This week on Hull on Estate and Succession Planning, Ian and Suzana talk about appointing a guardian for your children. They also discuss Ian's appearance on BNN's Strictly Legal with Michael Cochrane.

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Comments? Send us an email at hullandhull@gmail.com, call us on the comment line at 206-457-1985 or visit the blog at http://estatelaw.hullandhull.com/

This week on Hull and Estate and Succession Planning, Ian and Suzana talk about values and appraisals. They specifically look at some of the issues related to assigning value to assets such as jewellery, automobiles, antiques and artwork.

Comments? Send us an email at hullandhull@gmail.com, leave us a message on our blog or give us a call at 206-457-1985.

Determining Value - Hull on Estate and Succession Planning Podcast #101

Posted on February 26^th, 2008 by Hull & Hull LLP

Suzana Popovic-Montag:  Hi, and welcome to Hull on Estate and Succession Planning.  You’re listening to Episode #101 of our podcast on Tuesday, February 26^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: I’m just great, thanks. I just want to remind anyone who’s interested that we have set up our comment line: 206-457-1985. That’s 206-457-1985.

Suzana Popovic-Montag: And we’ve also got our gmail address for anyone who’d like to send a comment by way of gmail. And that is: hullandhull@gmail.com.

Ian Hull: Terrific. Well, we have the pleasure of making this one a perfect podcast because we’re at 101 and we’re re-recording. For some reason, our last one didn’t catch.

Suzana Popovic-Montag: And that’s a rare occurrence, I can assure you.  Re-recording with Ian Hull.

Ian Hull: So we’ll get it even more perfect this time. But again, great fun being able to leap over the 100 podcast mark and really enjoy doing these podcasts with you. Had a good topic last week which I butchered, no doubt, without you, but we talked about valuation issues. And I tried to focus on the real estate issues in particular. So for today I thought it might be useful to take it that next step and talk about some other issues relating to valuation because my theory is this is actually the cornerstone of any administration and can be the source of many, many problems in a contested environment.

Suzana Popovic-Montag: And I think in terms of starting with the different types of appraisals, we’ll start with my favourite, and that is, jewellery appraisals.

Ian Hull: Yes. And those of you who don’t know, Suzana is an expert in jewellery. If you do see her in person, you’ll notice that instantly.

Suzana Popovic-Montag: I don’t know anything about appraisals though.

Ian Hull: But she knows value. So what about the jewellery appraisals? There seem to be, sort of two aspects of this issue.

Suzana Popovic-Montag: I think what you’re referring to there, Ian, is the fact that the appraisal in terms of the ultimate value of that bequest to whomever it’s ultimately left to at the end of the day.  And then the second side of that would be, of course, the value that’s added to certain jewellery owned by the deceased on the date of death for the purposes of probate tax.

Ian Hull: Absolutely. And I was also thinking of a third, now that you mention it. So I have now three ideas, and the third is, is that the special nature of the asset itself. Like real estate, where you might have a cottage which has got tremendous personal and emotional issues tied to it, real estate is only one aspect of administration that does that, of course.  And another is easily identifiable, certainly in our experience, is jewellery. A piece of jewellery brings with it perhaps the source of great frustration in litigation unfortunately.

Suzana Popovic-Montag: And that’s really because of the sentimental value that can be attributed to a piece of jewellery that may not have a very large financial value to it at the end of the day, but in terms of the sentiment, the emotion behind it can really be a flashpoint during the course of any particular estate administration.

Ian Hull: So like a real estate appraisal, it seems to me worthwhile to really address where your source of the appraisal is coming from. Are you using a reputable jeweller? Or are you using a pawn shop sort of analysis of what it’s worth. And, of course, that brings about the important question as to does it really matter? Does the valuation really matter or is it just a question of allocating this piece to one person and that piece to another person?

Suzana Popovic-Montag: I think just to follow up on that thought, Ian, also many times people will insure jewellery for the purposes of having, you know, the requisite or the appropriate amount of insurance on something. And those appraisals, as we know, tend to be a little bit higher than perhaps the actual value of the piece of jewellery. And so that’s something else that we might want to keep in mind if, as you say, the value actually does matter at the end of the day.

