This week on Hull and Estates, Christopher Graham and Bianca La Neve review the formal requirements to make a valid Will in Ontario and the consequences of failing to adhere to the formal requirement. The relatively recent English decision of Esterhuizen v. Allied Dubar Plc [1998] 2 FLR 668 is discussed.

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

This week on Hull on Estates, Ian Hull and Suzana Popovic-Montag talk about how to manage an estate dispute as opposed to preventing it. They use an example of a joint account shared between 'Mom' and 'daughter' to examine the best way to approach posthumous problems and misunderstandings.

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

Managing Estate Issues - Hull on Estates Podcast #140

Posted on December 9^th, 2008 by Hull & Hull LLP

Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You’re listening to episode 140 of our podcast on Tuesday, December 9^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.

Suzana Popovic-Montag: Hi and welcome to another episode of Hull on Estates. I’m Suzana Popovic-Montag.

Ian Hull: And I’m Ian Hull.

Suzana Popovic-Montag: And we’re very glad to be back on Hull on Estates. Just a quick reminder to our listeners that if you’d like to be heard on Hull on Estates, you can participate by leaving us a comment, e-mail us with any thoughts you may have at hull.lawyers@gmail.com.

Ian Hull: Or please visit our blog at estatelaw.hullandhull.com.

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

Ian Hull: Terrific, thanks.

Suzana Popovic-Montag: That’s good.

Ian Hull: We thought we’d talk today about a very practical issue and that is, how to manage a problem as opposed to preventing. We spend a lot of time on Hull on Estates and on our companion podcast, Hull on Estates and Succession Planning, on talking about how to avoid problems, which is great, which we like to do and we encourage. But the reality is, problems do creep up, people don’t listen, people don’t understand, people don’t do what may be needed to be done or people simply just make an honest mistake and a problem gets created after death. So one of the illustrations we thought we’d talk about how we manage problems is in the context of a joint account. So let’s create this scenario, let’s make a very simple scenario and that is, we’ve got a dutiful daughter and a dutiful brother. One daughter, though, lives in the city with her Mom, looks after the Mom attentively, everyday and did so for 10 years. And then over the course of the 10 years, Mom wanted to give her more than her son, so she actually got some advice and did it during her lifetime. So she created joint accounts. And let’s use the illustration of a joint account with say $100,000 in it, and then another account which was not joint but was simply an outright gift. And it was smattered over the 10 years. So it happened once 8 years ago and another 6 years ago. So we’ve got these two different scenarios and the clients come to see us and they say well what can we do? And we look at the Pecori case and we sit back and we create a practical solution to that problem.

So we’ve got our first steps we would take. And the first step is that how do we prove that this is indeed a gift or a series of gifts? And secondly, how do we convince the other side? And let’s presume we’ve got a lawyer on the other side. 

Suzana Popovic-Montag: And the reason, of course, Ian, that we are concerned about how it is that we go about proving this is because as a result of the Pecori decision, we know that there is a presumption that there was not a gift being made but that the joint account would revert back to the mother’s estate in this case. And so we need to be able to demonstrate at the end of the day that this was the intention, that this was what was supposed to happen and I guess that’s where you’re sort of leading us to in terms of how we go about preventing these?

Ian Hull: Right. So, we’ve got a situation where we need to justify, because we’re acting for the dutiful daughter who got the money; we need to justify this. There are the non-litigation steps and the litigation steps. But the first non-litigation step I would typically take is to set out in a letter sort of a two-part letter. The first part is, okay, let’s acknowledge that these are the assets of the estate, these need to be administered, let’s set up a plan of action for them, and identify whatever is left in the estate; and secondly, put in the letter at the early stage full disclosure as to your position on the joint accounts. I find it’s better not to hide behind this issue as opposed to saying to the other side here is the estate assets, there’s $10 left, and the rest flowed outside of the estate and I’m not going to tell you about it. I find that early detection and early acceptance of the fact that you’re going to have potential conflict there is somehow best managed by setting out with particularity what the joint assets are or what assets you say flow outside of the estate.

Suzana Popovic-Montag: And we know, certainly from our experience, that a lot of people are hesitant to do that but the reality is if they don’t do it, they create an aura of mistrust right from the get go and its very, very hard to overcome that no matter how much you start disclosing afterwards.

Ian Hull: Absolutely. And I say to my clients look, be proud of the gift, don’t be ashamed of it. And if you’re ashamed of it, then you have something to hide.

Suzana Popovic-Montag: That’s a really good thought, Ian, and that’s a really good mindset because many times people are apologetic and they’re on the defensive already without anyone even making it necessarily an issue and so to think positive and work forward I think is great advice.

Ian Hull: Because after all, it is usually in the circumstances, it is clearly the intention of the mother to have gifted that money. And it wasn’t intended to be shared and you know, you want to be able to show the other side quickly and efficiently. Now that may not solve the problem, but if we start with that attitude and we start with the attitude of full disclosure, let’s talk a little bit about what that opening letter or that opening discussion with the other side might include.

