Dealing with Estate Issues That Arise Immediately Upon Death - Hull on Estates #135
Listen to Dealing with Estate Issues That Arise Immediately Upon Death
This week on Hull on Estates, David Smith and Natalia Angelini talk about the duties an estate trustee he or she is charged with from the moment of a testator's passing. Duties include locating the will, making funeral arrangements and being responsible to see the intentions of the testator preserved.
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Dealing with Estate Issues That Arise Immediately Upon Death - Hull on Estates Podcast #135
Posted on November 4th, 2008 by Hull & Hull LLP
Natalia Angelini: Hello and welcome to Hull on Estates. You’re listening to Episode #135 on Tuesday, November 4th, 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.
David Smith: Hi and welcome to another episode of Hull on Estates. I’m David Smith.
Natalia Angelini: And I’m Natalia Angelini.
David Smith: If you want to be heard on Hull on Estates, you can participate by leaving us a comment. E-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com. Hello, Natalia.
Natalia Angelini: Hi David. How are you?
David Smith: You know I’m okay. I’ve got a bit of a cold so my voice is about an octave lower than usual, but we’ll do our best today. So today, Natalia, we thought we were going to talk about the issue of what duties an estate trustee is charged with from the minute the deceased passes away.
Natalia Angelini: Right. It’s a really interesting topic because it’s a time when I think the estate trustee has to act fairly quickly to do a number of things, and I think the first of those is locating a Will.
David Smith: That’s right and I suppose at the outset too, we should give a little plug to Paul Trudelle of our office who has given a paper. And there’s a webcast available on the website dealing with this issue as well. We’re, in our podcast, going to try and explore in a little more detail some of the issues that Paul touched on in his discussion. So we commend that webcast to you. So I guess, what’s the first issue that usually arises for the estate trustee?
Natalia Angelini: I think the first can definitely be finding the Will of the deceased, because the first thing the estate trustee wants to ascertain is what the deceased’s testamentary wishes were. And so that’s definitely an important thing to look for.
David Smith: That’s right and of course, you know everybody keeps their stuff somewhere different. In some cases, it’s a safety deposit box. In other cases, it’s a filing cabinet, under the mattress. It will depend on the person. So if the executor is charged with the responsibility to look for the Will, they’re going to look in the obvious locations, and hopefully be able to find the Will. And of course, the lawyer plays a role, because if the lawyer is known, he or she might have a copy of the Will.
Natalia Angelini: Right, exactly, so it’s a good idea to make inquiries with the lawyer of the deceased if you know who that lawyer is, or perhaps looking through the deceased’s personal papers, you can determine who the lawyer is and contact him or her that way.
David Smith: Right and you know, if you get into a situation where there’s just no luck finding a Will, you can advertise in the Ontario Reports. That happens on occasion, we all see lawyers do that on the odd occasion.
Natalia Angelini: Right.
David Smith: When someone says, yeah, I knew so and so had a Will but I didn’t know who drew it.
Natalia Angelini: Um hm. So I think aside from finding the Will, and probably one of the next things that the estate trustee is going to definitely be thinking about is making funeral arrangements.
David Smith: That’s right. And in the cases of an unexpected death, obviously that’s going to probably be a situation where the executor’s got to take some action of their own accord. Of course, with older people and people who are contemplating their own death through illness or what-have-you, or some other really sad situation, we’re seeing more and more that people will prepay their funeral or have them organized ahead of time. But in most instances, the estate trustee is going to have to deal with this, you know, obviously rather unpleasant task, and certainly it’s the foremost concern.
Natalia Angelini: Absolutely. And with respect to payment of the funeral, I think it’s helpful to note that those costs are of priority payment and come out of the assets of the estate. So if it’s not prepaid then at least the estate trustee hopefully has assets available to make that payment.
David Smith: Well that’s right and it’s probably worth just making the point at this stage too, that the government provides a death benefit of $2,500. And really that’s there primarily to fund the cost of the funeral or to contribute towards the cost of the funeral.
