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Listen to Dealing with Estate Planning

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss dealing with estate planning and encouraging everyone to draw up a will.

Comments? Send us an email at hullandhull@gmail.com, call us on the comment line at 206-457-1985, or leave us a comment on the Hull on Estate and Succession Planning blog.

Dealing with Estate Planning - Hull on Estate and Succession Planning Podcast #116

Posted on June 10, 2008 by Hull & Hull LLP

Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #116 of our podcast on Tuesday, June 10^th, 2008.

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag, that will provide information and insights into estate planning in Canada. From the offices of Hull Estate Mediation in Toronto, Ontario, Canada, here are Ian and Suzana.

Ian Hull:    Hi, Suzana.

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

Ian Hull: Terrific, thanks.

Suzana Popovic-Montag: That’s good.

Ian Hull: So, remember, of course, to everyone that we can attend to and listen for your call-ins at 206-457-1985 and we welcome any call-ins to our podcast.

Suzana Popovic-Montag: And also if you’d like to send us an e-mail, our e-mail address, just to remind you, is hullandhull@gmail.com, or you can visit us, of course, at our blog at estatelaw.hullandhull.com.

Ian Hull: Well, Suzana, last week we were working on this, I think I called it “Setting up the Perfect Set of Accounts”.  And we ended the podcast with a discussion on capital encroachments which I’d like to, if we can, sort of close the loop on that issue a little bit today if we have time. But before we go into that, we are the recipients of, the proud recipients of, and grateful recipients of, various newsletters that come in.  And one of the newsletters that comes in from Fiduciary Trust Company of Canada.  And this is a really interesting group and I highly recommend that you look into them as a possibility to help assist you in your estate planning matters.  It’s fiduciarytrust.ca. There’s a great group of people there that we know of and we’ve worked with over the years.  And, of course, you know, from that perspective, they’re a great resource. And they send out a newsletter. And I just thought, Suzana, you and I thought we might talk about the spring 2008 newsletter. It was from Issue 2, Volume 5 which we are going to get scanned and put onto our webpage so that people have access to it. But, we wanted to talk for a few minutes about what I thought was a really interesting topic.  And that is dealing with estate planning and how to encourage everyone to draw your Wills.  Because we’ve talked about it in the past, the nightmares that arise out of a situation when someone dies without a Will.  And this is an interesting article which talks about six ways to stall estate planning.

Suzana Popovic-Montag: And I highly recommend it to people, Ian, because the whole, the way that it’s written is very, very easy to read and it just highlights the fact that people of all ilks in life are dealing with the same kind of issues, perhaps on different scales and perhaps with different complexities.  But these are all basic issues.  And I even like the title of this, in terms of turning into the negative, ‘Six Ways to Stall an Estate Planning’ as opposed to, you know, why we should go ahead with it. It’s just a neat, easy read and very, very informative.

Ian Hull: And they pick up on a statistic that I typically throw around when anybody will listen and that is at the outset, that over 50% of Canadians do not have a properly planned and executed Will, Power of Attorney and healthcare directive. The author of this article sort of answers the question as to why people are prepared to leave their estate planning so unplanned, so to speak, and the one word they use is procrastination. So, let’s start with number 1.  What is the first thing that the stalling of the estate planning is matched up with?

Suzana Popovic-Montag: It’s actually one that I often hear, Ian, and that is that “I’m just too busy right now to worry about estate planning. It’s just not the right time in my life to sit down and turn my mind to it”.

Ian Hull: And that’s a really troublesome one. Whatever age you are, young people, of course, you have to concern yourself that if something tragic happened and unexpected, the old analogy of getting hit by a bus is the one that most young people typically have to focus on, because the option of passing away does not necessarily sit top of mind in their world. But the other aspect is, and what we see most troubling in our course of litigation practice, is that last-minute estate planning by anyone, and certainly anyone who is, I would say, anything starting at 65 years of age and over…the last-minute estate planning creates so many troubles and so many possibilities of litigation that it doesn’t make any sense.  It’s never made any sense to me to allow yourself to procrastinate yourself right into the lawsuit.

