Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to The Freezing of the Assets

This week on Hull on Estate and Succession Planning Ian and Suzana discuss what the freezing of the assets step means and what the typical approach is for dealing with situations in which this step needs to be taken.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

The Freezing of the Assets - Hull on Estate and Succession Planning #160

Posted on April 14, 2009 by Hull & Hull LLP

Welcome to Hull on Estates and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. The podcast you’re listening to will provide information and insights into estate planning in Canada. From the offices of Hull & Hull 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 160 of our podcast on Tuesday, April 14, 2009.

Ian Hull:   Hi Suzana.

Suzana Popovic-Montag:   Hi Ian.

Ian Hull:   So today we were discussing, our last week’s podcast was a pet peeve podcast and this is not a pet peeve podcast, but one that I think is worth exploring. And that is a scenario where we think, some people joke with us, that our practice of law can’t be urgent and that nothing pressing can happen.

Suzana Popovic-Montag:   That’s right, because everyone’s dead.

Ian Hull:   That’s right. Exactly. But in fact it’s not true. In fact, most of the time we are met with…not most, many times we are met with a new client meeting where the new client comes in and wants something done urgently. Wants an injunction, wants us to run to Court, wants us to freeze assets, do those kinds of steps. So I thought today we’d talk a little bit about what that injunctive, what that freezing of the assets step means and secondly, what is typically an approach that we take in situations like that.

So why don’t we look at…here’s an easy example. Someone comes to see us and it’s a daughter and she comes to see us and says look, I’m terrified. My brother is using up all of Mom’s money, he’s buying things, he’s spending it and I don’t know where it’s going. I need you to stop him from spending. And the first step you could take is to, once you’ve verified and identified your client as we said last week, you could take the initial steps of contacting the bank. And that is one step. Another step…and we’ll talk about that step, but first of all let’s talk about sort of the quick idea of the steps. Another is, of course, we could…some ideas is that we could run to Court and get a Court Order freezing him in his activity. Another idea is to do nothing. So within the framework of the various options available to us, we start with looking at the Rules of Civil Procedure here in Ontario that talk about getting Court Orders. Because if that’s the ultimate goal, we have to look to what is realistic. Can we achieve that ultimate goal?

Suzana Popovic-Montag:   And just even from a practical consideration, as much as we can do all the steps to get the Court Order and get the materials ready as quickly as possible, sometimes we are just, as a result of the process, at the mercy of the Court system itself and their availability to hear matters on an urgent basis. And so in terms of the little bit of the rush, we can do everything that we possibly can but there are sometimes procedural pitfalls that we come up against. And so to the extent that we can do everything on this end to get our clients in a position where they can get before a judge as quickly as possible, getting all the right information, getting as much information as possible as quickly as we can is all a precursor to being able to get a good result for them at the end of the day.

Ian Hull:   For sure. So if we’re going to come looking for that kind of urgent advice, you need to come well prepared.

Suzana Popovic-Montag:   That’s right.

Ian Hull:   With the documents, with the material that you have or the details that you need. And one of the things that we’ll typically say to a client is that well that’s fine, we can clear our desk so to speak, take all of the other priorities on our desk that day and start working on your file, but urgent attention requires urgent action, requires tremendous costs and it requires you know sort of an extraordinary effort to pull it together.

So that’s one thing. And I think the costs issue is a reality and one that has to be weighed against the risk. And what is the flight risk, so to speak? Who are we dealing with and is there a true risk that the monies are going to leave, or is there security behind it?

Suzana Popovic-Montag:   And the reality is, Ian, the Rules themselves speak to the possibility that the costs could become an issue at the end of the day. If you were to proceed, for instance, with trying to get some injunctive relief on an emergency basis and not necessarily be successful, a judge might criticize you for having taken those steps and award costs either against you or penalize you in some other fashion for having done so. So that’s something you’ll want to definitely canvass with your advisor before you decide to actually take some active steps in that area.

Ian Hull:   That’s for sure. So the issue of legal costs is fundamental. Both the costs of your paying your lawyer to clear their desk and get this relief and secondly, of course, if you’re wrong and you lose, and that kind of thing. And then I usually ask my clients and say look, let’s balance it against who are we dealing with and what is the flight risk. Are we dealing with a brother or a sister? Are we dealing with a friend, a neighbour? Are we dealing with someone who is known to be a flight risk, so to speak, who has international sort of dealings and maybe could take money and have it vanish and make it difficult to get? All of those assessments need to be undertaken by the client because we don’t know the other side. We can only say the safest route is to run to Court and freeze the assets. 

