including their issue sheet which would, of course, be in their file.

David Smith:    Well that’s…you know, that’s a really good point if someone can say, because I mean, if you assume the worst case scenario where a lawyer is examining you because there’s a challenge made to a Will and the issue of due execution comes up, it’s certainly easy to say yes I can rely on my notes and by the way, this is how I always do it.  So I think that’s a good bit of advice.  Lets in the limited time we have left talk about reporting.  What are you responsible for?

Julia Evans:    I think that’s discussed all along from the very beginning when you first meet with your client right through to the execution phase.  And in the reporting letter, you set out any of the issues that have arisen and what you’re suggesting to do about it and restrict your responsibility to areas where you’re not comfortable, you’re out of your practice area.  For example, if you’re not qualified or comfortable giving international tax advice and you’ve advised the client to go and obtain that, then you’d be sure to put that in your reporting letter.  The other element I think in the report that’s important is to remind the client of the dynamic nature of a Will and that set out some of the triggering events that might get them to come back and at least reconsider or review their Will with you.

David Smith:    Right.  So of course we’ve only touched on some good practices in the limited time that we’ve got, but it’s been very useful discussing this, Julia and I think it’s a good refresher for everyone who draws Wills and for all of our listeners to think about various issues to be considered when you’re meeting with a client and engaging in the estate planning process.  So thanks a lot to all of our listeners for listening and thanks for joining me today, Julia.

Julia Evans:    It was a pleasure, David.  I look forward to podcasting with you again soon.

David Smith:    And we look forward again to hearing from our listeners. You can send us an email at hull.lawyers@gmail.com.  Be sure to visit our blog at estatelaw@hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law.  We hope that you’ve enjoyed the show and again I’m David Smith.

Julia Evans:  And I’m Julia Evans.  Until next week, so long.

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.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

This week on Hull on Estates, Paul Trudelle and Nadia Harasymowycz discuss the recent quarterly Hull & Hull breakfast seminar. The topics discussed at the seminar include:

•  Family matters and their relation to estates, specifically separations and divorce.
•  The effect of handwritten changes on wills.
•  Suicide notes and the effect they may have on the distribution on an estate.

If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

Paul E. Trudelle – Click here for more information on Paul Trudelle.

Nadia M. Harasymowycz – Click here for more information on Nadia Harasymowycz.

Summary of the Hull & Hull Breakfast Seminar - Hull on Estates- Episode #226

Posted on October 21, 2010 by Hull & Hull LLP

Nadia Harasymowycz:   Hello and welcome to Hull on Estates.  You’re listening to episode 226 on Tuesday, October 19, 2010.

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.

Paul Trudelle:    Hi and welcome to another episode of Hull on Estates.  I’m Paul Trudelle.

Nadia Harasymowycz:   And I’m Nadia Harasymowycz.

Paul Trudelle:    How are you today, Nadia?

Nadia Harasymowycz:   I’m good, Paul.  How are you?

Paul Trudelle:    I’m great, thanks.  We thought we’d spend our time podcasting today talking a bit about the recent Hull & Hull Estates Breakfast Seminar that we put on quarterly.  I want to just speak about that because I was there and I spoke at it, so I thought that would be a good segway.  And I thought we’d spend a bit of time talking about some of the other speakers and the topics that they spoke on as well.

Nadia Harasymowycz:   And I hope all of you were able to join us, but for those of you who weren’t able to make it or to catch us on the webcast, David Smith spoke about family matters and their relation to estates, with particular focus on separations and divorce, which was a very interesting paper on how those two legal fields meet.

Paul Trudelle:    Right.  And a lot of issues arise, particularly where you see estates and the estate has to deal with or consider how to deal with the effect of prior Separation Agreements or prior marriage contracts.  And that’s always a hot topic.

Nadia Harasymowycz:   Absolutely.   The other speaker we had that was of interest was Sharon Davis.  And…

Paul Trudelle:    Her topic, Sharon’s topic was the effect of handwritten changes on Wills.  And we often see Wills that are brought in, they are prepared by a lawyer, they’re signed by the testator and two witnesses, but lo and behold, there’s a number of handwritten notes put on afterwards.  Either the testator trying to change the Will in some way, mark it up or just maybe just to point out different ways of dealing with things or thinking about how they want their estate dealt with.  And a big issue becomes whether those handwritten changes are testamentary in nature or whether they’re to be disregarded by the Court.  So Sharon prepared a paper that addressed those issues. 

The third topic was my talk on suicide and suicide notes and the effect that a suicide note may have on the distribution of an estate, whether a suicide note can be considered to be testamentary.  And on that point, there’s just…in doing the research I came across staggering statistics on the numbers, the sheer number of suicides around the world and in Canada.  It’s one of the leading causes of death amongst Canadians.  I think it’s the top 4.  And it’s something that we see and face on a daily basis as estates that are brought about prematurely.  And there’s often a note that’s left that raises issues with respect to whether that note is testamentary and whether it’s to be considered a Will or not.