Ian Hull: That’s a good point as well. Really, from my perspective, the inventory of the jewellery itself is so crucial.  And any early steps that can be taken to ensure that you’ve got your assets under control in any estate administration are important, but jewellery can be something that if you lose a ring here or there, can be a big problem for an executor.

Suzana Popovic-Montag: And I know you’ve mentioned in previous podcasts the possibility of videotaping certain things within the home of the deceased and I think that jewellery is one of those key things that you may want to consider actually having pictures of or videotaping because it can be really difficult to identify a gold ring amongst ten of them; some with diamonds, some without, some with other stones. Not that I’m speaking from experience …

Ian Hull: You’re hearing this from the expert, let me tell you. Just looking now how many gold rings she has on. They all look the same to me.

Suzana Popovic-Montag: That’s a man for you.

Ian Hull: Alright, so the jewellery issue is one.  What’s another issue on the appraisal side that we want to think about?

Suzana Popovic-Montag: I would suggest that the automobile appraisals at the end of the day are also quite important.

Ian Hull: That’s for sure, because the automobile itself needs to be dealt with and sometimes it can be a very valuable asset of an estate. Or other cases, it really can be a pain in the neck. I noticed recently an advertisement for a car dealership that says, “We’ll take any car, you don’t have to come buy a car from us, we’ll buy any of your cars off your back”, so to speak, and get that off your list.  And it even says for estates to feel free to call the dealership because we’ll buy your car. And I thought that was a great hook because really, from a standpoint of an executor in most estate administrations, dealing with the car is a bit of a pain in the neck because the value is often, by the time the person has passed away, a modest amount.

Suzana Popovic-Montag: And also, by the time it’s actually administered because there’s always that little bit of a delay from the time of death to the time assets are actually transferred, and of course, we know that cars don’t necessarily, unless they’re collector cars, appreciate over time. Most will depreciate.

Ian Hull: Yeah and that’s right. And this is really one of those assets that is a not… this is like a wasting asset, as opposed to some, you know, for example, if the real estate market’s going up or jewellery becomes more valuable over time, that could be either way on jewellery, but it’s important to really get it and manage it quickly, make sure that the car is insured instantly so if someone does steal it out of the driveway and go for a joyride or something like that, there’s no liability to the estate trustee in that regard. I had an interesting case once where the car was left in the driveway for a year and a half. The oil had leaked out onto a gravel driveway and it created an environmental problem because the oil and gas had been leaking out of the car in a situation where there was no environmental problem. Now it wasn’t huge, they were able to clean it up.  But when they went to sell the house, they had an additional liability that’s just, as I say, it’s something that shouldn’t be taken too lightly and it’s easily administered. So the Courts are not going to be very sympathetic to an executor who hasn’t moved quickly to deal with an automobile because it is so readily marketable and so easily dealt with.

Suzana Popovic-Montag: So Ian, any other things that you think would be important to value at the date of death?

Ian Hull: Well, I think the other two that come to mind anyway are antiques or more globally, just artwork as such.

Suzana Popovic-Montag: And do you find that many estates have either antiques or artworks just as a general rule?

Ian Hull: Well it’s hard to tell. And you’re right, I mean, you don’t see a lot of antiques or artwork that come into an estate of great value. But it falls into the category of jewellery which may become much more important to the individuals because this corner table always sat by mom or this was where dad always smoked his cigars and you had great discussions with or something like that. There’s some emotional value to it as well as the antique value to it. So yeah, I think it’s one of those things that you mentioned earlier, videotape your assets, go through the house, go through the place wherever the assets are…lock it down so that you know where things are. If something goes missing, a painting goes off the wall, I mean it may not be a Van Gogh and you may not have lost a lot in the process of one of the beneficiaries coming over to the house to clean it up and then take the painting with them. But you might have created an emotional issue that you’re underestimating how the other family members will react to and you’ve created new problems for yourself.  Because the obligation as a trustee is from the moment of death, you are charged with control and custody of the assets of the estate. And sometimes you’ll see cases where executors are told by, for example, a trust company or someone will go right in and change the locks quickly to a house. Well it seems to be to a lot of people, people will think, “Oh my gosh, that’s terrible. It seems very draconian, very over the top”. But it really isn’t in most cases because of this onerous obligation to account.