And the first thing I like to include in it is the date the account was established. So I particularize that, I will get back-up if necessary. But I like to try to identify the date it’s established.   The second thing I like to do is I sit back and I say well look, if I’m on the other side of this, what is going to really bother me is the source of this money. Because this is, at this point in time with mother now dead, money that people will perceive to be family money, it’s part of the family. So with some particularity, I like to create the source of the money. If it’s just come out of a GIC that Mom rolled into you, or if it came out of the sale of the proceeds of the cottage or something like that, identify where it came from. Again, setting the tone for how the specific, exclusive account is set up. And I try to describe these as exclusive accounts as opposed to joint accounts, because once she’s dead, it’s no longer joint. It’s exclusive, it was exclusive during their lifetime and it is exclusive now. And when I say exclusive, of course, during the lifetime it was shared between the two as joint tenants but it was exclusive in the sense that no other family member had access to it or used that money. 

Now, another demonstration of how I like to set out early on some of my protection to the joint account case is I like to set out and say to my client, alright, how was the money indeed used during the lifetime? And in our earlier illustration, we talked about a joint account that was set up 8 years ago and then one that was set up 6 years ago. And just for the purposes of illustration, let’s say the 8 year ago one wasn’t joint, it was simply a gift because the daughter had taken her mother through a very tough time, she’d just had hip surgery and daughter basically quit her job and spent 6 months with Mom to rehabilitate. So Mom was at that point, 8 years ago, said geez, you know, I just want to give you something for this. I know you’ve lost a lot of salary and money and so here’s a $100,000. And it comes out of a GIC, goes into daughter’s name exclusively and then how does the daughter use that money during her lifetime is an important question, because the judge will want to know, and its an important thing to disclose early, and especially if the money was used exclusively for the daughter. For example, in that 8 year old account, the daughter used the money to send her kid to private school. And now there is only $30,000 left and the other child wants to split the $30,000 of course, but the daughter is saying well, first of all, it was set up a long time ago; second of all, I used it as though it was my own; third of all, I never even talked to Mom how I used it. I used it to my exclusive benefit. So its treated like a gift in that sense.

Suzana Popovic-Montag: So you’re suggesting, Ian, that its very different from a situation where the money would be used somehow for mother’s benefit going forward and the idea there being that of course it was always intended to be hers, it was just in someone else’s hands as trustee or whatever you want to describe the relationship.

Ian Hull: Absolutely. So the second illustration is more problematic. And that’s the joint account where it is set up with daughter and mother, with joint right of survivorship. And typically the bank document is all that has been established. We always tell people to do more but let’s say they haven’t. Again, it seems to me that two threshold questions are: source of the money, when it was opened, and then describe how the money was used. And if it was used exclusively for mother, or if it was used in part for Mom and part for daughter, I don’t know; depends on your facts and your circumstances. But if you can take those three steps along the way to establish your core position, the other side…I’m not saying people fold their tent, but the other side has to seriously consider whether or not they are going to pursue this because it’s sounding very gift-like.

Suzana Popovic-Montag: Now, Ian, from your experience, would you say that the inter vivos gifting tends to be easier to prove than the joint account gifting? Or not?

Ian Hull: I think its slightly easier, yeah, I think because you put it in your name alone, that helps. But, you know, I still think at the end of the day, its so much depends on how much, well without a note or some additional evidence, so much depends on what the intention was of the parties. And part, you really only have, because you aren’t typically planning for this fight, all you have to show the other side is how the money was used. And if it was just sitting there accumulating interest, never touched, that’s okay too, if you have a reason. And then your reason might be look, I took it, Mom gave it to me and I saw that as my retirement savings.

Suzana Popovic-Montag: Right.

Ian Hull: I don’t know, you always have separate facts and stuff. So anyway, I think that that’s just an illustration of how we like to sit down and begin the problem-solving process as opposed to the other end of the day when we would love to see all of the problems solved before they get to us, but that’s not always the case.

So there’s that three-part step: identify the source of the asset, second of all identify when the account was established, and third of all, identify how the money was used during lifetime, and it may go a long way to either resolving or at least crystallizing the issues quickly.

Suzana Popovic-Montag: Well I think that, Ian, brings us to a wrap for this week’s discussion. Thanks to everyone for listening and thank you, Ian, for joining me today.

Ian Hull: Thanks very much, Suzana.

Suzana Popovic-Montag: Just a quick reminder, of course, please feel free to send us an e-mail at hull.lawyers@gmail.com or visit our blog at estatelaw.hullandhull.com. Thanks very much.

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.

/mem

This week on Hull on Estates, Rodney Hull and Jonathan Morse discuss the case of Rose v. Rose [which can be found at 24ETR(3D)217 or 81OR(3D)349]. The case is valuable and instructive as it  raises questions about rectification, rescission and removal of the trustees.

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

Rose v. Rose - Hull on Estates Podcast #139

Posted on December 2^nd, 2008 by Hull & Hull LLP

Jonathan Morse: Hello and welcome to Hull on Estates. You’re listening to episode 139 on Tuesday, December 2^nd, 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.

Rodney Hull: Hi and welcome to another episode of Hull on Estates. I’d Rodney Hull.

Jonathan Morse: And I’m Jonathan Morse.

Rodney Hull: If you want to be heard on Hull 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.

Jonathan Morse: Thank you for that, Rodney. Today I thought, with your agreement, that we would discuss a case which is called Rose and Rose. And it’s a decision of the Ontario Superior Court of Justice. It’s 24 E.T.R. (3d) 217. Also found at 81 O.R. (3d) 349. And I might just spend a moment introducing the facts of this case. The decision was by Justice Lissaman. The decision was made August 2, 2005. Sorry, the judge was June 19, 2006. It was heard August 2, 2005 as well as March 6 and 7, 2006.

