Listen to Insights on Aging and the Elderly Seminar
This week on Hull on Estate and Succession Planning, Ian talks about a seminar he attended and participated in last week called 'Insights on Aging and the Elderly'. The seminar was hosted by B'nai Brith and featured Dr. Nathan Herrmann, Ian Hull, Rabbi Roy D. Tanenbaum and Charles B. Wagner.
Continue Reading...Listen to "The Dog Days of Summer: Planning for the Transfer of the Family Cottage"
Justin and Megan discuss estate planning issues surrounding the family cottage. They cover specific practice tips of transferring the family cottage and the consequences of poor planning.
Listen to "Mutual Wills"
Read the transcribed version of "Mutual Wills"
During Hull on Estates Episode #61, Sean Graham and Paul Trudelle discuss mutual wills and mirror wills. They discuss examples where a mutual will and a binding agreement would be used, such as second marriages.
They also cover the importance of documentation of intent and discuss potential drawbacks of the mutual will.
For more information on this topic, see the article by Debra L. Stephens, "Mutual Wills: A Primer", which was presented at The Six Minute Estates Lawyer 2007, on April 10, 2007.
In the past, the typical inheritance was likely considerably less than $100,000. However, when asked, more than 50% of the children of baby boomers expect to receive $283,000 on average. This figure represents a significant increase from the past and is indicative of the wealth that baby boomers have accumulated over the years. Half the $283,000 will be received in cash and the rest in real estate and valuables.
However, to me it is also clear that baby boomers will live longer than past generations and likely spend at a greater rate than their parents ever did as they fight the ravages of old age. Ultimately, there may not be as much to pass along as their children would like to think. The baby boomers also have an altruistic streak and may leave some of their wealth to their favourite charity.
Regardless of who gets the money, the need for proper estate planning is clear. Now is the time for boomers to get their personal affairs in order if they haven’t already. Baby boomers should let their children know now what their wishes are in order to avoid family fights in the future when their estates are being distributed. If parents are afraid that their children will react angrily if treated differently, they should nevertheless let them know and the reason why. The emotional and financial costs to the next generation is far greater than the immediate upset if a parent tells a child that he or she is being treated differently under the terms of their Will or that a charity is slated to receive the bulk of their estate. Perhaps a family conference with an outside facilitator is the way to go. Unfortunately, no matter what the baby boomers do, estate litigation is likely to increase as their children fight over their inheritance or try and prove what the “true wishes” of their parents were.
Finally, the generation which benefits from this trillion dollar transfer will have to carefully decide what to do with the windfall. Many will pay off their mortgages or other debts affording them the opportunity to accumulate their own personal fortune and pass it on to the next generation. Estate planning will always be with us… the sooner it’s done the better.
Thanks for reading and enjoy the weekend.
Justin de Vries
READ THE TRANSCRIBED PODCAST HERE
During Hull on Estate and Succession Planning Podcast #35, we discussed:
Yesterday, I referred to the 9th Annual Estates and Trusts Summit, put on by the Law Society of Upper Canada.
Day Two of the Summit focused on estate planning issues. Topics covered included:
1. Estate planning under the new dividend regime;
2. Issues arising in the drafting and use of powers of attorney for property;
3. Retainer issues of confidentiality, conflicts and privilege;
4. Beneficiary designations;
5. Family Law issues and their impact on Estates practices;
6. Issues surrounding the family cottage;
7. Cross border estate planning issues;
8. Tax issues in shareholder agreements;
9. Variation of trusts;
10. Executor compensation and GST;
11. Mutual Wills;
12. S. 116 certificates;
13. Guardianship of children;
14. Investment obligations for attorneys and guardians; and
15. RRSPs and RESPs.
Again, papers were delivered on most of these topics. The materials constitute an excellent resource for lawyers practicing in the area, or those dabbling.
Have a great day.
Paul E. Trudelle
During Hull on Estates Episode 32, we discussed the book by Jordan Atin, Barry Fish and Les Kotzer titled "The Family War: Winning the Inheritance Battle" including how to avoid inheritance battles, how to deal with them when they do occur and strategies to end them quickly and successfully.