So if we want to sort of break that down a little bit, in terms of an approach that can be effective and is by no means secure, is that we can sometimes write the banks. And what do you find your experiences though when you write the banks with those kinds of “stop dealing with the account” letters?

Suzana Popovic-Montag:   Well often times we’ll be faced with the reaction of the bank being simply nice try but who are you to tell us what to do? And you’re just a lawyer. We don’t even know whether or not that authority is valid authority and until and unless a judge tells us, a Court Order tells us to stop, we’re not going to pay a lot of attention to that. And then there’s also the procedural dealings within the bank itself in terms of the different layers of people that have to look at this letter before you’ll even get a meaningful response. So I always warn clients that this is probably the least effective, or the least guaranteed way of effectively freezing any estate assets or any assets at all because the bank is not going to necessarily feel compelled just because your name is on a letter.

Ian Hull:   Well that’s a very good point. So if we’re not inclined to write the letter, or write the letter and we don’t get a favourable answer and the bank says look, its at Legal Department, but the Legal Department is telling us you have no authority to be freezing accounts and the bank sort of lets it sit there open. And if you don’t want to proceed with contentious litigation where you’re into tens of thousands of quick dollars that may not be recoverable and may be in fact recoverable against you, that’s when you really have to take that careful look at the risk assessment. And one of the other sort of cheap ways to try to freeze estate accounts in estate situations is to file a Notice of Objection, because that prevents the possible party that is allegedly taking the money from getting probate. Now again, that’s not a fail-safe and all it does is prevent someone from filing and getting probate. Well not filing but getting probate. But it too can be an effective tool. And I find what I do in these situations is that I sort of look at the paradigm and I start at the highest and that is Court Order, subject to the Court of Appeal, but a Court Order freezing assets, and work your way down. Letter to, for example, the banks. Sometimes it pays off; sometimes it doesn’t. Letter just from a lawyer; sometimes it pays off. Sometimes people get another lawyer, people agree to quickly let’s just freeze the accounts, take a deep breath and see where things are going to go. Notice of Objection: file the Notice of Objection. Getting third parties involved such as the Office of the Public Guardian and Trustee where there is a situation of an incapacity.

So those are just little variations on the theme with the ultimate goal and that is, if we’re going to try to stop the money flow, what steps economically, practically and legally can I take.

Suzana Popovic-Montag:   And none of these steps, of course Ian, are mutually exclusive. Like you can do all of them, you can do some of them.

Ian Hull:   Good point.

Suzana Popovic-Montag:   You can do most of them and its all part and parcel of the package that you put together to provide the best possible solution that you can to your client to try to get the best possible result at the end of the day.

Ian Hull:   Absolutely. Well that was just our thinking on what can be the urgency of death and death doesn’t get much more urgent when it deals with money.

Suzana Popovic-Montag:   That’s for sure.

Ian Hull:   So thank you very much for joining us today.

Suzana Popovic-Montag:   Thanks to you Ian.

Ian Hull:   Thanks Suzana.

You have been listening to Hull on Estates and Succession Planning by Ian Hull and Suzana Popovic-Montag. The podcast that you have been listening to has been provided as an information service. It is a summary of current issues in estates and estate planning. It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to The Positive Side of the Second Marriage

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss the positive side of the second marriage from a planning standpoint with a focus on capacity planning.
They discuss both property and personal care.

If you have any comments, send us and email at hullandhull@gmail.com or leave a comment on our blog.

The Positive Side of the Second Marriage - Hull on Estate and Succession Planning #158

Posted on April 1, 2009 by Hull & Hull LLP

Welcome to Hull on Estates and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag.  The podcast you’re listening to will provide information and insights into estate planning in Canada.  From the offices of Hull & Hull in Toronto, here are Ian and Suzana.

Suzana Popovic-Montag:   Hi and welcome to Hull on Estate and Succession Planning.  You’re listening, and some of you may be watching, episode 157 of our podcast on Tuesday, March 31^st, 2009.

Ian Hull:    Hi Suzana.

Suzana Popovic-Montag:    Hi there Ian.  How are you?

Ian Hull:    Just great, thanks.

