Landen's wife appealed.  However, the Court easily concluded that the fact that legal title was in her name was irrelevant in circumstances in which the entire purchase proceeds came from the estate.  Adopting a quote from the Reasons for Decision of Justice Greer, the Court stated: "Since the money came from Landen in his capacity as a fiduciary, the constructive trust or express trust flows from him and the money can be traced from him to the house purchase and renovation." 

So too, for the same reasons, the wife's entitlement to any share of the property as the "matrimonial home" was negated.  Of passing interest to the profession was the Court's additional conclusion that Justice Greer was well within her jurisdiction by imposing a vesting order on the house for the benefit of the estate in the absence of a motion seeking such relief. 

David M. Smith

In 2005, cash-strapped Fisk attempted to sell the paintings from the collection in order to rectify its 'troubled financial condition'.  In court filings, Fisk officials indicated that the school would run out of operating funds by the end of 2007 without selling 50 percent of the collection.

In March 2008, the Court enjoined Fisk from selling the painting and ordered the school to put the collection on display by October 6th or forfeit the collection to the Georgia O'Keeffe Museum in Santa Fe, New Mexico. 

Since then, Fisk, arguing that selling the art for a reported $30 million does not violate O'Keeffe's original intent, has filed an appeal to sell half the collection to a museum in Arkansas.  This week, Fisk asked the appeals court to send the case back to trial court saying the judge should not have blocked the sale without a more comprehensive hearing.  Those of you familiar with my recent Machu Picchu blog, and the Beaverbrook blog trilogy of March 2007, October 2007 and August 2008 will find  some parallels here:  In court documents, the parties disagree as to whether the collection is a charitable gift as opposed to an asset that Fisk can dispose of at will.

Interestingly, the Fisk website indicates that "The Alfred Stieglitz Collection is unavailable for viewing due to renovations currently underway at the Carl Van Vechten Gallery". 

David M. Smith

This week on Hull on Estates and Succession Planning, Ian and Suzana discuss the question of compensation and complaints regarding compensation.

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Say Joe Smith is the executor of an estate but also received gifts from his mother the testator during her lifetime.  One of these gifts, say, came in the form of a transfer of a bank account into joint ownership between the two of them. 

Wearing his executor's hat (to use some traditional vernacular), Joe may have a duty to determine whether the bank account transfer was not a gift at all and actually subject to a resulting trust in which case the estate might have a claim to the asset.  Joe may need to do so because, as executor, his duty is to identify estate assets and bring them into the estate. 

However, wearing his hat as a recipient of the bank account, Joe is unlikely to want to give the bank account back to the estate. 

In short, Joe may have a conflict of interest.

In such circumstances, Joe may need two lawyers, one to advise him as estate trustee, the other to protect him personally.  Sometimes an executor’s conflict is such that he cannot continue to act as estate trustee. 

While this example may be simple enough, there is a tremendous range of conflicts that can creep into estate matters.

Thanks for reading.

Sean Graham

As discussed in the Business Standard, those in favour of heeding Nabokov's wishes are not willfully destructive.  It is understood that great writers might work through countless drafts before arriving at a final product that meets their approval.  On the other hand, there's the argument that writers (including Kafka) seldom can judge their own work.

The long twisted saga may find its fate as a cliffhanger of sorts.  In a dramatic verdict, Dmitri indicated late last month that he had indeed "decided to make a decision" about what to do, but that he would "neither disclose publicly either the decision or the deed."  Apparently (or should I say apparition-ly?), Dmitri reached his decision after an imagined ghostly conversation with his dead father.  Stay tuned for the future unveiling of either a box of Laura's ashes or what might be Nabokov's greatest literary work.

David M. Smith

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss what to anticipate as an executor and how to ensure that you are well prepared for your duties.

Generally speaking, most claims or objections to accounts arise out of what is perceived by beneficiaries to be negligence or failure on the part of the executor or trustee to maintain a proper standard of care and skill in his or her office. The most common complaints arise out of the following situations:

• investments by the executor or trustee which are not authorized by the will or by the law;
• the failure to provide a proper mix of investments so as to balance competing interests, such as life interests as opposed to remainder interests;
• the negligent or improper investment by the executor or trustee in investments of a speculative nature;
• an executor or trustee can be held liable for not maintaining the value of assets, such as a residence, by effecting proper repairs and would be liable for such neglect;
• executors or trustees must be extremely careful to make sure that all proper considerations are taken into account in making elections under the Income Tax Act, so as to avoid any criticism by the beneficiaries;
• care must be taken by an executor or trustee to ensure that prompt filings of returns are made and that penalties and interest payable on late filings are not incurred; and
• while trustees are seldom culpable for what are perceived by beneficiaries to be unnecessary delays, care must be taken to ensure that damages are not in fact incurred by the beneficiaries by reason of delays caused by inattention.
  

A "surcharge" alleges an omission for which there ought to be credit in the accounts. The most frequent surcharges relate to undervaluation of assets, assets not accounted for, non-disclosure of an asset and, in some cases, the incorrect recording of an entry.

Falsification of Accounts

A "falsification" alleges an item on the debit side of the accounts to be either wholly false or, in some part, erroneous. A claim against the estate which does not exist or is not realistic, or a payment by the estate of an account which is excessive, and in some cases, the incorrect recording of an entry, are all examples.

While the above does not purport to be an exhaustive list of the areas of negligence, we hope it serves as a useful starting point nonetheless.

All the best, Suzana and Ian. --------