Suzana Popovic-Montag: I think that’s a really good point and just sort of thinking of other assets that might be flashpoints. You know there’s often times like silverware or, you know, other kinds of things that were owned by the deceased that to a third party trustee may have almost no value at all.  But the sentimental value to certain family members can really not, you know, we can’t underestimate that and so the suggestion of taking some kind of picture or video of it seems to be probably the best way to deal with that.

Ian Hull: So just to recap the valuations issue, there’s two main points as far as it seems that we’ve been trying to focus on in the last two podcasts. One is, of course ,what level of valuation do you want undertaken? Do you want a belt and suspenders careful valuation with any of these assets by a qualified valuator and at the Cadillac level, so to speak? Or do you want the sort of drive-by ad hoc valuation because it doesn’t really matter? For example, the jewellery items, there’s twenty of them, they’re all relatively modest in value and you don’t want to go to the expense of incurring it. Those are the kinds of considerations you need to look at, I think, from the starting point on the valuation.  And then the second part of valuations is, as you say, making sure you get control and custody of all the assets so that you are indeed valuing the assets as of the date of death in a professional way, in a way that no one can criticize you for having messed up on.

Suzana Popovic-Montag: Well that’s great Ian. I think that sort of wraps it up for today anyways. And so I just wanted to remind anyone who’s listening, if they would like to send us some comments, they can certainly feel free to call us at 206-457-1985 or send us an e-mail at hullandhull@gmail.com. That’s hull, h-u-l-l-a-n-d-h-u-l-l @gmail.com. And, of course, you can feel free to visit our blog which is at www.estatelaw.hullandhull.com. Thanks again, Ian.

Ian Hull: Thanks Suzana.

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.

/mem

This week on Hull on Estate and Succession Planning, Ian talks about an interview he did this week for a new website called Law is Cool and why he podcasts.

Ian and Suzana discuss the importance of preparing for the death of a spouse or for the welfare of your spouse upon your death. This preparation includes having a good idea of the assets you share and the importance of appointing a guardian for your children.

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.

The Surviving Spouse - Hull on Estate and Succession Planning Podcast #96

Posted on January 22^nd, 2008 by Hull & Hull LLP

Suzana Popovic-Montag:  Hi, and welcome to Hull on Estate and Succession Planning.  You’re listening to Episode #96 of our podcast on Tuesday, January 22^nd, 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?

Ian Hull: I’m just great, thanks.

Suzana Popovic-Montag: That’s good.

Ian Hull: We’re moving along into ’08.  I was listening to our last week’s podcast last night actually while I was walking my favorite animal in the world, Lola, our new dog. And I noticed that your voice isn’t as loud as mine in some of these, so you have to speak up. I should have told you this off-air, but I was just thinking of it now.

Suzana Popovic-Montag: Nothing like improvising, Ian. Thanks very much.

Ian Hull: So get closer to the microphone. Okay.  So, you know, it’s been a fun week this week. I just got interviewed actually and it won’t be launched, I’m told, it’s a podcast and website called lawiscool.com. And I just got interviewed by these guys about an hour ago and it won’t be up into the podcasting world for some months, they tell me, because they are all volunteers and trying to pass their courses at the same time. But it was interesting because the first question that came to mind as we were off-air and talking about it was, you know, why the heck are we doing this, and what are we doing podcasting as a firm. And I told them a story the other day, it happened to me, was I was on a file and we were in a meeting with my client and across the room was the other client with their lawyer. And the client on the other side looks across the table and says, “I’ve listened to your podcasts, you know that, Ian?” I had a good laugh because I thought, that really is what we’ve been trying to do and that is, educate ourselves, educate others and have some fun along the way.  And we certainly are not discriminating in terms of who we want to educate, whether it’s on the side of good or evil.

Suzana Popovic-Montag: Great story, Ian.

Ian Hull: Not that they’re on the side of evil, but the right or wrong. So anyway, listening to last night again, we really, I think, touched on a topic that was near and dear to many people’s hearts and that is, how you deal with funeral arrangements and things like that, some of this pre-probate issues. So I thought another one that can be particularly volatile and one that is worth talking about, what to consider, and that is, and we’ve touched on this briefly, but let’s really drill down on it, and that is, what about the surviving spouse? Now the scenario is whether you’re a surviving spouse or you’re the executor and you’re going to have to deal with the surviving spouse, what sort of pre-probate unique characteristics does that bring into the element? Obviously the first thing that comes to mind is the emotions. You’re a surviving spouse; you have lost your partner. It is, you know, difficult to organize a funeral at the best of times.  Well, it’s also difficult to react to that horrible loss. So we thought we might talk a little bit about some of the things that, as a surviving spouse, you’ll want to keep your eye on the ball on before you get into the fancy seal stage in life in terms of the administration of the Will.