Suzana Popovic-Montag:   That’s good.  Ready for April Fool’s Day?

Ian Hull:    Yes, I guess I’ll have to be.  Watch my kids come at me.

Suzana Popovic-Montag:    You’ve been warned.

Ian Hull:    So let’s work through the positive side of the second marriage, there’s always lots of positives.  But the positive side of second marriages on a planning standpoint because we do see, you know, if I had to estimate either the family cottage or the second marriage are the two biggest stumbling blocks to effective estate planning.  And we talked in our last podcast about the second marriage and how some of the mechanisms we could use to develop scenarios that will help fund both sides, both families.  Family number 1 and family number 2 in the second marriage scenario, or family number 3 and 4, depending on how busy we are.

Let’s today talk about, not as much focusing on the estate planning, but on the capacity planning because that in and of itself can be a really, really important scenario.  And we’re going to talk about the property and the personal care.  But just to start with the personal care, given the scenarios in a second marriage, sometimes the volatility of someone who becomes incapable for personal care can be incredible.  There’s the first marriage scenario where you’ve got maybe the surviving spouse.  Well everyone is alive in our illustration here.  But in the first marriage, spouse number 1 who is divorced from their original spouse may still be alive and may be thinking that he or she has some role to play at the time of incapacity or there might be some expectations by their kids of their mother or father playing some role in capacity, notwithstanding the fact that the spouse has moved on and remarried.

So the emotions can be extraordinary in that scenario.  So obviously our first suggestion to our clients is get your Powers of Attorney organized and think through the choice of attorney, both as guardian and as personal care.

Suzana Popovic-Montag:    And that’s really an important thing, Ian, because even though here in Ontario we certainly have statutory fallbacks in the event that someone hasn’t planned properly for their incapacity, you really want to take that moment, you want to meet with an advisor and you want to make sure that you lock that down properly.  Because there is, as you say, so much emotion.  And that can really overpower even like financial acumen or any other kind of reasonableness in these situations.  And so I think it’s very important that as part and parcel of the estate planning process, people include the incapacity planning as well.

Ian Hull:    So given the emotions of that moment in time when incapacity sets in and then the reaction to it, let’s talk about joint Powers of Attorney and let’s talk about it in a second marriage scenario where the couple have their own resources coming into the marriage but one may need to take over the other’s resources in a moment of incapacity.

Suzana Popovic-Montag:    And when they’re doing that, I think what people are thinking are that they want to sort of appease both families.  They want to appease the spouse and they also want to appease perhaps the children from the prior relationship.  And so they’ll think about a joint arrangement where more than one attorney is appointed.  And you can technically have as many people appointed as your attorney as you want.  The only restriction, of course, would be the actual execution of that document.  If you have too many people who can’t get along or too many people who are not going to be able to co-operate, it just doesn’t make any sense from a practical perspective.

Ian Hull:    Alright.  So what do you find, then, in these scenarios with the joint Powers of Attorney?  What are some of the legal restrictions or what should we be looking to, to make sure that we’ve at least created an effective document?

Suzana Popovic-Montag:    Well Ian, when you appoint more than one person as a Power of Attorney, those people who are appointed are presumed and expected to act jointly unless you specifically want to vest them with the opportunity and the ability to act independently of one another.  And so that’s something that you want to keep in mind to the extent that you can, because otherwise there is, as I said, this statutory expectation.  And similarly when you appoint more than one person, if one of them were to die or to become incapable or to not want to continue acting as your attorney, again there are some statutory expectations and the statute kicks in and says that the remaining people can act on your behalf unless you provide otherwise in your instrument.  So it allows for a lot of flexibility if that’s something that you want to build into your plan.

Ian Hull:    So when we look at our document, we look at the appointment provision as (a) and (b) jointly and severally or jointly or severally, that kind of language, so it allows them.  And as you say, I mean it’s so important to make this determination early on, make it clearly identified in the document because you’re dealing with third parties.  Its institutions like banks and hospitals and care facilities that have to read these documents and understand them.  And so if you’ve created too many attorneys and if you’ve created language that doesn’t clearly identify whether it is a joint Power of Attorney or not, you’re going to find yourself maybe running to Court to have to either clarify or re-do the documents through a guardianship application or something like that.