Nadia Harasymowycz:   And I’m sure your topic will tie in interestingly with Sharon’s in terms of the holographic nature of the documents.

Paul Trudelle:    They did, yeah…it did and we both spoke about the requirements for a holograph Will.  Most…usually when we’re dealing with a suicide note, they’re still in handwriting.  And the legislation, the Succession Law Reform Act addresses the requirements for a valid handwritten or holographic Will.  It needs to be wholly in the handwriting of the testator and signed by him or her.

Nadia Harasymowycz:   I know that one of the things that I found most interesting about the suicide topic was the issue of capacity and the change of perspective through time as to whether or not somebody who has committed suicide could even have capacity.  I know you touched on it briefly in your paper and then a little bit more in your presentation but did you have any thoughts on how those two issues will continue to proceed through the estate field?

Paul Trudelle:    I think that the prevailing thought now is not one of moral blameworthy or culpability on the part of the suicide victim or the person who attempts suicide.  Historically that person used to be blamed or it was a shortcoming on their part and in fact attempted suicide was a criminal act until relatively recently, until 1972.  That…the blameworthiness has been moved away from and now it’s seen as not a fault of the person who attempts suicide but is seen as a mental health issue rather than a criminal act, and they’re not seen as being blameworthy; rather they’re seen as being a victim of circumstances and mental health issues.  That leads into a problem in estates law because if the person…if the suicide is seen as a result of mental health issues, the question becomes whether the person had mental health issues that would affect or touch upon the testamentary capacity to make a Will.

Nadia Harasymowycz:  I think it’s interesting to note and this is something that I hadn’t come across beforehand, but that the same prongs of the test for capacity would apply in a suicide case, almost as if the suicide were a death of natural causes.  I mean, it’s just one of the factors that you look at for capacity.

Paul Trudelle:    That’s right, yeah.  The case law is pretty clear that the suicide itself doesn’t mean the person had or lacked capacity.  The test in Banks and Goodfellow will be looked at and each of those prongs that you have referred to will be addressed to see whether the person did have knowledge of the assets of their estate, did know who would be the natural object of their bounty, did know whether they knew what the effect of or the nature of the document was and whether it was a Will or not – those types of tests.  You need to also be free from delusions under that test and that’s something that the Courts will look at.  The fact that there was a suicide doesn’t mean that there was necessarily a delusion that the person was suffering from.

Nadia Harasymowycz:   Which I think you touched on in at least two of the cases that I recall you discussing at the Breakfast Series, where individuals had been entirely cut out of the Will.  And the Court specifically looked at delusions as part of a claim that the holograph Will was not valid.  And they found that there was no delusion.

Paul Trudelle:    That’s right, yeah.  And the Court will look at, you know, what the testator was thinking at the time, what their circumstances were at the time.  In one case, the testator felt and was being isolated by her family and the Court felt that in those circumstances, there wasn’t a delusion present and she was capable of making a Will otherwise and that it was not unreasonable for her to cut out her family and leave part of her estate to someone else.  On the other hand, though, there’s also a decision that I refer to in my paper where the person clearly did have delusions.  It’s not any delusion that’s going to impact upon a person’s capacity. The delusion has to directly affect the disposition that’s made.  But in that case, the delusion was to the effect that the spouse was trying to poison him. The Court found that there was no evidence to support that belief and therefore felt that there was a delusion present that had an impact on the making of the Will and that’s why the wife was left out and the Will was ruled to be invalid because of lack of capacity.

Nadia Harasymowycz:   It seems like in the case of a suicide or a suicide note that is brought before the Estates Court, that it’s on a case-by-case basis, that there isn’t really any hard and fast rule that you can look at for determining whether a note left behind is going to be testamentary.

Paul Trudelle:    No, that’s exactly…you’re exactly right there.  The Court’s gonna look at every case individually.  The case law that I have referred to and that you can put into a fact when you’re dealing with this issue, a number of those cases say this is dealt with on a fact by…you know, a case-by-case basis.  And it’s the individual facts that are gonna be very relevant.

Nadia Harasymowycz:   Excellent.  Well I think that brings us to the end of our discussion.  If you’re looking for some information on either Paul’s suicide paper or the other papers that were brought up at the Breakfast Series, keep checking our website.  We’re gonna have them posted shortly and we look forward to hearing from you if you have any questions.

Paul Trudelle:    That’s great.  Yeah…I commend you to those papers and the papers by Sharon and David. They should be on our website shortly.  I think we also put up a video of our Breakfast Series in due course.

Nadia Harasymowycz:   Indeed we do.

