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

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I recently had the opportunity to meet with a gentleman named Franco Lombardo from Vancounver B.C. who has pioneered the concept of "authentic wealth" in the context of succession planning.  Franco has written two books:  Life After Wealth and Money Motto both of which deal with and elaborate on his core concepts of devising strategies for individuals who want to create a meaningful personal legacy. 

In Lombardo's words: "Authentic Wealth involves seeing, understanding and releasing fears around money, and, at the same time, embracing a deeper understanding of who we are, why we are here, and how we create meaning through the choices we make every day"

Franco has founded Veritage, a company through which he consults with clients with a view towards a more holistic succession planning strategy.   The concept of collaboration between a testator and his or her beneficiaries in realizing family objectives has also been explored by Ian Hull of our office and his concept of the Family Conference as a means of avoiding estate litigation. 

David M. Smith

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A recent article in the Ontario Lawyers Gazette discusses succession planning for lawyers with respect to their practice. Lawyers often fail to plan for their retirement or death and often do not set up a formal succession plan for their practice to the determent of their families, clients, and colleagues.

The article states that 41% of practicing lawyers are over 50 years old and 34 % of all lawyers in Ontario are sole practitioners with an additional 29% working in firms of two to ten lawyers. However, often lawyers do not prepare well enough in advance for the winding down of their practice or what will happen to their practice in the event of their death or disability.

The article makes a number of helpful suggestions including:

• Advising sole practitioners to assign another licensed lawyer or paralegal with alternative signing authority for their trust account in the case of an emergency;
• Suggesting that practitioners name a licensed lawyer or paralegal as a limited trustee in their Will for the sole purpose of winding up a practice;
• Advising lawyers that a non-lawyer trustee or attorney pursuant to a Power of Attorney may not be able to deal with some of the issues with respect to winding down a practice;
• Advocating that lawyers communicate with their families, partners, and employees their succession plan; and
• Advising lawyers to plan well in advance (i.e. five years) to maximize their financial compensation.

The Law Society offers A Succession Planning Toolkit and a Guide to Closing Your Practice to assist lawyers. On May 20, 2009, the Law Society will be offering a teleseminar Succession Planning for your Practice  discussing these topics and more.

Thanks for Reading,

Diane Vieira

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Listen to "The Dog Days of Summer: Planning for the Transfer of the Family Cottage"

Read the transcribed version of "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.

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Listen to "Mutual Wills"

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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.

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During Hull on Estate and Succession Planning Podcast #35, we discussed:

• Special needs beneficiaries;
• What the definition of a special needs beneficiary is;
• The use of trusts for special needs beneficiaries; and
• The proper planning for special needs beneficiaries and what happens to the assets and the trust when the special needs beneficiary dies.
  

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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.

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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

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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.

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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.

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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.

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

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

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

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

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

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

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

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

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

The basic themes of the Commentaries are:

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

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

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

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

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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. --------

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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 --------