Natalia Angelini: Right, that’s a good point. In dealing with the funeral, I think this is a real interesting one, especially if you’ve maybe got a dispute between family members as to how it should happen, and potentially that may even differ with what the deceased has set out in his or her Will, and you’ve got a really interesting situation about how this deceased person is going to be put to rest.
David Smith: Well you’re right Natalia and we’ve seen situations where it’s potentially very emotionally volatile. You can have a situation where you have religion sometimes clash with the intentions of the testator. There’s one case where, the name escapes me, but Rick Bickhram of our office recently, I think a couple of weeks ago, blogged on a case where a deceased person named her boyfriend as executor. He was charged with acting as executor and intended to cremate her remains. The family, for religious reasons, opposed that and this matter ultimately went to Court and the Court decided that it was in the authority of the executor to make that decision.
Natalia Angelini: Right, and during Paul’s talk, he went through a few cases dealing with this issue and it seems to be that the consensus of the Court is that the duty of an estate trustee includes that duty to dispose of the body and that the estate trustee really has final say.
David Smith: Right, and you know that really seems to be a very settled law. Unfortunately, I think you’re still going to see cases go to litigation on this in the odd instance, not because the outcome is ever really going to be in question because the law seems so settled that the estate trustee can do what he or she wants. But I suppose if I’m a bit cynical, for settlement purposes, someone might start that litigation in the hopes of arriving at some kind of compromise. So you know, certainly that’s an issue which regrettably can result in litigation on the odd situation. But, you know, we keep repeating the same refrain which is that the executor has that responsibility. And it’s worth also mentioning I think, Natalia, that you can say whatever you want in your Will about how you would like your remains to be disposed of; the reality is that the executor does not have to follow those, does he or she?
Natalia Angelini: Absolutely. He or she does not, but interestingly though, his or her duty is to dispose of the body in a manner suitable with the estate of the deceased. So even though the estate trustee may seem to be able to do whatever he or she wants, there’s definitely going to be criticism of a trustee who just, you know, goes ahead and, for instance, has an elaborate $50,000 funeral where the deceased has a fairly modest estate.
David Smith: Right. I think generally it’s expected that the funeral will be commensurate with the size of the estate, so I think that’s a really good point. And also, there’s just a moral duty, I think, in this situation, where you’d expect the executor to do what the testator wanted.
Natalia Angelini: Right.
David Smith: It’s probably worth doing a little segway here, while we’re on this topic. I mean, this has to do now with the issue of donation of body parts. And, of course, there’s legislation in Ontario that deals with that, right Natalia?
Natalia Angelini: There is. It’s the Trillium Gift of Life Network Act and it’s an interesting piece of legislation that allows a person to consent to the donation of their own body, or body parts, upon death.
David Smith: That’s right. So we’ve all sort of seen the situation where the consent card is kept quite often with someone’s driver’s license and this is an important priority. And, of course, it plays an important role in given the success of transplant surgeries and what have you, that this is obviously an important legislative prerogative that this kind of intention can be preserved, even if it’s not contained in the Will.
Natalia Angelini: Right. And a spouse or other family members can also give their consent, even if the deceased hasn’t done so during his or her lifetime. So the difference here, I think, with the ability to dispose of the body, is that the family members seem to get priority over the wishes of the estate trustee.
David Smith: Right and it’s obviously a specific situation but it’s important to know because it’s the one significant departure from the common law rule that the executor’s decisions are paramount.
Natalia Angelini: And frankly, it makes sense to me anyway.
David Smith: Oh, absolutely. I don’t see how we can quarrel with that. So you know, harking back to our topic for the day which is the executor’s duties, again it all boils down to fiduciary duty, doesn’t it Natalia? I mean really the executor’s got to make sure that he or she does what is necessary to see the intentions of the testator preserved.
Natalia Angelini: That’s right and I think it’s important to note particularly with this issue of disposing of the body, the estate trustee has to do so in a dignified way. And so I think that’s in keeping with fulfilling his or her fiduciary duty.