Suzana Popovic-Montag: And I think part and parcel of that is for you, as a surviving spouse, in that kind of situation, is you want to be able to, sort of, step back, notwithstanding the very emotionally charged atmosphere that you find yourself in and determine what kind of financial requirements you’re going to require going forward, see what it is that the will actually provides for you, and have the opportunity to speak with a lawyer to see what your options are in the circumstances.

Ian Hull: So one of the things that we tell a lot of our clients, and most of them don’t listen to us on, but this really comes back home to roost, is keep some meaningful summary, list, control, leads on your financial assets, so that your surviving spouse can determine really what he or she is going to need. You know, within a very short period of time, your surviving spouse is going to need to know what they’re going to be able to live on, what’s left, whether they’ve got to work more, work less, how they’re going to deal with it.  And if you haven’t organized a financial advisor or you don’t know where the life insurance policies are kept, or all of that sort of simple stuff, it’s going to make it that much harder for your surviving spouse in a non-contentious situation to get up on his or her feet.

One of the classic questions that a surviving spouse has to ask is whether or not they got enough under the Will. And that comes back to my earlier comment and that is, make sure that you make it as easy as possible for your surviving spouse to find where the assets are and determine what assets are there. But at the same time, you also want to acknowledge the fact that once you figure out that there is $100.00 there or there is $200,000,000.00 there, your surviving spouse has some core legal rights that they’re going to want to consider quickly.  And you can’t fix that. That’s just the way it works. It’s a community of property division, essentially an equal division on death, if you haven’t provided properly under the Will.  So you’ve got to accept that and so it comes back to the same thing; get the documents organized to make it easier for a surviving spouse to make an educated decision as to whether or not what he or she wants to do after death.

Suzana Popovic-Montag: And what you’re referring to there, Ian, is an equalization under the Family Law Act.  In Ontario, and I think a lot of jurisdictions have similar legislation, that provides for a division of assets on death, in the event that the surviving spouse chooses not to take his or her entitlement under the Will. And one of the key things with these elections and particularly under our Family Law Act is the fact that it is very time sensitive and that a surviving spouse has only 6 months within which time to decide whether or not to take the entitlement under the Will, which means you have to determine what that actually amounts to, or if you’re going to take your election under the Family Law Act.

Ian Hull: So that time sensitivity can get extended by lawyers getting involved and getting judges saying, “Okay, you can have some more time”.  But it’s there for a reason, and that is, is that people have to get on with their lives and they have to deal with the administration relatively quickly. So we don’t want to forget, again, it really does pay to be organized and to make things easy for your spouse.

Suzana Popovic-Montag: And another thing that I often will raise with people is the fact that spouse does not include a common-law or a same sex partner, and so that when it comes to these kinds of particular entitlements under the legislation, you want to make sure that you fit the proper definition of that, so that you can be entitled to it.

Ian Hull: And we, as lawyers, are always careful to make sure that strict deadlines aren’t missed, so we make a note of our 6 month election and I tell my clients to do the same, so that they are mindful of the fact that they’ve got to make some decisions fairly quickly and therefore it keeps the heat on them to track down assets and get organized.

Suzana Popovic-Montag: And another thing that arises in these kinds of situations is that if a spouse actually does elect under our Family Law Act, then he or she can’t act as the estate trustee, even if they’re named as such in the Will.

Ian Hull: One other claim that we’ve talked about before and we won’t go into great detail because we’ve spent a fair amount of time in recent podcasts on, though, is the fact that if there isn’t enough under the Will, you can elect under the Family Law Act as we talked about and we can equalize.  There’s another issue is that even if you got under the Will a certain amount of money and you needed more, you can make a claim as a dependant under most of the common law jurisdictions, where essentially you go to the Court and say, “Yeah, that’s fine, I’ll take my $50,000 a year out of the trust, but that’s not enough, I need a little more”, and the way I can claim that is through the dependant relief provisions of the Succession Law Reform Act.