Paul Trudelle:    And you can also check out our blog for a number of discussions on these and other topics.

Nadia Harasymowycz:   And if, after reviewing all that information, you have any questions, you can send us an email at hull.lawyers@gmail.com.  We hope that you enjoyed the show.  I’m Nadia Harasymowycz.

Paul Trudelle:    And I’m Paul Trudelle.  Thank you for listening.

Nadia Harasymowycz:   Until next week.

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.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

 Listen to: Managing Expectations

This week on Hull on Estates and Succession Planning, Ian and Suzana discuss managing the expectations of the surviving spouse.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull - Click here for more information on Ian Hull.

Suzana Popovic-Montag - Click here for more information on Suzana Popovic-Montag.

Managing Expectations – Hull on Estate and Succession Planning #214

Posted on October 13, 2010 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag.  The podcast you’re listening to will provide information and insights into estate planning in Canada.  From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Ian Hull:  Hi and welcome to Hull on Estates and Succession Planning.  You’re listening to episode #214.

Suzana Popovic-Montag:  Hi there, Ian.

Ian Hull:  Hi Suzana.

Suzana Popovic-Montag:  How are you today?

Ian Hull:  I’m well.  And yourself?

Suzana Popovic-Montag:  Good thank you.

Ian Hull:  Fantastic.  Well we have got a busy fall and we’ve been out and about doing some mediations and doing our case load and so on. And one of the things that we keep running into and bumping into is managing expectations of the surviving spouse.

Suzana Popovic-Montag:  That’s a good introduction to this podcast, Ian, because we are, as you say, seeing more and more of these kinds of situations where people recognize that there is a surviving spouse but would rather not have to deal with what comes about as a result of that.

Ian Hull:  Absolutely.  And so we look at this and first of all, spouse – the definition of spouse – is in Ontario and in most jurisdictions, is a broader definition than just simply a married spouse.  But the spouse or the person who is left standing in the relationship has significant claims. And we’ve talked about those claims.  Dependant relief claims, Succession Law Reform claims, that way and the Family Law Act claims.  But we wanted to talk a little about today is more about how do we deal with that reality?  And looking at it from the perspective as the family members, the survivor’s family members and looking at the perspective as being an executor.  Because it is really an important…we find…a very important part of the process is managing that spousal claim.  So first of all, let’s talk about who’s a spouse?  Go ahead.  Why don’t you talk about...when we’re looking at, when we think of spouses, what conventional wisdom, sort of, are we looking at there?

Suzana Popovic-Montag:  And as you say, Ian, our definition is a lot broader than it used to be. And we’re talking about married spouses in the traditional sense and we’re also talking about common law relationships that meet a defined period of time after which, you know, the Courts will recognize someone as a common law spouse here in Ontario.  And you may also be extending the claim to the individuals who are in same sex relationships who similarly have met the timelines for those kinds of relationships to be recognized at law.

Ian Hull:  Absolutely. So we’ve got this person who has left and they’re typically in a high emotional state when their spouse dies, whether it’s a husband, wife, same sex partner.  And they are then faced with sometimes urgent financial circumstances, whether or not they have access to the money and so on, if the other spouse was looking after the money.  And they’d go see a lawyer fairly quickly.  And at some times we find our clients who are on the other side of it, are the beneficiaries, the children of the deceased or the executors, they get a little huffy about the fact that the surviving spouse has gone to their lawyer so quickly.  But there are time limits that the surviving spouse is stuck with and there’s a good reason to go see someone quickly…I mean, go see a lawyer quickly.

Suzana Popovic-Montag:  That’s right.  And that’s even if you have a Will that specifically provides for that spouse as well, because they want to make sure that they’re protecting themselves right from the get go.  And so when we talk about timelines, we know certainly here in Ontario that it’s a six month limitation period from the date of death within which to bring a claim for equalization under our Family Law Act.  And then there’s also a six month limitation from the date that you obtain probate or a Certificate of Appointment of Estate Trustee with or without a Will here again in Ontario, for which time you can bring a dependant’s relief application under our Succession Law Reform Act.

Ian Hull:  So generally speaking, you’re looking at months.  And that can turn into literally days.  And most of us who have organized estate plans still have contingent liabilities out there.  For example, tax liability or maybe you’re involved in a business operation and you’ve got an outstanding piece of litigation or something. So to crystallize what is really available for that surviving spouse can take and often takes more than six months from the date of death.

Suzana Popovic-Montag:  And factor into that a grieving period.  I mean, you are really going to be talking about days at the end of it when it comes right down to that number crunching and when it gets done, and when reasonable or rational decisions can actually be made.

Ian Hull:  And that’s so true.  You know, the emotional side of it…you forget that sometimes.  As a lawyer, you sort of think clinically we’ll get on with it.  But it may be that say, money isn’t a pressing issue right away.  That surviving spouse needs some time before he or she is ready to go sit down with a lawyer and to get and take in advice as to what his or her options are.