Hello. My name is Paul Trudelle, and I am an associate with Hull and Hull LLP. I am the guest "blogger" this week. I plan to use my time and space to address some of the issues surrounding the due execution of a will.
Execution of a will is often seen as a simple task, but the process can sometimes pose serious challenges to the practitioner retained to prepare an effective will. Challenges to the validity of a will on the basis of due execution are common, as are solicitor negligence actions where the will fails as a result of improper execution.
The requirements for due execution of a will are set out in Part I of the Succession Law Reform Act, R.S.O. 1990, c. S.26 as amended ("SLRA"). The SLRA provides the framework for the valid execution of a will. These sections merit a review. Section 3 provides that a will is valid only when it is in writing. "Writing" is defined in s. 29 of the Interpretation Act, R.S.O. 1990, c. I.11 as including words printed, painted, engraved, lithographed, photographed, or represented or reproduced by any other mode in a visible form.
There is no provision for videotaped wills in Ontario. A will may be written in a foreign language. However, when applying for a Certificate of Appointment, the Court must be furnished with an authenticated translation. Alternatively, a non-English speaking testator can have the English will read to him by a translator. The translator should swear an affidavit averring that the will was read over to the testator and that he or she appeared to understand it. Section 4(1) of the SLRA sets out the requirements for due execution.
Tomorrow, I will look closely at the requirements of this section.
Have a great day. Paul Trudelle
Evidence Required to Prosecute or Defend the Claim Attention may be turned, in considering an Order Giving Directions, to the evidence that will be required to prosecute or defend a claim. Section 13 of the Ontario Evidence Act specifically deals with actions by or against the heirs, next of kin, executors, administrators or assigns of a deceased person. Section 13 states:
In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect to any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.
In determining the nature of the evidence required then to prosecute or defend a claim, one must keep in mind that an adverse party cannot rely on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence. Section 13 places this additional evidentiary burden on the adverse party understandably because of the estate's difficulty in defending an action without the oral evidence of the testator. In Burnes Estate v. Mellon, the Court of Appeal held that the corroborating evidence must be in addition to and independent of the viva voce evidence of the adverse party but that it could be either direct or circumstantial.
Continue Reading...If an executor/estate trustee is in a position of conflict in respect of a proceeding, an estate trustee during litigation may need to be appointed by the Court. This appointment may be addressed in an Order Giving Directions. If the parties are unable to agree upon the appropriate estate trustee during litigation, that issue can be put to the Court. Security is generally required to be posted unless the estate trustee during litigation is a trust company. If appointed, the estate trustee during litigation will be appointed pending final resolution or settlement of the litigation and/or order of the Court.
An Order Giving Directions often includes a provision that a Certificate of Appointment of Estate Trustee During Litigation be issued to the estate trustee during litigation subject to the filing of the necesssary supporting application. If a Certificate of Appointment of Estate Trustee has already been obtained prior to the Order, the Order should provide for the return of that Certificate to the Registrar.
In the event that an estate trustee during litigation is required, one might consider including a provision in the Order setting out the reasonable remuneration that the estate trustee during litigation may charge. A remuneration agreement may often be negotiated and attached to the Order as a schedule. Increasingly, trust companies are insisting on such agreements. If the estate trustee during litigation is to be entitled to pre-take its compensation (subject to the ultimate approval of the Court upon the termination of the appointment), same can be specified. Parties may also wish to negotiate a provision in the order regarding the authority of the estate trustee during litigation.
Continue Reading...A Separation Agreement or a Marriage Contract between married spouses may contract out of the rights afforded to married spouses by Statute.
If married spouses separate within the meaning of the Family Law Act, their relationship is typically governed by the provisions of a Separaton Agreement. A Separation Agreement is a contract and is governed by the common law as it relates to contracts.
As a general proposition, the intention of a Separation Agreement is generally assumed to be to ensure that the parties, as between themselves, contract to ensure that neither benefits from the other's property after the termination of the relationship.
If the obligations contained in a Marriage Contract are incorporated into a Will, the obligations will continue notwithstanding the fact that the contract has itself been found to be invalid.