Suzana Popovic-Montag: That’s a really good point because we know that when it comes to prioritizing our days and we hear people talk about time management issues and that.  And even the article here distinguishes between, you know, things that are of an urgent nature and those that are just important.  And they sort of remind us that estate planning is not only important but it can be urgent because, as you say, that five minutes to midnight planning is just not the best way to do it.  Or the other alternative that something could unpredictably happen the next day to preclude you from ever being able to do that estate planning.

Ian Hull: Okay, the six ways to stall, from this article, and I should have said at the start, Thomas Junkin is the author of the article.  And we’re going to try to get through a few of them now before we get into our capital encroachment discussion.  But that was Item No. 1.  And Thomas is a Senior Vice President of Personal Trust at the Fiduciary Trust Company of Canada.  So we’ve got to give him all the kudos because, after all, it was his good organization and good writing that we’re working from here. But let’s talk about the second item and one item that we see every day as a lurking problem.

Suzana Popovic-Montag: And that is that thinking about death and then planning for it, is basically just a very frightening thing for most people to do.

Ian Hull: And, in fact, some people feel superstitious about planning for death. I’ve had cases where clients will sit across the table from me organizing their Wills and Powers of Attorneys and they have feared this moment because they think that somehow that’s going to trigger death. And you know, the superstitious belief as well, I mean, it’s not easily overcome.  But again, I mean one of the points that the author notes in the article is that the way to approach this is deal with it as an intellectual exercise and not an emotional one. And I use the simple illustration of the tremendous costs that you’re going to allow to be undertaken if you do not do a proper estate plan, just from legal fees alone, even if you don’t have a fight. The Government of Ontario and the governments across the province will govern how your estate is to be distributed and that is typically not Position A for most clients, obviously.

Suzana Popovic-Montag: So moving then to Mr. Junkin’s third reason that most people will stall their estate planning, he points out that often times we hear that clients are confused and intimidated by the very complexity of what they view to be the estate planning process.

Ian Hull: And that one is a comment that generally is a fair one. You know, the difficulty is even for young people who are organizing their affairs, organizing their affairs in the context of the estate planning issues, the tax issues, all of the things that we talk about in our weekly podcasts, can be a bit overwhelming.  And I think the easiest answer is to get yourself into the hands of good advisors or advisor, who can simplify what they are going to do for you. Not to say that the documentation is going to be simple, but that they can simplify the process for you. And we talk about primary and secondary Wills here in Ontario as a basic estate planning technique.  Someone who sits down with you and goes through that issue carefully could spend hours describing the different nuances, but at the end of the day, it probably can be described in fairly short order as being a tax planning technique. You are avoiding the estate tax in Ontario if you do it. Having said that, there are other planning techniques that come out of primary and secondary Will planning.  So get into the hands of a good simplifier, so to speak.

Suzana Popovic-Montag: And the author of the article that we’re talking about, Ian, does a very good job in terms of bringing it down succinctly by saying that all estate plans really just deal with three basic concerns and those are: people, property and plans. And he says the people are your family relationships, your financial affairs are your property and then, of course, the plan is the one that you’re going to deal with your investment advisors, your legal advisors, your tax advisors, to put together depending on the nature and extent of your estate.

Ian Hull: Okay, well listen, I think we want to work through this article again and as I say, this was sort of a last-minute decision and we thought we’d get it on the internet for you, on our webpage so that you can have it and look at it for next week’s podcast. 

The one last comment we wanted to talk through briefly today and this is obviously a topic for those that deal with this, could take up many, many hours of discussion.  It’s a complex area of the law, and that is what we talked about last week is encroachments on capital or taking the capital out of the estate, out of the trust, before its time, so to speak, before you have the spouse or surviving spouse pass away and before it passes on to the next generation, because the spouse needs it, quite frankly. And we wanted to spend a couple of minutes on the nature of the considerations that you have to go through when you’re an executor to encroach or take out capital.