Suzana Popovic-Montag:  That’s for sure.

Ian Hull:  So talking about the management side of it then.  Again, that’s really what we wanted to touch on because we are struck on the litigation side by the high emotions on both sides.  And not to oversimplify but as I say, I mean it’s typically the surviving spouse is devastated by the loss of a lifetime partner, or even a short-term partner or a long-term, medium, whatever term partner. And the family are typically devastated by that loss but are typically devastated and react badly to the gold-digging, surviving spouse.

Suzana Popovic-Montag:  And just to give a little bit of context to that, I think Ian when you called it gold-digging, surviving spouse we’re really looking at a situation where there’s step family members involved.  And so it’s a lot easier for a child to be adversarial against a step-parent than their own parent.  I’ve even seen situations where even that has come into it as well.

Ian Hull:  And sometimes the lawyers, through no fault of their own, just in the process of protecting the surviving spouse aggravate the situation. And a letter that says I want to see all of her assets and I want to see any joint accounts and I want to see any insurance policies is perceived by the family or by the lawyer whose acting for the family as aggressive steps as well.  And again, if they can sit back and just look at…and as I say manage what the expectations of that person are versus your expectations in the context of the law, we have to accept the fact that there’s been a general trend towards equalizing or more fairness for the surviving spouse. So those kinds of questions are almost always legitimate.

Suzana Popovic-Montag:  But they’re not very well received…

Ian Hull:  Never.

Suzana Popovic-Montag:  …because so many people would be focused on the intention.  The deceased intended for you to get so much and you should be happy with that, and you should want to uphold that testamentary intention and leave things alone.  But when you take the law and you intersperse that into the intention and people’s rights outside of the terms, the four corners of a Will, it becomes a very different situation.  And I think that’s where we see the most tension that arises.

Ian Hull:  You’re absolutely right.  I think the intention, expectations on both sides are the driving force in a lot of these lawsuits because as you say, you’ve got black and white that says this is what Dad intended and this is what the surviving spouse got, so they should live with it.  And when the surviving spouse is not given anything, that surviving spouse is angry typically at the deceased…

Suzana Popovic-Montag:  That’s right.

Ian Hull:  …who hasn’t got organized.  And when you sit back at it and the Courts will, you know, analyze it as they see fit. But a lot of the times the Courts are sort of a little bit grumpy with these testators or these deceaseds who are not closing that loop.  They can have this wonderful relationship and if it’s an end of life relationship or a long-term whatever, but they don’t close the loop with…and especially with a non-married spouse.  And in Ontario and most jurisdictions you are still treated differently and preferred in some respects if you entered into a marriage relationship as opposed to a common-law relationship. That’s just a cultural diversity there that exists and the law supports married relationships in many respects more than non-married and that’s just the fact of the way the laws have evolved over time.  So anyway, we’ve been really struggling with these and we’ll continue to.  And what we try and encourage our clients is to get in that situation where a judge isn’t gonna be critical of you not organizing your affairs, and not explaining your affairs to all parts of the puzzle before death.

Suzana Popovic-Montag:  That’s right.  And you know, we also see a lot of tension… and you eluded to this at the very beginning with the executors as well…because they’ve got now the four corners of a Will and they’ve sort of got their marching orders and the directions in terms of how to distribute this estate.  And then suddenly when they’re faced with these extremes they may or may not have expected, it does throw, you know, a curve ball into the whole system.

Ian Hull:  Absolutely.  So we can…all we can do is tell our clients until we’re blue in the face - get this organized as best they can so that we don’t have to face these inevitable tensions without some parameters of realistic wealth being transferred to the surviving spouse and realistic wealth being transferred to the surviving family.

Suzana Popovic-Montag:  That’s for sure.

Ian Hull:  Alright.  Well thank you very much, Suzana.  It was great to see you again today.  And we look forward to our next podcast.

Suzana Popovic-Montag:  Thanks very much.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag.  The podcast that you have been listening

to has been provided as an information service.  It is a summary of current

issues in estates and estate planning.  It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

Listen to: Trust Law, Foreign Trust and Trustee Cases

Today on Hull on Estates, Kathryn Pilkington and Craig Vander Zee discuss recent cases dealing with trust law. They also discuss the Trust, Trustees and Trusteeships conference on October 1, 2010 put on by the Ontario Bar Association.