And in this case, it deals with a trust that was established. A cottage property was put in a trust in 1992 and at the time, there were two children who were the beneficiaries of the trust. The children were age 7 and 9. And at the time the trust was created, the relationship between the husband and wife was friendly. And unfortunately, as matters progressed, the relationship, the marriage broke down and, of course, the trust issue arose. And we both had a chance to speak about this, and I thought I might ask your thoughts, Rodney, on the value of this case.

Rodney Hull: Well I think this is a very valuable case, from a standpoint of lawyers practising in the trusts and estates field because it deals with the subjects of rectification, rescission, removal of trustees and just some general principles of interpretation. Its descriptive, it’s incisive and it’s well written, this judgment, and very educational, in my view. Written in plain terms and readily understandable.

Jonathan Morse: If you would, Rodney, would you just maybe speak about the rectification aspect of the case to start us off.

Rodney Hull: Well the questions raised by, in rectification, rescission and removal of the trustee are dealt with by the trial judge. And he finds that none of these particular forms of relief are available in the circumstances because the law simply does not go far enough to permit it in this particular case. And where he does linger for the most part is on the question as to whether or not he can use, occupy and enjoy the property during his lifetime or during the period of the trust. And some general principles of interpretation are dealt with. The unfortunate part was that the trust deed did not deal with use, occupation and enjoyment, nor does there appear to be any consideration given to a right to occupy and enjoy. The question, of course, raised is if it had been raised by the estate planner, it seems to me that it would just call on bidden to the lips the response well, don’t worry, the children will let me on the property any time I want, so we don’t have to provide it. And it might as well have had some adverse tax consequences upon a reading of Section 105 of the Income Tax Act of Canada, had it been specifically included as a provision in the agreement, perhaps as a benefit or some other right to enjoy, which had a value.

Jonathan Morse: And just on that point, Rodney, if I may. I understand on the facts that there was a disagreement between the husband and wife as to the purpose of the trust and the husband’s view was that it was motivated for tax reasons.

Rodney Hull: Yes.

Jonathan Morse: But the wife, her view was that the trust was established essentially to give the property to the two children. So I guess the intention of the parties, they had a disagreement as to their intention and that affected, played into whether there could be any rectification, is that right?

Rodney Hull: Well, I think so. And I can say this that the tenor of the relationship between the father and his daughters and the father and the mother were such that the judge held that they simply couldn’t co-exist on the same property and accordingly, he had to meet the question of use and occupation and enjoyment on general principles of interpretation. And he simply wasn’t able to come to the conclusion that there was a use, occupation and enjoyment right in the father who had given the property to the children. I have to say that it’s an extremely difficult decision for the trial judge by reason of the fact that the feelings were so bad that he had to consider that probably as the most important consideration to be dealt with in making the determinations.

Jonathan Morse: And one further question, if I may. Clearly the trust document, the deed of trust, it could have addressed this issue of use, is that correct?

Rodney Hull: Yes it could have.

Jonathan Morse: And because it didn’t, there was no room to interpret that the husband, the settlor had any right to use the property.

Rodney Hull: That is so. I think the judge based his decision on the fact that he could not act on surmise or guesswork. And in this case, he simply had to deal head-on with the general principle of interpretation that I set out earlier in this discussion.

Jonathan Morse: And just one other, a few other issues come up but we are running out of time. On the conflict issue, I think the judge held simply that the husband could not continue to act as a trustee when he had a personal interest in the use of the property but also had a role as a trustee. And therefore had to step down as trustee.

Rodney Hull: Well I think the trial judge was faced with the plain and simple fact that the children and the father were not able to get along together and how can a trust be properly administered by a trustee when such bad feelings arise between them? And there’s lots of authority for that proposition and I think the judge came to the correct conclusion in removing the father as a trustee in the circumstances. However, I note that I had the general feeling that the trial judge really wanted to help the husband in some way but was unable to do so. But I noted that the costs on the highest level were awarded out of the assets of the trust. And I think that would fortify my feeling that the judge felt very uncomfortable in disposing of the matter to the detriment of the husband.

Jonathan Morse: Well I think we’ve discussed a few different aspects of this case and as I understand, it’s quite an important case in this area. I think that brings us to the end of this week’s discussion. Thanks for listening and thanks for joining me and Rodney today. It was a pleasure to be able to work with you, Rodney, on this podcast. And I look forward to podcasting with you again soon.

Rodney Hull: The pleasure is mine. Thank you.

Jonathan Morse: 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 practise of estate law. We hope that you enjoyed the show. I’m Jonathan Morse.

Rodney Hull: And I’m Rodney Hull. 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.

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.

/mem

This week on Hull on Estates, Ian Hull and Suzana Popovic-Montag discuss innovative techniques that add value to doing a will and powers of attorney. Specifically they discuss the concept of ethical wills and how they are different from a traditional will.  

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

The Concept of Ethical Wills - Hull on Estates Podcast #138

Posted on November 25^th, 2008 by Hull & Hull LLP

Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You’re listening to episode 138 of our podcast on Tuesday, November 25^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.

Ian Hull: Hi this is Ian Hull.

Suzana Popovic-Montag: And Suzana Popovic-Montag.

Ian Hull: And welcome to another episode of Hull on Estates. If you want to give us some comments, please do so at our e-mail address at hull.lawyers@gmail.com.

Suzana Popovic-Montag: Or, of course, you can visit our blog at estatelaw.hullandhull.com.