Unless the provisions in a Marriage Contract for the surviving spouse are clear and straightforward, there is a risk that the provisions in the Will may amplify the benefit flowing to the surviving spouse.
As a general proposition, spouses that have entered into a Separation Agreement do not typically intend their spouse to thereafter benefit from their estate. However, unless the Separation Agreement is very carefully worded, the Wills made by the parties to the Separation Agreement, even if those Wills predate the Separation Agreement and appear on their face to be contrary to the intention of the Separation Agreement, will be found to prevail.
Continue Reading...
In addition to the basic themes of the Commentaries (see our June 9, 2006 blog), they also reflect the role that the trusts and estates lawyer has traditionally played as the lawyer for members of the family. In that role, a trusts and estates lawyer frequently represents the fiduciary of a Trust or an Estate and one or more of the beneficiaries.
In drafting the Commentaries, the authors have attempted to express views that are consistent with the spirit of the MRPC (Model Rules of Professional Conduct) as evidenced in the following passage:
"The Rules of Professional Conduct are rules of reason. They should be interpreted with reference to the purposes of legal representation and the law itself."
The editors note (at page 1 of the Commentaries) that a goal of the Commentaries is to encourage a full discussion between a lawyer and a client as to the scope and the cost of the representation. Furthermore, the duties of trusts and estates lawyers are also carefully considered and described. In the U.S. jurisdictions, many of the parameters of the duties of estates and trusts lawyers are set out by opinions rendered in malpractice cases, which provide some guidance regarding some of the ethical duties of the lawyer as well.
Continue Reading...Ian is honoured to be a Fellow of the American College of Trust and Estate Counsel and, as a Fellow, he receives ongoing updates from the perspective of U.S. Estates Law. Interestingly enough, the similarities between the United States and Canada are considerable. For example, the leading decision of Banks v. Goodfellow (1870), L.R. 5 Q.B. 549 is used as a benchmark testamentary capacity case in most U.S. jurisdictions. Therefore, the starting point with regard to the U.S. law and its experiences are fairly similar to ours in many situations.
One of the recent massive undertakings that ACTEC has completed is the fourth edition of the Commentaries on the Model Rules of Professional Conduct.
These model rules were first published in 1993 and the Commentaries continue to assist U.S. courts. There are ethics committees and other aspects of the U.S. Estates Bar that use these model rules as a true "benchmark" for many of the pressing issues.
As the introduction to the Commentaries explains, they generally seek to identify various ways in which common problems can be dealt with, without expressly mandating or prohibiting particular conduct by trust and estates lawyers. The Commentaries are intended to provide general guidance to the trust and estates lawyers.
Ian and I intend to work through the Commentaries in some respect throughout the next little while in our Podcasts; however, we thought that it might be helpful to, in a written format through our daily Blog, walk through some of these interesting issues as well.
The basic themes of the Commentaries are:
-the relative freedom that lawyers and clients have to write their own charter with respect to a representation in the Trust and Estates field;
-the generally non-adversarial nature of Trusts and Estates practice;
-the utility and propriety, in this area of law, of representing multiple clients, whose interests may differ but are not necessarily adversarial; and
-the opportunity, with full disclosure, to moderate or eliminate many problems that might otherwise arise in an Estates practice. (See ACTEC Commentaries, page 1).
More will follow on Monday... All the best, Suzana and Ian. --------
READ THE TRANSCRIBED PODCAST HERE
During our podcast, we continued our discussion on ways to "bullet-proof" a will:
(iv) properly documenting any gifts you make during your lifetime;
(v) carefully considering unequal treatment of your beneficiaries;
(vi) will drafting - losing a gift if you challenge the will;
(vii) contracts not to contest a will; and
(viii) avoiding making casual "will like" dispositions. --------
READ THE TRANSCRIBED PODCAST HERE
During our podcast, we discussed the following legal issues:
(i) The financial and emotional costs of estate litigation;
(ii) Protecting your estate with advance planning;
a. develop a comprehensive estate plan
b. consulting with beneficiaries in advance --------
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