If there were no Will, Tessa's estate could have contributed to the British government's coffers.  In that circumstance, a probate research firm could have played a role. 

Title Research is one of the firms highlighted in yesterdays blog about "heir hunters".  Its services include: searches for missing beneficiaries, heirs, and legal documents (such as marriage, birth and death certificates back to the 1800s); asset research to value, verify and find missing or unknown assets; missing beneficiary indemnity insurance; probate valuations; and will searches to determine that the Will is the deceased's last will. 

If Tessa had died intestate, Title Research, and other firms, could have located her heirs around the world.  Alternatively, if the estate trustee had questions about the value of the estate assets, or had the trustee not known the whereabouts of the beneficiaries, it could have enlisted a search firm's services as some anecdotes suggest.

Potentially trustees can protect their personal liability by engaging a firm that has a best practices endorsement of Britain's Law Society.  It seems that an estate need not just have ties to the UK, but the extent of a firm's expertise in a specific jurisdiction would have to be assessed.

Interestingly, some of the detective work can be done by amateur sleuths: www.findmypast.com and www.ancestry.co.uk allow access to census data from the 1800s and a host of other historical information.  If genealogy is in your blood, it's a place to start.  And, as one UK law firm suggests, it might be advisable to do some of your own investigating.

Jonathan Morse

Fellow walkers from Britain were interested to learn that I work in estate litigation. After sorting out differences in our terminology, they asked if “heir hunters” exist in Canada. I was intrigued.

While I still do not know the extent of “heir hunting” here, I learned that Heir Hunters is a BBC series that follows probate detectives who look for distant relatives of people who have died without making a will. I have not heard of a similar program in North America.

Several UK firms track down missing relatives: Fraser and Fraser  and Title Research are two examples. About 545,000 people die in Britain every year and half of them do not have a will. As in Ontario, there are rules in Britain which dictate that when people die intestate, their estate passes to the deceased’s legal next of kin. In Britain, if there is no family, the estate falls to the Crown.  The Guardian claims that £10 million to £20 million falls to the government every year because there is no one to claim the estate. Heir hunters locate the next of kin and alert them to their inheritance; there is a finder’s fee of up to 25% of the amount.

Many people in Canada can trace their roots to the United Kingdom. Estate practitioners, if advising estate trustees, would be well served to keep “heir hunting” firms in mind. 

Thank you for reading.  Enjoy your day.

Jonathan Morse

The basic premise is that executor compensation is taxable in the hands of the recipient. It is either income from an office or employment (if the executor is not in the business of being an executor) or income from a business (if the executor is in the business of being an executor, or if such a function is in the executor’s usual course of business). Various consequences flow from the distinction, such as allowable deductions, and withholding requirements for EI and CPP.

CRA takes this obligation to report executor compensation quite seriously. An example of the lengths to which CRA will go is found in the decision of Oolup v. The Queen. There, Ms. Oolup, the executor held a joint account with her grandmother, the deceased. She was advised by her lawyer that upon the death of the deceased, the joint account became hers, by right of survivorship. However, for “reasons of family harmony”, she decided to keep only $10,000 from the joint account, and divided the rest with the deceased’s next of kin.

CRA took the position that the $10,000 was executor compensation, and was therefore taxable, and they assessed Ms. Oolup accordingly. To get to this point, they argued that the joint account was held on a resulting trust for the estate. The CRA argued that the presumption of resulting trust applied, and was not rebutted. Accordingly, they asserted that Ms. Oolup received the $10,000 from the estate, as executor compensation.

Luckily for Ms. Oolup, she was able to rebut the presumption, and the court found that the joint account funds became her property upon the death of the deceased. She received the money by right of survivorship. Therefore, her keeping $10,000 was not receipt of compensation by her, and was not to be included in her income.

Thank you for reading,

Paul Trudelle

Coen brothers?  Nope.  No, not Tim Burton either.  In fact, this is a statement put forth by an MP in New Zealand after the third case of body snatching in less than a year. 