How are you today, Ian?

Ian Hull: I’m terrific, Suzana.

Suzana Popovic-Montag: That’s great.

Ian Hull: We have been talking in the past few months about different ways to work with our clients on estate planning. One of the things that we’ve noticed is that there are some really innovative techniques that are out there that really add some value to the process of not just the classic scenario where someone comes in and offers, you know, as a lawyer, you offer your services to do a Will and Powers of Attorney. But we’ve got some other ideas that we wanted to sort of banty around today.

Suzana Popovic-Montag: And one of those in particular that I find quite interesting is the concept of ethical Wills. And what an ethical Will is, as opposed to a traditional Will, is an interesting distinction because traditionally with a Will, what people will do is they’ll say this is what I have and this is who I want it to go to. The idea of an ethical Will, however, is that you are leaving behind a legacy of what you want people to know.

Ian Hull: And, you know, it really seems to us anyway, it adds some value to the whole estate planning process, isn’t a tremendous cost to the clients but helps get us to the point where we like to tell our clients and that is, is that don’t just leave a financial legacy, which of course will be well received by the beneficiaries. But leave an emotional legacy. And the concept of ethical Wills is not new to society generally. In biblical times, there were obviously techniques used in the Bible where different players in the process would leave messages for their families and guideposts of their families in terms of how to live and how to consider their lives. But in terms of a modern approach, one classic example of an ethical Will-like thing to do is to write your memoirs. I noticed recently Ted Rogers, the famous Ted Rogers, has published his own autobiography. And in it, he talks about a lot of things but it’s got to be a wonderful document just alone for his family to have, really his thoughts and his views on life and some of his experiences in life. So that’s one wonderful thing for his family. I know he didn’t write the book just for his family. He’s left his own ethical Will for all of us. I noticed an interesting point where in the book he talks about, you know, he’s asked who his idol in life is and he unhesitatingly says it was his father, who interestingly enough died when Ted Rogers was 5 years of age, his dad died when he was 38 years old. So one of the sort of dying wishes that appears from the book that Ted wanted to pursue was his buying back of CFRB from the family that apparently took it from under Ted’s father.

But the point is, is that it was a neat illustration to me anyway, of what would be a voluminous ethical Will.

Suzana Popovic-Montag: That’s a nice story, actually and it sort of underscores, as you say, a modern approach to this idea of an ethical Will, or I know in other jurisdictions they call it letters of wishes, or letters of intention, something like that. In terms of another example, one that sort of we’re classically faced with a situation where we’ve got a Will that will create a trust arrangement within it for perhaps the minor children. And it will have staggered payouts at let’s say 21 years of age, at 25 years of age and then at 30 years of age, the full capital and any accumulated interest gets paid out. And what people are doing in these situations is including when there’s an encroachment on capital or a payout on the capital, with the money that’s being paid to the beneficiary, trustees are also providing them with letters of wishes or letters of intention that were created by the settlor and passed down at these points in time to send along messages to the beneficiaries that weren’t said perhaps during a lifetime, or were being reinforced after death as well.

Ian Hull: And what’s an example of…so obviously we do our Wills now and we don’t know when we’re going to die. But in situations where we have clients that are unfortunately very gravely ill, how would that ethical Will, sort of letter of wishes, unfold?

Suzana Popovic-Montag: Well it’s something that is typically left with a trustee so that when a Will is provided to the beneficiaries or read to the beneficiaries, it’s something that’s found at the same time perhaps, or it could be somewhere else.

Ian Hull: So an example might be a young professional who may be faced with, your client might be faced with knowing that he or she is going to pass away soon and they want to make sure that these notes trickle out and maybe as you say tie into the distribution stages. They may also want to just have them trickle out at different times. I mean a classic example would be if you had young kids and you knew you had terminal cancer, you might say well look, here’s three sets of notes. One set I want to go to each of my kids when they turn 16; another set when they turn, I don’t know, 21 when the money comes out; and maybe another set of notes that come out when they get married or a significant turning point in their life. So there is a tangible way of doing this, you don’t have to be Ted Rogers to put this proposition to your clients. There’s a really tangible way of adding some wonderful sort of value to your legacy.

Now let’s just spend a minute here now just talking, a minute or two talking about what types of topics we might want to cover in the context of an ethical Will. And you know, maybe in this podcast or another one, we can talk about some specific examples. But we’ve told you some illustrations but what kind of topic headings would one want to consider putting in the ethical Will as opposed to writing a book like Ted Rogers did?

Suzana Popovic-Montag: Well the first one that comes to mind, Ian, is sort of a situation where you want to express love and care for family members or loved ones after the fact. Perhaps you’ve done it during lifetime or you’re doing it differently afterwards. And so that’s one of the examples that quickly comes to mind.

Ian Hull: So another thing that some of the examples that we’ve seen of the ethical Wills have been where someone wants to set out their statement of beliefs.

Suzana Popovic-Montag: And so religious icons or religious thoughts that are important to you are being transferred by way of these kinds of letters perhaps, attitudes towards death, attitudes towards life, values that you might hold dear to you or feelings that you’d like to express. Even something as sort of paternalistic or maternalistic as you know, how life should be lived by that individual could also be encapsulated in these kinds of Wills.