Suzana Popovic-Montag:    And another key thing to think about in these situations too is the trigger mechanism for a Power of Attorney.  And when I say that, what I’m referring to is the fact that some Powers of Attorney can be effective from the moment you sign them and others can only become effective once you become incapable.  And if you choose to create a Power of Attorney that only sort of springs into action when you’re incapable, you want to make sure that the test for when that document becomes effective is crystal clear.  Because again otherwise you are running to Court and seeking judicial determination of that.  And just think about when you’re in these situations with perhaps two different families, you know, there could be a real issue as to whether one agrees that the Mom or Dad is suddenly incapable or not.  So it’s just…

Ian Hull:    Yeah and I think it may be a bit understated.  I mean, I think you have to expect that the tensions are high and I mean really a big part of why we wanted to talk about these issues today and in our last podcast was that people put their head in the sand and ignore the fact that creating a second relationship, whatever it is, married or common-law, creates new tensions.  And those tensions can explode on a dime and you may not have predicted that for any reason why.  So I think you have to expect the worst in that scenario.  And I don’t think that’s an unfair…I think that’s a consequence of creating this new relationship.  So when you do expect the worst, you need to, it seems to me and we tell our clients, communicate that and communicate what is going to be expected, not just on death but communicate it when you get to moments of incapacity.

So the joint Power of Attorney, the document itself, we want to make sure it’s identified properly as the co-appointments or more or less, depending on who’s involved.  We want to make sure that we don’t have any sort of vagueness in terms of when it comes into effect.  Are there any other factors that we want to look at when creating a joint Power of Attorney, especially in light of a second marriage scenario?

Suzana Popovic-Montag:    Well Ian, one of the other tension points that I see often arise is the question of compensation.  When attorneys are acting jointly, we know certainly that there are, you know, statutory entitlements for attorneys who are acting as Powers of Attorney.  And then the question is, when you have more than one attorney, who gets how much?

Ian Hull:   Well that compensation issue can be a real hot button as sometimes the expectation is that you’re doing this all for free.

Suzana Popovic-Montag:    That’s right; it’s a labour of love.

Ian Hull:    Yes and its not easy because if you say you did put co-attorneys in from one kid from the first marriage and the surviving capable spouse, the expectation might be that one of the two of them or both are going to do this for free and it may not be something that they can afford the time and energy to do for free.

Suzana Popovic-Montag:    And another thing, of course, that arises or a possible conflict that could arise is the decision-making authority.  And what happens if the two people or more can’t agree?  And what kind of mechanisms can you build into your Power of Attorney to perhaps avoid going to Court?  Can you build in some kind of majority rule provision?  Can you build in the necessity to maybe attend at some kind of an informal mediation arbitration kind of arrangement to have these decisions made short of a full-blown legal warfare?

Ian Hull:    Well, and that’s a great idea.  So we can talk about that with our clients and create and craft the document as opposed to just, you know, pulling it out of a standard form.  Make it special for what is a special relationship.  So I think we’ve covered the Power of Attorney and the second marriage scenario at that level.  And we’ve had some interesting discussions in the context of estate planning.  So we have a little bit of a checklist we’ve created, both for the estate planning and for the capacity planning.

So thanks very much for today.

Suzana Popovic-Montag:    Thanks to you Ian.

You have been listening to Hull on Estates and Succession Planning by Ian Hull and Suzana Popovic-Montag.  The podcast that you have been listening to has been provided as an information service.  It is a summary of current issues in estates and estate planning.  It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to  Managing Disputes That Arise From Second Marriages

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss managing family disputes that arise out of second or third marriage relationships.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Managing Disputes That Arise from Second Marriages - Hull on Estate and Succession Planning #157

Posted on March 24^th, 2009 by Hull & Hull LLP

Welcome to Hull on Estates and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag.  The podcast you’re listening to will provide information and insights into estate planning in Canada.  From the offices of Hull & Hull 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 157 of our podcast on Tuesday, March 24, 2009.

Ian Hull:    Hi Suzana.

Suzana Popovic-Montag:    Hi there Ian.  How are you today?

Ian Hull:    Great.  Welcome back.

Suzana Popovic-Montag:    Thank you very much.

Ian Hull:    From your great vacation.

Suzana Popovic-Montag:    It’s great to be  back.

Ian Hull:    Yes.

Suzana Popovic-Montag:    Better to be away but still good to be back.