As reported in the BBC news yesterday, the body of a 76-yr old woman was hijacked right out of the back of the hearse by four carloads of people including her estranged daughter.  The bizarre, but not unprecedented, scene sparked a bitter family row over the deceased's last wishes with respect to her funeral arrangements.  The deceased had been married to a Maori man but separated from him in the 1970s.  Clashes over where people are buried are apparently not uncommon in Maori society, particularly in marriages of mixed descent (e.g. Maori and European).

Incredibly, a spokesman for police national headquarters said they had limited power to intervene: "Body snatching is not against the law" since, in contrast to Ontario, a body cannot be legally owned in New Zealand.  The recent cluster of body snatching cases may lead to an overhaul of New Zealand law regarding who owns a body.

David M. Smith

If you are familiar with Kafka and his short literary works, you will know that he was a tortured literary genius who was unsure of his own talent to the point of torment.  In 1924, dying of tuberculosis, Kafka wrote to his friend of 20 years and fellow novelist, Max Brod.  Kafka had made a list of his three novels and a number of stories and gave strict instructions to Brod to destroy all his manuscripts 'unread and in their entirety' and to ensure that already published works would never be re-printed.  These instructions were not contained with a formal last will and testament, rather they were a penciled note found in a drawer after his death.

Kafka's lover, Dora Diamont, partially executed his wishes by stashing away letters and notebooks until they were seized by the Gestapo in 1933. Sidebar: These papers are the subject of an ongoing international search.  Brod, however, ignored his friend's wishes and instead oversaw the publication of the works in his possession.  Brod's defence was that if Kafka had really wanted the works destroyed, he would have appointed another, more ruthless executor. Kafka, had, according to Brod, trusted Brod to not burn his writings.

Interesting question, perhaps not in the legal sense, but in a moral and ethical sense: Is it possible that Kafka undermined his own intentions by the very nature of the relationship he had with his executor?

Such difficulties have led some commentators to espouse the viewpoint that a family member ought not to be an executor of an estate in which the family home is the most significant estate asset.  To my mind, such recommendation is a bit extreme:  each family is different and while there is no certainty as to how the children will interact with one another on the death of the surviving parent, it is worth noting that the vast majority of estate administrations are not referred to litigation counsel.

As noted in a recent article in the New York Times, the difficulties that may arise in the sale of the family home are often best resolved through the advice of a good listing agent and effective communication between the executor and his or her siblings. Such issues that may arise include: the appropriate list price, how to show the home to attract the most optimum sale price, and what upgrades (if any) to engage in and whether to use estate assets for this purpose.

David M. Smith

This week on Hull on Estate and Succession Planning, Ian and Suzana  talk about the first, pre-probate stages of administering an estate.

The dot com business revolution has now spawned e-services with catchy names such as PrivateMatters.com and YouDeparted.com.  YouDeparted.com, for instance, acts as "an electronic safety-deposit box".  For an annual fee, the site will store critical information that an executor would require access to in order to administer an estate: the location of the Will, a list of internet passwords, the combination to the home safe, etc.  As a member of one of these service providers, a subscriber can enter email messages timed for delivery after his or her death.  When the subscriber dies, the "virtual executor system" sends an email to the subscriber as a safeguard.  After no reply is received, the data is delivered to a designated surviving recepient; presumably, that person will be the executor of the subscriber's estate.  While the subscriber will typically entrust financial details to the service, it is noted that such sites may also provide a means for a testator to convey the precatory advice for such things as the care of a pet that would otherwise accompany the Will in hard copy as a Direction to the executor.   

The long term viability of such services is a matter for debate.  While it is interesting to see business innovations which impact upon our area of the law, they remain susceptible to the security concerns that plague all on-line businesses.  This is a greater than usual concern when the subscriber is entrusting the system with all of his most sensitive financial details.  Still, there will always be on-line devotees willing to have the benefit of this type of service over plain old pen and paper.    

Thanks for reading,

 David