Ian Hull: And these moments of sort of documenting your views, its not just sort of flaky stuff. It can also become an important tool to guide the beneficiaries as they go through life, when they are enjoying maybe benefits from a trust or something like that as well. And, you know, a lot of Wills will deal with gratitude. They’ll say I give a gift of so and so to my caring, attendant caregiver or something like that. But these ethical Wills can also flush out gratitude comments even further and really spell out how the individual feels about someone who has played a special part in their lives.

Suzana Popovic-Montag: And similarly, if heritage is something that’s particularly important to someone, they could take that opportunity to also address that in this ethical Will or letter of intention as well.

Ian Hull: Alright, so why don’t we speak about some questions that you might want to consider to answer in your ethical Will. We’ve talked about the general concepts. Some specific questions we might ask ourselves if we’re going to do an ethical Will. And what we might want to put in it.

Suzana Popovic-Montag: Questions, Ian, I think would help sort of people formulate these kinds of Wills is things like who do you love that you haven’t told during your lifetime?

Ian Hull: And what, if you do take it that next question, like a good illustration was the Ted Rogers’ one, where who is the most influential person in your life?

Suzana Popovic-Montag: How about something like, who has taught you the most in your life?

Ian Hull: And just as a further to that, if we want to talk about who’s taught you the most in life, what was the lesson that they shared?

Suzana Popovic-Montag: Another one that sort of pops into mind is, you know, what would you have done differently in your life?

Ian Hull: That’s a great question. One that comes out of Ted Rogers’ book that I saw was interesting is that there was a real discussion on his part about what was his greatest accomplishment. And in his example, it was accomplishments, plural, but it’s a neat question to ask yourself and maybe put some comment down for your beneficiaries and your family to read later in life.

Suzana Popovic-Montag: From a religious perspective, you know, the question of is there anything that you need to confess before you die? And if so, what is it?

Ian Hull: Alright, so we’ve covered off sort of the gambit of both secular and religious questions you may want to consider. We think that this is an interesting proposition to put to clients. We know, from our practice in the contentious world, that it is a very useful tool, a wonderful legacy to leave for people. Sometimes not so wonderful if its in the negative, but most of the time its positive and well-received.

So as a drafting solicitor, its something else to consider in your arsenal of putting it to your client and allowing them to leave an expression, a little more plain English than the expression that is set out in a boilerplate Will.

Suzana Popovic-Montag: And with that, Ian, I think that brings us to the end of this week’s podcast. Thank you very much to everyone who is listening.  And thank you, Ian, for joining me today.

Ian Hull: It’s a pleasure and look forward to doing our next podcast. Again, please feel free to visit our blog at estatelaw.hullandhull.com where you’ll find more information and discussion about the ethical Will and our practice of law.

Suzana Popovic-Montag: Thanks very much, Ian.

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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This week on Hull on Estates, Craig Vander Zee and Bianca La Neve talk about offers to settle in the context of a will challenge. They explain the difference between a will challenge and civil litigation and discuss several examples of will challenge cases.

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

Offers to Settle in the Context of a Will Challenge – Hull on Estates Podcast #137

Posted on November 18^th, 2008 by Hull & Hull LLP

Bianca La Neve: Hello and welcome to Hull on Estates. You’re listening to episode number 137 on Tuesday, November 18, 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.

Bianca La Neve: Hi and welcome to another episode of Hull on Estates. I’m Bianca La Neve.

Craig Vander Zee: And I’m Craig Vander Zee. And today I think, Bianca, we were going to talk about Offers to Settle in the context of a Will challenge. But first of all, how are you?

Bianca La Neve: I’m great, how are you?

Craig Vander Zee: Not too bad, did you have a nice weekend?

Bianca La Neve: I did, we celebrated our 5 year anniversary this past weekend.

Craig Vander Zee: Congratulations, but there’s many more to go.

Bianca La Neve: Yes, that’s what everyone keeps telling me.

Craig Vander Zee: What is the fifth anniversary? Is that a paper…?

Bianca La Neve: I don’t know and I know I didn’t get any jewellery so…

Craig Vander Zee: Well I guess that’s the tenth year anniversary, isn’t it? 

But back to the Offers to Settle. The starting point for all of this is to recognize that Will challenges, by their nature and the function of the Court with a Will challenge, is different than in civil litigation. In civil litigation, it’s maybe A Co. against, A company that is against B company, there’s a winner, there’s a loser, the Court determines and then you have cost consequences that follow. And in the context of having made Offers to Settle, those cost consequences that may follow an award usually may be affected by the Offers, depending on if the Offers are more favourable than what the result was achieved at trial.

In the Will context, of course, it is the Court that is granting the validity of the Will. And in that case, as the Will, you know, is applicable to the world at large, or in rem as it is, the Court does have a function here. Having said all of that, there is a case in Ulinick that is very often quoted that considered this very issue.

Bianca La Neve: For background purposes, the facts of the case are as follows: the deceased had executed a Will in approximately 1979 and at the time, the deceased had been in and out of hospital and had actually undergone major surgery. One of the deceased’s children ultimately challenged the Will, asserting lack of capacity and undue influence by his sibling, who was the sole beneficiary of the deceased’s estate. There were two competing opinions from medical experts as to the testator’s capacity during the time of the Will, but ultimately Justice Sheard dismissed the Will challenge.