Specifically, they discuss the topics that were presented at the conference. These topics are:

• The Drafting of Trusts
  Hilary E. Laidlaw, McCarthy Tétrault LLP (author of paper)
  M. Elena Hoffstein, Fasken Martineau DuMoulin LLP (presented by)
• Considerations When Drafting Restricted Charitable Purpose Trusts
  Terrance S. Carter, Carters Professional Corporation - Orangeville
• Remedies for Breach of Trust
  Archie J. Rabinowitz, Fraser Milner Casgrain LLP
• Drafting Trusts in Contemplation and Consideration of New Reproductive Technology
  Clare E. Burns, WeirFoulds LLP
• Trusts and Insolvency
  Frank Bennett, LSM, Bennett & Company
• Review and Analysis of Recent Trust Case Law
  Craig R. Vander Zee, Hull & Hull LLP

If you have any comments, send us an email at hull.lawyers@gmail.com or leave a comment on our blog.

Craig R. Vander Zee – Click here for more information on Craig Vander Zee.

Kathryn Pilkington - Click here for more information on Kathryn Pilkington.

Trust Law, Foreign Trust and Trustee Cases - Hull on Estates- Episode #225

Posted on October 12, 2010 by Hull & Hull LLP

Kathryn Pilkington:   Hello and welcome to Hull on Estates. You’re listening to episode #225 on Tuesday, October 12, 2010.

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.

Kathryn Pilkington:   I’m Kathryn Pilkington.

Craig Vander Zee: And I’m Craig Vander Zee.

Kathryn Pilkington:   And 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. 

Craig Vander Zee: Good morning again.

Kathryn Pilkington:   Good morning.

Craig Vander Zee: How are…

Kathryn Pilkington:   How was your Thanksgiving weekend?

Craig Vander Zee: My Thanksgiving was very good. And yours?

Kathryn Pilkington:   Mine was fabulous, thank you. I was in Niagara.

Craig Vander Zee: And I was up at a friend’s cottage with the kids so that was…it was a really nice weekend actually.

Kathryn Pilkington:   Oh that’s good, I’m glad.

Craig Vander Zee: Well now that we got the turkey and the Thanksgiving out of the way, we thought that we would talk about a couple of cases today dealing with recent cases in dealing with trust law. But also mention beforehand that there was an interesting conference that was put on through the Ontario Bar Association entitled “Trust, Trustees and Trusteeships” and it was held on October 1, 2010 at the OBA. And I was fortunate enough to be one of the speakers and so I had the opportunity to review the papers that were done and listen to the speakers. And I thought it was an extremely well presented conference. And so I thought it would be of benefit just to list the topics and the speakers so if anyone is interested, they can follow-up in respect of materials.

Kathryn Pilkington: Absolutely. That’s a great idea.  

Craig Vander Zee: So one of the topics was Drafting of Trusts. And Hilary Laidlaw prepared the paper and Elena Hoffstein presented it. There was another one called Considerations When Drafting Restricted Charitable Purpose Trusts and Terrance Carter delivered that. Remedies for Breach of Trust was delivered on Archie Rabinowitz. Drafting Trusts in Contemplation and Consideration of New Reproductive Technology which is quite a mouthful, but Clare Burns did a wonderful job presenting that.

Kathryn Pilkington:   And Paul Trudelle and I actually just podcasted on a topic related to Clare’s discussion at the Trusts, Trustees and Trusteeship seminar that you went to.

Craig Vander Zee: Well and its…she presents quite wonderfully and with a bit of wit there. And it’s really quite an interesting area where there are lots of issues that have been identified but lots of solutions have yet to be, I guess, pursued with respect to that area. So it was quite interesting. And Trusts and Insolvency was presented by Frank Bennett and then I dealt with Review and Analysis of Recent Trust Law.

Kathryn Pilkington:   And I know that your topic was very, very interesting.

Craig Vander Zee: Well you may be the only one who thought that. But in any event…

Kathryn Pilkington:   And captivating, I’m sure.

Craig Vander Zee: So my paper covered 10 cases over the last 2 years. Many of them with the Ontario Court of Appeal dealing with trust law. And I thought today we might take a selection of those cases, again just to summarize because they may be of interest. And on that point then, my paper actually dealt with cases dealing with foreign trusts and trustees, removal of estate trustees, constructive trusts and costs. But for the purposes of today, I thought we would just touch upon the foreign trusts and trustee cases. And two of the more noteworthy cases in the last couple of years are actually Tax Court decisions. And I’m not gonna get into the tax aspect of them except the proposition that arises really from the residency of a trust issue. And those are the Garron Family Trust and Queen decision and the Antle and Queen decision that have both come out. Now for two really good articles regarding these two topics or these two cases rather, you should go to the Deadbeat 2009 edition wherein Ed Esposto does quite an entertaining article entitled “Pyramids, the Wizard of Oz, Garron and Antle” and he discusses both of those cases. And then Suzana Popovic-Montag and Megan Connelly co-authored an article for STEP entitled “Canadian Tax Payers Beware – Foreign Trusts may no longer be the same”. 