Suzana Popovic-Montag: And that’s also a time sensitive election, Ian, because that application, if you’re going to bring it, has to be filed within 6 months from the time you do get the certificate of appointment or that probate. So another thing basically for us as lawyers and for clients to diarize and to sort of follow up on.

Ian Hull: So the final sort of surviving spouse issue I would want to talk about is that of the question of custody of child, children, and guardianship of property for the children. And before we get into that, I need to go on my typical rant with clients that I do and that is; just stepping back when you’re drawing a Will, the decision as to who your guardian is going to be can be the roadblock to doing a Will. And there’s nothing more silly than to let that be your roadblock because you need a Will far more important than you need to pick who is going to be your guardian of your children. I know it’s an emotional issue and young parents can never understand this, so they put off doing their Will.  And they just create more problems than it’s worth, because now, when someone’s died and say you’ve died with young children, the way it works is that at law, it really shows you it isn’t that important of a decision to make

Suzana Popovic-Montag: And you say that, I guess Ian, because you’re referring to the fact that when there is an appointment in a Will of someone to have custody of a child, that appointment is going to expire within 90 days from the date of death. And so, at that point, someone else or perhaps even that same person will actually have to bring an application to have permanent custody or guardianship determined.

Ian Hull: That’s right. And so you’ve fretted about this and you find out that it really is only a 90 day appointment and it’s subject to a further Court order.  So you’ve fretted about not doing a Will and you’ve created more of a mess then by not doing a Will because of that. And in Ontario anyway, but most common law jurisdictions, talk about the fact that you need a guardianship of property for the child and that exists where you are trying to pass on assets.  For example, in Ontario, for more than $10,000 to a child, you have to actually get a special guardianship order to administer that money that’s above and beyond $10,000.

So we get into those kinds of issues, and as I say, they can create log jams unnecessarily in almost every respect. So before we sign off, I was struck by a recent story that I saw and in terms of some frailties of the legal system and some of the craziness of it. Some years ago…this is a true story…to help fight crime, the founders and the mayors and the city council in Tacoma, Washington, a place that’s near and dear to me because my sister actually lives right near there, came up with a unique way of thwarting criminals.  And this is a true story in Tacoma, Washington, if you can believe it. They passed an ordinance; the City passed an ordinance which, in part, reads as follows: “It is mandatory for a motorist with criminal intentions to stop at the city limits and telephone the Chief of Police as he is entering town”. Now I made an inquiry with the city hall of the Town of Tacoma, Washington and asked about this ordinance.  And indeed it does exist.  And they admitted on the phone that there is no record of anyone making such a phone call. So you can see how crazy law can be.  And I thought that was a funny story that I ran into.

So we’ll work through this and continue to work through these administration issues in our next podcast. Thanks very much, Suzanna.

Suzana Popovic-Montag: Thanks to you, Ian.

Ian Hull: Bye.

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.

/mem

Dr. John began by reminding us about the harmful effects that negative emotions can have on your body.  Negative emotions cause the body to respond by releasing hormones, that can be helpful if released in moderation, however in the context of a stressful situation, these hormones become harmful, and can actually reduce the amount of blood flowing to your heart.

Dr. John elaborated, explaining that adrenaline is one of these hormones which can be very damaging to the your body when it reaches a high level and remains for too long in the body. It increases your heart rate and blood pressure, prevents deep breathing, and tenses up your muscles. If you are chronically stressed, the constant presence of these harmful hormones results in a decline of your immune system functioning, you will lose bone and muscle mass, and your fat will accumulate at a faster rate. Memory and learning capability can also be impaired.

Dr. John identifies a little-known fact. In regard to stress, it is not so much the stressful big events (such as a death in the family) which cause the most damage. Rather it is the little things that are slowly killing us. The daily accumulation of little stressors does the majority of the damage because it takes a constant toll on our body.

Things like traffic, deadlines and running late cause chronic stress, and as these factors put a constant strain on the body, you cannot rest enough to properly recover.

In a future blog, we will talk about some of the suggestions that Dr. John has with regard to avoiding chronic stress and changing your lifestyle to eliminate stress.

All the best,

Ian and Suzana.