Craig Vander Zee: And in that regard, or perhaps more specifically, Justice Sheard found that with respect to the lack of testamentary capacity, that that allegation had been justified, that is, that it was reasonable to make in the circumstances because there was actually two expert neurologists who gave competing evidence at the trial. And as such, he found on that issue while ultimately he dismissed that issue, he found that it was justifiable to bring it up. And on that issue, he then found with respect to costs that the unsuccessful party shouldn’t have to pay the costs of the successful party. It’s interesting to note, though, that with respect to the assertion of undue influence, that there wasn’t any justification according to Justice Sheard for bringing that allegation. So with respect to that allegation, Justice Sheard found that whatever the cost of the proceedings were that could be reasonably demonstrated to have resulted from that allegation, were going to be on the shoulders of the unsuccessful litigant here. And that is interesting because it wasn’t a case where Justice Sheard found that costs are payable out of the estate regardless of success, and considered even the separate allegations in terms of warding off the requirement to pay costs was going to be dealt with. On the issue of Offers to Settle, though, Justice Sheard found that the offer made on the eve of trial didn’t factor into his consideration on costs. And so in that respect, actually, His Honour found that the Offer to Settle didn’t have effect.

Bianca La Neve: But Craig, other cases in Will Challenges have considered Offers to Settle.

Craig Vander Zee: And that’s right. And perhaps before touching on some of those cases, and we’ll probably just mention them by name given the time today, but I think it is helpful to consider the traditional approach to costs and the modern approach to costs when it comes to awards in Will challenges because it does seem to signify a change in the way at least the Court intends to look at how costs are going to be applied.

Bianca La Neve: For many, many years, in most Will challenge cases, the Courts would order all or most of the costs of the parties to be paid out of the estate. Not only was the Court disinclined to require the unsuccessful party to pay the costs of the successful party, it would also direct that the unsuccessful party be partially or even wholly indemnified by the estate.

Craig Vander Zee: Well, and that meant that the traditional approach to the award of costs in a Will challenge really was a departure from the usual rule in civil litigation, which is to award costs following the event. But while I completely agree with your comment, Bianca, that in many, many cases, for many, many years, it seemed that there was almost an impunity with respect to cost consequences in dealing with Will challenges for the unsuccessful litigant, that that’s not really what the traditional approach stood for. And the traditional approach derived from a case called Mitchell and Garde which is a case from 1863. And not really wanting to go through it, it really boiled down to two principles or policy reasons for an order for costs that would guide how the Courts should look at it. And it was basically this: that the usual rule that costs follow the event will not apply where firstly, the testator or those interested in the estate have been the cause of the litigation; and secondly, where the circumstances reasonably lead to an investigation of the Will itself. 

So in the first scenario, it’s where the testator has drafted a Will which would lead one, or has done it in circumstances which would lead one, to challenge it, so where the cause of the litigation is the testator or, again, those interested in the estate. And then the second one is where there is a reasonable basis to have an investigation in respect of the document being propounded. In those scenarios, costs will not follow the event. But that became, over the years, interpreted by at least many judges to mean that there was impunity in bringing Will challenges. In the modern approach, that was more spelled out in a very directed way by the Court of Appeal in its 2005 decision of McDougall Estate and Gooderham.

Bianca La Neve: So in that case, the Court of Appeal found that the traditional approach had been displaced. The modern approach to fixing costs is to carefully scrutinize the litigation, so the Will challenge, and unless the Court finds that one or more of the public policy considerations set out by Craig applies, then a Court should follow the cost rules that apply in regular civil litigation.

Craig Vander Zee: And the Court went on to say, the modern approach to awarding costs at first instance, and again this is in a Will challenge, recognizes the importance of the Courts and the role that they play in ensuring that only valid Wills are executed by competent testators. It also recognizes, though, and this is where it is set out I think expressly now, and clarified, that the need to restrict unwarranted litigation and protect estates from being depleted by litigation, is going to be front and centre. And indeed, the Court of Appeal went on to say gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation. So from that perspective, the Court hasn’t said that in the appropriate circumstances, at least in my view, that an unsuccessful litigant in a Will challenge won’t get their costs or there won’t be the cost consequences that follow the event. But if they find that the public policy reasons that I mentioned before or the basis I mentioned before are not fittingly applied to the situation, then civil litigation rules are going to apply. And what that really is instructive as well is in respect of Offers to Settle because that would also mean that in the case where the public policy reasons are not affecting cost consequences and civil litigation rules apply with respect to costs consequences, that Offers should have that effect. Offers to Settle have been, in a number of cases, considered by Courts in Will challenges. But here it opens the door for a Rule 49 Offer to be more consistently applied because the Courts in the past have differed in their approach to Rule 49 Offers.

Bianca La Neve: So Craig, you mentioned earlier we would go through some of the cases. And in Barone Estate, without going into the facts, in the end the judge found that there was no incompatibility in applying Rule 49 and traditional non-estate cost principles to Will challenge proceedings.

Craig Vander Zee: Well, that’s right and that was a 1997 case. But then in a case the next year, the following year, Justice Haley found in Schwitzer and Pezecki that Rule 49 didn’t apply to estate proceedings. But with respect to the applicability of 49, it really doesn’t end there. And again, Rule 49 is the rule that specifically sets out, Rule 49.10, specifically sets out cost consequences when an Offer is made and is more favourable than the judgment that’s obtained, vis-à-vis the opposing party. In a case called Kerner and Fiorelli which was a case back in 1990, so 8 years before Justice Haley’s decision, the Court found that Rule 49 could not be ignored. So the case law regarding the applicability of Rule 49.10 seemed to have been unsettled. But it seems to me that the decision in Gooderham opens the door for that applicability of Rule 49 in the appropriate circumstances.