So I would encourage those who are interested in these two cases to go take a look. Now I guess we should get into the two cases so people really know what they’re about. They were both cases, appeals to the Tax Court of Canada from assessments made under the Income Tax Act dealing with off-shore trusts. And both cases were again appealed and the appeals are expected to be heard in the fall. And I think the Antle case, that appeal may be even being heard this month. So we should be looking out for those.

In Garron a Canadian tax resident…sorry Canadian resident taxpayer…it was actually more than one taxpayer but for the purposes of our discussion here I think we can take it as one taxpayer, owned shares in a company and carried out a reorganization back in 1998. And it was similar in structure to an estate freeze. More particularly, two trusts with Canadian beneficiaries were settled by an individual who was a friend of the taxpayer. But the individual was a resident of the Caribbean island of St. Vincent. The sole trustee of each trust was a corporation resident in the Barbados. And so the clear residency according to the fact that the corporation was resident was in Barbados. And as part of the reorganization, these Barbados trusts subscribed to shares of a newly incorporated Canadian company which in turn subscribed for shares for the company. So essentially you have an organization that’s taking place, reorganization that’s taking place with the set up of two trusts. The company shares go into newly incorporated companies and those company shares go into the trust. And all of this was, of course, effected with nominal consideration. And then two years later the trust disposed of a majority of these shares that they had in the holding companies and the capital gains were apparently over $450,000,000. So this became on the radar of CRA. And because the trustees were resident or were thought to have been resident in the Barbados, there weren’t the same tax implications as if the residency of the trustees was in Canada. However, the Minister made an assessment and the taxes were deemed to be payable. And then that’s how the tax appeal began.

The key thing from this case, except for those that are truly interested in the tax consequences, is how the Court dealt with the issue of residency of the trustee. There is the well-known decision of Dill and Pearman, trustees of the Thibodeau Family Trust. That case has well been known to stand for the proposition that the residency of a trust is where the trustee is resident. And that is that a trust is resident in the jurisdiction where the trustee resides. However, the Court in Garron applied the test which is often used to determine the residence of a corporation. So the Court seemed to comment that Thibodeau didn’t stand as the precedent for determining the jurisdiction of a trust. And in doing so, and in applying the test for the residence of a corporation, the Court applied a central management and control test. And came up with the following considerations -  that although there are significant differences between the legal nature of a trust and a corporation, the functions of each being at a basic level, the management of property, are quite similar from the point of view of determining tax residence. That’s not my words, that’s you know really what we take away from the case. And that adopting a similar test for each of those considerations, residence of a corporation, residence of a trust, would promote consistency, predictability and fairness. And so this particular case then, some might argue, changed the nature of the test for determining the residency of a trust. And so I think there are many practitioners waiting with baited breath to determine how the appeal of this decision turns out. So we also look forward to that.

And then in the Antle case was different in many regards, in many significant regards. It was a case that dealt with the legality of what was termed a capital property step-up strategy whereby capital with an accumulated gain which was in this case shares in a company, was shifted from a husband to our Barbados spousal trust. So we’ve got the Barbados involved once again. And the trusts…what happened here, the trust sold the property to the beneficiary wife. So the Barbados spousal trust sold the property to the beneficiary wife in exchange for a promissory note. The wife then sold the property to a third party purchaser and used the proceeds to pay off the note and then the trust distributed the funds to the wife. There were a bunch of issues, and for those who are very interested, I would invite you to read the case. But the things that I wanted to talk about in this summary were dealing with the actual findings. And we know that in order to find a valid trust there needs to be certainty of intention to create a trust, certainty of subject matter to create a trust and certainty in the objects of the trust. And this particular case looked at the first two. And with respect to the certainty of intention, the Court found that there was a lack of intention to create the trust in that the timing of the delivery of asset and the signing of the trust documents and a review of the evidence indicated that there wasn’t an intention to create the trust. And then with respect to the subject matter, the Court found that there wasn’t any certainty of the subject matter and that the husband didn’t intend to and did not transfer the full interest in the shares. And so this is the appeal that we understand will be heard shortly.