Suzana Popovic-Montag: And I always want to remember the fact that sure, the person who’s looking for the encroachment, of course, is going to want that encroachment to have no difficulties with it.  But what we’re really dealing with here is the gift-over beneficiaries at the end of the day, the residual beneficiaries of that life interest who are the ones who are sort of going to be watching over the executor’s shoulder during the course of the administration to see to what extent was an encroachment made, for what purpose and was it something that they would otherwise have something to complain about.

Ian Hull: And I think in summary, the whole question of encroachment, the Courts have said very clearly that if you are going to take capital out and give it to the surviving spouse, for example, or this life tenant before its time, you have to undertake it in a judicious and careful decision-making process. You can’t simply do it on a whim. And you have to show why it was a good idea, in your mind, at the time.

Suzana Popovic-Montag: And as part of being able to show that at the end of the day, of course, you want to document the stuff, the decisions that are made and the reasons for those decisions during the course of the administration.

Ian Hull: Okay, well I think that’s sort of a brief summary of this area of the law. We may touch on it again as we work through our audit checklist, but I thought it was an important one. And when we touched on it last week we thought it would helpful to sort of close the loop. So it’s been great doing this podcast with you today, Suzana.

Suzana Popovic-Montag: And thank you, Ian. Just a quick reminder to our listeners, if anyone would like to call in with any comments or any feedback, to feel free to contact us at 206-457-1985.

Ian Hull: And please feel free to go to our blog at estatelaw.hullandhull.com, e-mail us at hullandhull@gmail.com.  And obviously, feel free to go to hullandhull.com.  Our webpage, as I say, will have some more new product on it to help you guys guide through this process. So thanks very much, Suzana.

Suzana Popovic-Montag: Thanks to you, Ian.

You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag. 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 Hull On podcasts, or to leave a question or comment, please visit our website at www.hullestatemediation.com.

Our theme music is UpTempo14 by Gary and is courtesy of the Podsafe Music Network.

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Listen to The Family Conference

This week on Hull on Estates, Natalia and Allan discuss the Family Conference.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estate blog.

The Family Conference - Hull on Estates Podcast #96

Posted on February 5^th, 2008 by Hull & Hull LLP

Natalia Angelini: Hello and welcome to Hull on Estates. You’re listening to Episode #96 on Tuesday, February 5^th, 2008.

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.

Natalia Angelini: Hi and welcome to another episode on Hull on Estates. I’m Natalia Angelini.

Allan Socken: Hi and I’m Allan Socken.

Natalia Angelini: If you want to be heard on Hull on Estates, you can participate in our discussion by leaving a comment. Give us a call at 206-350-6636. The number is in the show notes along with our e-mail address: hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.

So Allan, it’s great to be podcasting with you today. It’s our first time together.

Allan Socken: I’m very excited about it, Natalia.

Natalia Angelini: That’s good. We’re going to be talking about the family conference. So perhaps I’ll just set out what it is. The family conference is a professionally mediated conference and it essentially provides a forum whereby a testator can reveal his or her proposed estate plan to intended adult beneficiaries. And the objective is to obtain their approval of the plan. So it’s quite a unique animal, the family conference. It’s really the only formal mechanism in place in estate matters where someone can, you know, look their loved ones in the eyes and explain their plan to them, answer any questions about why they wish to have their plans set out in that manner. And ultimately in an ideal scenario, get agreement on it. So Allan, why don’t you tell our listeners what needs to happen in preparation for a conference.

Allan Socken: Well before the conference, I think probably the most important question to ask is who do you invite to the conference? And the simple answer is you invite all adults who are involved in the estate plan. At least, at a minimum, the people you invite would be the spouse of the person who made this estate plan as well as his children. And I think in inviting these people, it’s really important that you speak to them and have a candid conversation with them, obviously before the conference, explain the purpose of a conference, namely for all the people to appreciate what the person’s estate plan looks like and the reasons as to why they’re leaving certain gifts the way that they are.

Natalia Angelini: And who else can be invited?

Allan Socken: Really, any person who has an interest or involvement in the estate plan of the person.