Bianca La Neve: So I think that’s a good place to wrap up today, Craig. If any of our listeners want to leave a comment, they may e-mail us at hull.lawyers@gmail.com or you can visit our blog at www.estatelaw.hullandhull.com. Thanks.

Craig Vander Zee: Thanks very much, Bianca, it’s always a pleasure.

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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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.

Feel free to send us an email at hull.lawyers@gmail.com or leave us a comment on the Hull on Estates blog.

Posted on November 4^th, 2008 by Hull & Hull LLP

Natalia Angelini: Hello and welcome to Hull on Estates. You’re listening to Episode #135 on Tuesday, November 4^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.

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.

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.

/mem

It has been well reported that Ledger last made a Will in 2003, before the birth of his daughter Matilda (in 2005) and before his claim to fame.  Under the 2003 Will, Ledger left all of his possessions to his parents and sister.  He subsequently stared in several hit films which vastly increased the size of his net value.  Subsequent to his passing, the question that was considered was what would happen to Matilda, as she was not provided for in the 2003 Will?   

There had been discussion that Matilda's mother would likely commence a claim on Ledger's estate, which could have tied up the Estate in litigation for years. However, now it is widely reported that Ledger's entire estate will all go to two year old Matilda (click here for the report).  

Estate planning is like doing our taxes.  No one wants to do them, but Ledger's story teaches us an important lesson.  It reminds us of the uncertainty of death and the consequential need to ensure that our estate plans are updated to protect those that we care for.  

Rick Bickhram

 

Or, listen to Will Challenge Litigation - Part 6 by clicking here.

This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on the Will Challenge Process, step by step.

They pick up where they left off last week by addressing undue influence. What is undue influence and how do we prove it? Next week they will continue their discussion on the different grounds upon which a will can be challenged.

If you have any comments, send us an email at hullandhull@gmail.com or call us on the comment line at 206-457-1985 or leave a comment on our blog.

Will Challenge Litigation Part 6 - Hull on Estate and Succession Planning - Podcast #131

Posted on September 23, 2008 by Hull & Hull LLP

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, here are Ian and Suzana.

Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #131 of our podcast on Tuesday, September 23^rd, 2008. Hi there, Ian.

Ian Hull:  Hi, Suzana. How are you doing today?

Suzana Popovic-Montag: I’m well thank you, how are you?

Ian Hull: Just terrific. We are thinking through this Will challenge process and we’re trying to hopefully take it beyond the typical Will challenge and talk about some sophisticated steps that are often involved, (a) because they’re good, they’re helpful hopefully, for people who want to get into these Will challenges, but (b) it’s helpful to know what you get yourself into. And this is part of it. We talked about in our last podcast getting a retrospective opinion. This is not uncommon, but it’s also a very expensive process. You have to pick the right expert, you have to make sure the report is clear and concise in a way that a judge is going to receive it well, because judges are people, too. They don’t want to see a 20 page report full of esoteric medical terms that nobody can follow. So there’s a strategy within the strategy of bringing that on. 

Let’s talk now about how we deal with the question of undue influence because we described in our last podcast what undue influence was, and that is coercion, and that is the arm-twisting. So, let’s talk a little bit about what do we mean by that and, more importantly, how do we prove it?

Suzana Popovic-Montag: And really, the allegation of undue influence is that the testator, at the time that he or she created their Will, was not doing it on their own free volition.  And so as Ian classically describes it as this arm-twisting, the judges call it that in a lot of cases as well. And the idea there is that someone has influenced you to do something that you would not otherwise have wanted to, or at least not to that extent. So maybe yes, you did want to provide for little Johnny but not to the extent of your full estate, and to the exclusion of your daughter Betty. So that’s the kind of idea when we say undue influence.  Certainly there’s a level of influence that we all have on our family members. The question is, when is that influence undue in the sense that it could compromise your capacity to make a valid Will. 

Ian Hull: And the classic example in the case law of what is undue is, when you sit across the table from your mother and you say, if you don’t do what I say, I’m going to put you in a nursing home. That’s a graphic and obviously, hopefully, never said illustration, but in our world we do see it and we see that it’s being alleged to have been said, and that’s a classic undue influence. The thing that really we’re troubled with, with undue influence is that the nature of the claims and the allegations are typically so volatile, they’re so, some people say, mean-spirited because if you’re going to unduly influence you have probably behaved very badly.  And so one side of the case is going to say you behaved very badly and spell it out, so it looks like allegations of egregious behaviour, and the other side is going to have a complete opposite.  So just the nature of the evidence itself turns this litigation into volatile, typically aggressive, litigation in and of itself. So that’s an important strategy point that we always like to walk through our clients as saying, you go down that road of alleging undue influence, you create a new environment and sometimes a very distasteful litigation environment. So,

Suzana Popovic-Montag: And I was going to say, Ian, and it’s very hard to go back. Once you’ve done that, you’ve sort of crossed the line, it’s very hard to take that back. When you’re dealing with family members, you’re dealing with loved ones, these are really nasty allegations many times. They don’t necessarily have to be, but most of the times we see that they are. And so it becomes a he-said, she-said situation. And by virtue of the allegation itself that someone was unduly influenced, one of the biggest concerns or one of the biggest issues that we face as lawyers, is getting proof of that undue influence.