So those are two things and another case dealing with foreign trustees is the recent case of Justice Brown called Herring Estate. And in this case, Justice Brown provides clear and helpful guidance as to the circumstances under which a foreign trustee can act as an ancillary estate trustee. In short, the deceased in this case was a US resident who had created an inter vivos trust in North Carolina naming a licensing trust company as the sole trustee.   The trust company was also the named executor of the deceased’s Will and the wife was the sole beneficiary of the trust. And the trust was the sole beneficiary of the residual estate. So probate was pursued and obtained in North Carolina with respect to the estate but there was one asset of the estate which was located in Ontario. And it was a new condo unit that had apparently been worth somewhere in the neighbourhood of $360,000 but which about $125,000 or so was owing on the occupancy date. And it hadn’t been occupied prior to the deceased passing away. So there was this much that was outstanding. And so the foreign trustee applied for an ancillary grant of estate trustee because it wanted to be able to deal with that asset. And I guess the probate application was handled over-the-counter and the local Estates Registrar denied it because of Section 175.2 of the Loan and Trust Corporations Act because the trust company was not an approved registered trust corporation under that section. And then it was before Justice Brown. And Justice Brown found that while Section 175 of that Act permitted it to grant probation to a trust corporation registered under that Act without having to post security for acting as an executor or estate trustee, it did not prohibit the appointment of an estate trustee under an ancillary application for a foreign trust company that was not registered under the Act. So that a foreign trust company, even though they’re not registered as a trust company in Ontario, could proceed to be appointed. But he said that the issue of security was still out there. If it had been a trust company registered under the Act in Ontario, of course we know that there wouldn’t have been the requirement for security. But because this wasn’t the case, he said well let’s take a look at that. The wife of the deceased consented to the appointment and as such, Justice Brown, it appears upon a review of the file, looked at the asset and found that there wasn’t significant or sufficient evidence with respect to the amount owing in Ontario and whether it would be paid or not by the trust company, to say that no bond or no security was required. So he in turn found that there needed to be security of $125,000.   So he allowed the probate to go through but there was security of $125,000, approximate that much, which coincidentally was the amount of the occupancy cost that had to be paid, or the amount to be paid when it was occupied. And I think with that case, we’ll stop there for this week. There are, you know, certainly more cases we can talk about, interesting recent case law. But I think for our time this week, that’s all we have.

Kathryn Pilkington:   Yes, and thank you very much. I know that the listeners will get something useful out of that. So it was a pleasure, Craig.

Craig Vander Zee: Always a pleasure for me too, Kathryn. And we look forward to hearing from our listeners. You can send us an email at hull.lawyers@gmail.com. Be sure to visit our blog at estatelaw.hullandhull.com where you’ll find even more information and discussion on today’s practice of estate law. We hope you’ve enjoyed the show. And again, I’m Craig Vander Zee.

Kathryn Pilkington:   And I’m Kathryn Pilkington.

Craig Vander Zee: Have a nice day.

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.

To listen to other podcasts, or to leave a question or comment, please visit our website at www.hullandhull.com.

Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network.

Listen to: Planning Estate Administration – Part #4

This week on Hull on Estates and Succession Planning Ian Hull continues the discussion on estate administration. Specifically, he examines liabilities and accounting obligations.
 

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Ian M. Hull – Click here for more information on Ian Hull.

Planning Estate Administration – Part 4 – Hull on Estate and Succession Planning #213

Posted on October 6, 2010 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag.  The podcast you’re listening to will provide information and insights into estate planning in Canada.  From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Ian Hull:  Hi and welcome to Hull on Estates and Succession Planning.  You’re listening to, and possibly watching, episode 213.

Welcome back.  I am doing another solo podcast without my compatriot, Suzana.  But we wanted to continue with our ongoing theme of estate administration issues that can rise, bubble up and create tension and possibly litigation or the like.  So we were talking about some of the things we’ve been doing.  I just had my first tour of my old alma mater, North Toronto Collegiate.  They tore it down, or they’re about to tear it down and they built a new school right beside it.  And I was touring it last night, enjoyed that.  It was a great thrill to be in the school.  But I had a chance to, as I talked about in my last podcast, I had a chance to chat with my son’s accounting teacher.  And we were talking about some of the basic accounting models and so on that they’re teaching a course at the high school level. And it really struck me as one of these things that it’s one of those life skills that carries on forever. And whether you’re balancing your own cheque book when you’re older and these are the sorts of issues that arise in the estate administration world. 

And before we get into the second part of the equation, and that is liabilities or issues that arise out of liabilities when you’re doing an estate administration, I’m gonna talk a little bit about some of the accounting obligations too.  Because when we sit down…and what we’re trying to do in this mini-series is talk a little bit about what is it…what’s it like to be an executor (a) and (b) where are the issues that can arise that may bring some criticism upon me as the executor or upon my clients.  And the one area that we see time and time again is not bringing in all the assets.  And we talked about that in my last podcast, that’s the credits.  The credits aren’t all brought in or they’re not all identified like the teacup illustration that we used.  Or you missed an account or so on.  The other part of it is, is that once we start to bring in, how are we tracking it?  Are we keeping vigilant, clear and unquestioned records, financial records?  And, of course, depending on when we see our clients, that question can change and that answer can change.  Because what we try to tell our clients is once you’ve been given the job…and one of the things, certainly in Ontario and throughout Canada is, is that you…once the person passes away, as executor named in the Will you have responsibility from that moment on.  Now that’s important obviously because that executor has control of the body and has to deal with those sorts of funeral issues.  But it also means right from the get go you’re required to produce and undertake comprehensive accounting. 