Natalia Angelini: Right. And that would even include professionals, like the testator’s estate lawyer, their financial planner or accountant, because they certainly can have a critical role in explaining or answering questions dealing with the assets.

Allan Socken: For sure. And I think the other important thing to make mention of is there may be certain circumstances, probably quite frequently, where minor children have an interest in the estate plan. And it’s important to note that minor children should not be included in the family conference. In most jurisdictions, Ontario included, there’s an office known as the Office of the Children’s Lawyer, whose mandate is to protect the interests of minor children. And depending on what the estate plan looks like, it may be necessary to have discussions with them to see if it’s necessary for them to attend the conference as well.

Natalia Angelini: That’s a good point, Allan. So are there any other preparatory steps?

Allan Socken: The only other thing I’d like to make mention of is the question as to where to hold the family conference. Often people think that it may be prudent to hold it at a family member’s house.  But the reason why, I think, it’s not a good idea is, is often when you go to a person’s house, it may turn into a social function and it may lose the business touch that’s essential in planning for this conference. So I think probably the best place to hold a conference would be at the mediator’s office so people can really appreciate the business-like environment that they’re encountering and the importance placed on the family conference.

Natalia Angelini: In addition, it really is like a mediation and you want to be able to have individual caucuses as well as group caucuses. So you need several rooms and breakout rooms and privacy so you can really have it proceed in a meaningful way. So again, I think a mediator’s office or some other kind of office is ideal.

Allan Socken: I think moving along, Natalia, now we should address the agenda that’s put in place before the family conference. I think it’s important to stress to our listeners that an agenda is essential to have so that people are aware of what’s going to be taking place at the conference and so that divergence can be avoided as much as possible. So probably what’s important to include in the agenda is really the overview of the person’s estate plan which would include the proposed new Will, who the executor will be, funeral arrangements, debts of the person, taxation issues, guardianship of minor children, who may be the Power of Attorney and dealing with the distribution of specific assets for the estate.

Natalia Angelini: Right. I think it is critical to have an agenda and the family conference is chaired. And it’s usually chaired by either the testator or the mediator or someone else selected by the testator. So it’s great assistance to them to have an agenda to follow.

Now in respect of how the actual conference works over the course of a day or more than one day, it is much like a mediation.  And, you know, there is, I think, initially, commonly a group meeting where the chairperson goes through the rules of the day. There’s usually a family conference agreement signed which sets out that the mediator is neutral, that he or she is not offering legal advice, that all discussions are without prejudice, and of course, that the mediator is not liable for anything done or omitted at the family conference. So the usual sort of waivers. In addition, a document entitled Rules for Meeting is also signed. And Allan, why don’t you set out what is contained in that document?

Allan Socken: Typically for the Rules of the Meeting, it sets out that the parties understand who’s paying for the mediator’s time but not withstanding whoever is paying for the mediator’s time, the mediator still will be neutral throughout the process. As well, the parties agree that they’ll conduct themselves in a business and professional approach. And in that sense, there’ll be no harsh language spoken either at the other parties or the mediator. And believe me, I’m sure Natalia also can attest to the fact she’s seen certain times where discussions can get pretty heated.

Natalia Angelini: This is true. This is true. And I think in this kind of conference you really want to encourage views to be shared and grievances to be aired, but at the same time, in order for resolutions to come about, you want to make sure that everything is discussed in a cordial manner.

Allan Socken: And just the other thing to make mention of also is one of the rules should also include that all the parties are bound and acknowledge that they’re bound by the Family Conference Agreement. So they can leave whenever they feel like it if they feel progress is not being made. Certainly the mediator will try to keep them there and have the parties agree to at least spend a day there to try to sort things out. But even if the parties want to leave at the end of the day and no agreement can be reached, the parties still agree that all information and all people who were present can’t be subpoenaed in that respect. I think that’s important also to include in the agreement, Natalia.