David Smith: Good point. Okay, so I guess we should move on to a couple of more issues, just given our limited amount of time that’s left. And we were going to touch on children and pets, in that order. So let’s talk about children briefly speaking. It’s possible in your Will, isn’t it, to speak to guardianship?
Natalia Angelini: That’s right. Under the Children’s Law Reform Act, you can appoint someone to have custody of your child upon your death, and I think sometimes people do this, and they put this provision in their Will and I’m not sure that they’re always aware that this has some limited value.
David Smith: That’s right. The appointment is valid for 90 days but, of course, it’s important to note that if anybody else is entitled to custody and is not named in the Will, that that person obviously has a right to exercise custody and it might be pointed out that an application for custody can be commenced within that 90 day period. And so, to some extent the wishes of the guardian, with respect to their children in their Will is somewhat precatory, isn’t it, in that it’s subject to other considerations.
Natalia Angelini: That’s right, but I think it may give some assistance to the family and to the children, really, so they know I guess who they’re going to be spending time with, at least in the short-term.
David Smith: True. And I guess the important point too is, in all likelihood, the custodial parent in their Will will say that if they die, in all likelihood, they’re going to appoint the other parent as the guardian of the children. I suppose you could have a situation where there are two parents, where one parent dies and provides in his or her Will that the guardian for the children is someone other than the other parent. And obviously in that situation, the other parent is going to have something to say about that.
Natalia Angelini: Absolutely, I’ve seen that type of case and I think, unsurprisingly, the other parent proceeded with an application in the Family Court for custody and that issue was resolved that way.
David Smith: Now the last point is in keeping with our concern about issues arising immediately upon death, of course, lots of people have pets. And lots of Wills provide for pets as beneficiaries. And pets need to be fed and watered, so obviously the executor’s got to look after that.
Natalia Angelini: That’s right and like you said, that’s definitely got to happen at the get go because we don’t want pets to be neglected. And they’re usually, especially if they’re in a Will, very near and dear to the deceased’s heart. So it’s important to make those arrangements.
David Smith: Right. And that’s going to also require the executor to act quickly as you pointed out. So good point as well, and Paul, in his paper, talks about crops and perishables. If you’ve got a business that’s running fresh produce for instance, and the business owner dies, any other perishable products, obviously it’s important to keep the electricity on, to keep things refrigerated and all of those sort of important things that have to do with ensuring that any inventory of the estate does not go to waste, because ultimately, the executor is going to be accountable to the beneficiaries, right, for what happens.
Natalia Angelini: Exactly. And I think, I guess the one thing to remember is, it’s so important for the estate trustee, I suppose to know, as far in advance as possible, whether he or she is a trustee and what the assets of the estate are and what the circumstances are so they can do their best to act as quickly as possible.
David Smith: Absolutely. That’s the biggest part of good estate planning, isn’t it? And it makes the job so much easier. And we should point out, too, that if it’s just an insurmountable job for the executor to take on, maybe you renounce.
Natalia Angelini: Right, or get a, if the estate assets can justify it, get a trust company in place or instead.
David Smith: Especially if there’s a business there, yeah, so I think that’s an important point to leave our listeners with is, you know, if you’re named as executor, you’re not duty bound to take on the job at all costs. If it’s not a realistic possibility for you to carry on the task, consider renouncing.
Natalia Angelini: Absolutely. Good point, David. So, I think that brings us to the end of this week’s discussion. Thanks for listening and thanks for joining me today, David.
David Smith: It was a pleasure, Natalia. I really look forward to podcasting with you again soon.
Natalia Angelini: And we look forward to hearing from our listeners. You can send us an e-mail at hull.lawyers@gmail.com. Be sure to visit our blog at estatelaw.hullandhull.com. where you’ll find even more information and discussion on today’s practice of estate law. We hope that you enjoyed the show. I’m Natalia Angelini.
David Smith: I’m David Smith. Until next week, 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.
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