So when we go out and do our due diligence and we go and flip through every piece of paper that we think we need to look at to determine all the credits, we need to track that.  And we need to identify, once we get that bank account, we need to put that bank account into a separate estate account.  And once it’s in that account, identify the entry, the journal entry that we learned in high school accounting.  Make sure that journal entry is identified each time with the supporting document behind.  Now this is sort of 101 accounting but it is crucial that whenever an executor takes on that business role, that the accounting obligation is paramount because that is where your Achilles heel can come at the other end of the day when criticisms arise of your work.  And it’s not always gonna happen but it always diffuses it if you can put together even informal accounts for the beneficiaries from time to time.  We’ve talked about in the past on lots of these podcasts the need to keep the beneficiaries up-to-date and identify what’s going on in the estate administration.  And one of the easy ways to do it is, of course, just do an informal accounting.  You’re doing it anyway and produce it maybe once a month or every few months to the beneficiaries so they see where the money is coming and of course where it’s going.

So I’m not gonna focus too much on the estate accounting issues other than the harsh reality of if you don’t do it right from the get go, you will create tremendous stress on your own administration and ultimately you may well get criticized and you may well have to go to Court to defend your actions.

Alright, so that’s the three-part component.  We’ve got the assets, bringing them in.  We’ve got the accounting obligations throughout.  And the other part of it, concurrent with all this of course is what are the liabilities?  What is the debit side of estate accounting?  And it’s not just paying the Visa bill.  Not just paying the lease payments off or those sorts of things, obvious things on the date of death.  Someone dies, they’ve accumulated liabilities.  It’s also looking at in real detail what’s gonna happen in this estate?  And what I tell my clients often is I say look, start, sit down and make sure you’ve got enough credits and you’ve got not enough debts so that you’ve got a solvent estate.  Determine right from the outset if that is even going to be an issue.  I take a deep breath and I think easy question to ask – hard question to answer because lots of time you don’t have that information at the outset.  And lots of times unfortunately you find out that the estate is gonna be under water and it is not gonna be able to fulfill all of its obligations, both its current obligations like paying Visa and so on, and secondly, the obligations under the Will.

So I call that sort of the grey area administrations.  And, of course, we have to be very mindful of that.  And as executors I tell my clients we have to make sure that everybody understands that.  Again, just be transparent.  The case law actually insists that if you’re gonna be an executor to the extent…and we won’t get into all the detail…but basically the case law says make sure you’ve identified all your creditors as soon as possible that you are not solvent.  Or that you may have trouble paying all of the creditors’ bills.  And the same goes to the beneficiaries.  Say the estate has $100 and the bills are $80 and there’s only $20 left.  Well you’ve only got $20 to pay out whatever the Will has asked you to pay out.  So the sooner we tell the beneficiaries hey, here are the fixed credits, here are the liabilities fixed, and here’s what’s gonna be our profit so to speak at the end of the day, here’s our capital that’s gonna be left to be distributed in accordance with the Will.  I like to tell my clients to push that information out as soon as possible.  And certainly when you’re in a grey area administration, when you can see right from the outset that this is gonna be close, it’s so important to disclose and communicate that status.  Not just the detail but the reality that although they’re named in a Will, it’s a fantasy.  They’re not gonna get the kind of distributions they thought they would get under that Will because there simply isn’t enough money, after we pay off the debts.

So the liabilities identifying is crucial.  And so when we get an executor’s role, sometimes we get a little fixated on well, what’s the credits?  What’s out there?  What are the assets?  Well we need to be…I tell my clients we need to be just as vigilant to take out the debts and look at where we’re going with the debt side. And as I say, lots of estate administrations aren’t in the grey area.  We’re not always sort of bumping around zero or plus one in terms of the net assets.  But sometimes we’re surprised.  And we’ve been involved in this office many times with multi-million dollar estates that turn out to be below zero. And so we just try to assess that as we can, going along as early as we can.  So particulars of the liabilities again is something that is a paramount obligation of the executor and we need to…I tell my clients we need to pull that together as fast as we can.

So we’ve got the three part components here of the credits, the accounting obligations, the journal entry work that you’re gonna have to do and the debits.  That gives us a little bit of background in terms of…and maybe it’s an economic analysis…in terms of our business role as executors.  So thanks again.  We miss Suzana for this podcast again but we know she’ll be back soon.  And we appreciate always you watching and listening.  Thanks very much.

You have been listening to Hull on Estate and Succession Planning by Ian

Hull and Suzana Popovic-Montag.  The podcast that you have been listening

to has been provided as an information service.  It is a summary of current

issues in estates and estate planning.  It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com.