Natalia Angelini: Good point, Allan. So again, it is a fluid process like any other type of mediation and it really can unfold in a different way depending on the parties and the circumstances.  And if an agreement is not ultimately reached at the end of the day, you can, you know, reconvene on another day if all or some of the people are willing to and you can get an agreement at a later time. What that looks like doesn’t necessarily have to be in accordance with the proposed estate plan. It’s not necessarily an imposition of that plan. The plan can be varied or amended pursuant to the comments and views of the beneficiaries and once an agreement is ultimately reached, it’s papered in a document that’s called The Family Constitution. And Allan, maybe you can expand a bit on that.

Allan Socken: Sure. Basically, you probably remember from law school, Natalia, that we always talk about the constitution as being a living tree.

Natalia Angelini: That’s right. Way back when I do remember.

Allan Socken: Well not surprisingly, The Family Constitution is also a living document that requires amendments from time to time. Because as people move on and age in years, no doubt their estate plan changes and when their estate plan changes, it’s really important that The Family Constitution is also updated. And I think as a preamble to The Family Constitution, it’s important to note that while family members may have different views and opinions, they unanimously - hopefully that’s the goal at the end of the day - that they unanimously decide to create this Family Constitution. And I mean, in certain circumstances, there may be family members who don’t want to agree to The Family Constitution or some people may not even want to have the meeting in the first place. So I think the role of the mediator shouldn’t necessarily be to prevent the family conference from going ahead, but perhaps to engage the people who are willing and interested at first to participate in the conference and hopefully, if success can be achieved there, people who didn’t want to participate in the first place may be inclined to give it another look and perhaps be willing to review the constitution that was agreed to. And even in certain circumstances, they may be willing to sign the agreement, albeit they may expect some changes to be made. But at the end of the day, some progress can happen even if not everyone in the family conference is willing at first to participate. And I think that’s important to keep in mind.

Natalia Angelini: Right, and one benefit to proceeding even if you don’t have everyone’s consensus is that the process can be of real value because it shows a testator’s clear intention as to how he or she wishes to divide his or her assets, which can really deflate any kind of brewing Will challenge at the end of the day. So litigation avoidance is one real positive potential outcome of the conference. And if you actually do get a Family Constitution signed, then it’s a great thing to have because it includes an agreement not to contest the Will. So that’s a great way to avoid litigation or ultimately if litigation is commenced, to use that document in defence of that.

Allan Socken: And just one final point for me to make Natalia, if that’s okay, is probably the most complicated aspect of this family conference is really the need for full disclosure. And for a lot of people, that’s really a difficult thing to do because there may be situations that people are embarrassed to admit or really don’t want to disclose.  For example, extra-marital affairs, not dividing your estate equally among your children.  But at the end of the day, if you want success to be reached with the family conference and you don’t want your Will to be contested or other legal remedies pursued when you die, I really think it’s important that you make mention of these difficult aspects so people can appreciate and they don’t feel as though you’re hiding anything. So while it’s difficult to disclose this information, I really think it’s important to get across that at the end, if you hide it, it will really do more harm than good at the end of the day.

Natalia Angelini: That’s right. I mean the fact is this is a delicate process and it’s not one that I think most people are willing to enter into because I think a lot of us would rather not deal with these delicate and difficult issues during our lifetime and we’ll just wait for everyone else to kind of deal with it after we’ve passed on. So I think people need to have, I think in a lot of cases, it helps to sort of have the courage to go ahead with the process and be open and ultimately, in an ideal scenario, get agreement on the issues or at least, you know, canvass them in an open and honest way.

So well, I think that brings us to the end of this week’s discussion.  Thanks for listening and thanks for joining me today, Allan.

Allan Socken: Thanks Natalia, I had a great time.

Natalia Angelini: That’s great. And we look forward to hearing from our listeners. You can send us an email at hull.lawyers@gmail.com or just pick up the phone and leave us a message on our comment line at 206-350-6636. And again, you can also visit our blogs at estatelaw.hullandhull.com, where you’ll even find more information and discussion on today’s practice of estate law. We hope you enjoyed the show. I’m Natalia.

Allan Socken: And I’m Allan.

Natalia Angelini: And until next time, 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.

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