Ian Hull: Absolutely, and that’s really, so first of all, we don’t like to go down that road because you’re going to have to say some very nasty things or defend very nasty things, and you’re going to create a volatile litigation environment. But the second point is exactly what Suzana has said, and that is that we’re stuck with the legal parameters. I mean the concept of undue influence has been around for hundreds of years. We’re stuck with the legal parameters and the two points within that category are this: one is, is that to allege undue influence is a very tough case to meet. The Courts have said it is the highest of expectation to prove that there was undue influence. The second component is the source of the undue influence has to come, and I may be overstating it, but basically has to come from third party non-participant evidence.  And what do we mean by that?

Suzana Popovic-Montag: Well, Ian, what we are suggesting there is that when you make an allegation of undue influence, then your evidence in support of that will be viewed, if it’s directly your evidence, probably by a judge, as self-serving evidence. Well, of course you’re going to say that you saw this or that this happened or that that happened, because that helps your case. But if you want to add credence to your allegations, you’ve got to have the evidence of someone else, someone who’s not vested in the process or the result of the process, who’s going to say yes, I saw that kind of behaviour being exhibited, I saw these threats being made to the testator, I know that this is what actually happened.

Ian Hull: And a classic example to follow through with that is, we talked about the son sitting across the table from mom saying, you do what I say or I move you into an old folks’ home or a nursing home.  That threat is seen by the next-door neighbour who happens to be over at the house helping out this nice elderly individual.  And that neighbour has no vested interest, is a third party source and is someone that, what we call, corroborates the evidence. And so we remember that we’ve got very difficult expectations. The Courts, undue influence is akin to fraud. It’s like you say that, you’re basically alleging fraud.  So the Courts say there’s a very high standard on those who want to pursue that claim.  Part of that high standard is that you need corroborative evidence and in that component, the third component is Suzana, what are we getting at when we say corroborative evidence and why does that matter in estate matters?

Suzana Popovic-Montag: Well corroborative evidence, of course Ian, is evidence that’s going to prove additional evidence that you have, so the allegations that have been made in support of the fact that someone was unduly influenced. And one of the key things with this type of evidence, of course, is that if you are in fact, an undue influencer, you’re probably smart enough not to be doing it in front of others.  So that you don’t have these third party witnesses or individuals who overhear these threats being made, don’t see this kind of behaviour being exhibited and so it’s very difficult, we tend to find in these situations, to come up with this corroborative, this additional evidence in support of the allegation. 

Ian Hull: Absolutely. And because it’s so difficult though, it’s also a non-starter if you don’t have it in many cases. And that’s because the Courts have sat back and said, if you’re going to allege that certain things were said by someone who is now dead, you have to source that beyond your own evidence. You have to buff that up. You can’t just say that, you can’t speak for the dead so to speak.  And that is really, which is a great old common law tradition, and evidentiary expectation, that you corroborate.  When you’re going to put words in the mouth of a dead person, you have to corroborate it.

So, that’s really, I think, the core spin in terms of the evidence and in terms of the expectations of the Courts with undue influence.  But the last point I was going to say in terms of the process here, and these are, as we talk about these legal issues and we’re going to move on to some of the other ones briefly after this, is that really, typically, an estate challenge, a Will challenge, you’re going to look to lack of testamentary capacity and you’re going to look to undue influence. And at the outset, almost always you’re going to allege both or both are going to be alleged against you. But the trick is, and the strategy is, is when do you let go? And do you let go, I mean we talked about it for cost consequences, but with undue influence, you want to, I tell our clients, we have to monitor that issue on a regular, regular basis.  Because there’s always the chance if you let go, you’re not going to get stung like a bee by having alleged it. Because it’s not such a terrible thing to suggest because it’s one of the four or five cornerstone issues in a Will challenge.

Suzana Popovic-Montag: And I guess, Ian, just in terms of winding up, just one thing I think we should make mention of the fact is that even though there are these traditional five grounds of challenging a Will, not all five have to be present in every case.  And in most cases they’re not.  And you may just have a Will challenge based simply on undue influence or simply on lack of testamentary capacity or a Will not having been properly executed. So these are not things that have to be found altogether, they’re mutually exclusive.  They can, however, be joined in a claim for a challenge to a Will.

Ian Hull: So if we’re ready, from a strategy standpoint, we want to maybe put one, two, three or four out on the table, but also be mindful of the fact that, while you may have a right to investigate those circumstances, you may not want to hang on to that allegation forever. 

So, I think from that standpoint, before we cover off one of the last issues, and that is the question of undue, I mean the lack of due execution and then some of the corporate machinations in a corporate context of how these Will challenges go, I just want to say that, my last comment is on the question of fraud.  As we said before, it really is not worthy of a ton of discussion. It’s just not typically alleged.  But in our next podcast, we’ll start with that issue just because of the one rare occasion when it’s alleged, it can be dealt with on a very, fairly pinpointed and sophisticated basis which we’re going to talk a little bit about in our next podcast, and that’s when we have forged Wills. So thank you very much, Suzana.

Suzana Popovic-Montag: Thanks to you, too, Ian. And to all of you who are listening and watching us by video podcast, a quick reminder that if you have any comments and you’d like to share them with us, we’d certainly appreciate them. Feel free to call us at 206-457-1985.

Ian Hull: And of course, e-mail at hullandhull@gmail.com.

Suzana Popovic-Montag: Thanks, 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 any questions or comments, please visit our website at hullestatemediation.com.

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

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.