Ian Hull:    Well we had a couple of fun podcasts with Jordan Atin while you were gone and touched on some Will drafting and charitable gifting issues.  So today we thought we’d talk a little bit about what is probably one of the most prevalent problems we have in our practice that we’re engaged with in the litigation side, and that is, managing family disputes that arise out of second or third marriage relationships.

So the scenario, of course, is that we’ve run into and we’ve talked about in the past certainly is the classic scenario where there is a second marriage but there are children from the first and the second marriage.   And so there’s a surviving spouse and then the estate plan unfolds and the issues that arise out of that. 

So not that this is a new problem, but one of the classic ways to manage the second marriage scenario, and it certainly was very big in the 60’s and the 70’s, was this idea of creating a spousal trust for the surviving spouse.  So that one is still a live issue.  Let’s spend a few minutes just talking about that option.

Suzana Popovic-Montag:    Sure Ian.  And when you’re talking about a spousal trust, you’re referring I guess to an arrangement where the testator can create a situation where his or her spouse will get an entitlement, a life interest in the estate for as long as that person is alive and then on his or her death, there’ll be a gift over to probably the children or the other family members from the first relationship.

Ian Hull:    Absolutely.  And so that gives an opportunity to take the family wealth, pass it on in a nice tax-free basis because it’s rolled over into this trust.  As long as the trust is used for the exclusive benefit of that surviving spouse, the rollover works and that surviving spouse has and is allowed to live on and in some cases with the power to encroach to enhance their lifestyle, with as you say this gift over to the family.  And at that point, often it’s a question of to both sides of the family, to family number 1 and to family number 2.  Therefore you have avoided the contentiousness in some respects because you’ve had the surviving spouse live a long and fruitful life but whatever is left is divided equally per se between the two families.  So that’s one option in terms of dealing with and managing through scenarios with a second marriage.

Now let’s spend some time talking about some, what I would say, maybe let’s think outside the box a little bit because that one is the conventional classical approach.  What other approaches can we think of to help manage through this so that the two children, both generations are not ending fighting with each other.

Suzana Popovic-Montag:    Well one of the other things that we’ve talked about as an alternative, Ian, in the past is an estate freeze.  And I think that’s one of the easiest suggestions that sort of comes to mind apart from the spousal trust in this kind of a scenario.

Ian Hull:    And the estate freeze would allow for some more, especially in more complex holdings, allows for the freezing of the wealth so to speak in the first generation and then allows the growth to pass on to the next generation and you could, for example, create a family trust that holds the common shares, the growth shares, and that family trust benefits both families.

Suzana Popovic-Montag:    Right.

Ian Hull:    Both the first family and the second family.

Suzana Popovic-Montag:    And it can also specifically, with some creative drafting, provide for the surviving spouse on a tax advantageous basis.

Ian Hull:    Alright.  So when we’re dealing with the second family relationships and the estate planning behind them, one of the things that we often and always encourage our clients is to really hang on to the no secrets rule.  And that no secrets rule stems from the old adage that was created when mirror Wills are drawn.  And maybe let’s spend a few minutes talking about the no-secrets rule.

Suzana Popovic-Montag:    Well Ian, we’ve just spent a lot of podcasts talking about the family conference idea and I think that really stems from this whole rule of no secrecy so that there is a forthcomingness, there is a communication and a disclosure that’s made all the way through the estate planning process for the benefit of the family members.

Ian Hull:    And for sure that family conference allows us a great venue to deal with this and historically this idea of no secrets comes from the classic scenario when a couple comes in to see you to draw your Will and both of them are there and you say look, I’m jointly being retained here.  So I just want you to know from the outset that there will be no secrets as between each other and so that if in two years, one of you calls and says I want to change my Will, you can’t accept that retainer.  And you get yourself out of that situation because you’ve communicated that to your client.  And that next level is why are we keeping secrets as between the first family and the second family in the same context?  Because the estate plan is going to impact on both of those families.

Suzana Popovic-Montag:    That’s right.

Ian Hull:    Let’s spend a couple of minutes here on some creative solutions as well.  What if we don’t have the cash to fund these two families?  And second marriage relationships can be created obviously when you’re a bit younger; or can be created when you’re older, it depends.  But say it’s a scenario where you’ve got a couple that are remarried with young kids, both sets of young kids.  Sort of the Brady Bunch scenario, that’s a good idea.  What are some creative tools that we can use at that stage in life when you are a bit younger to manage what is going to be possibly some tension later down the road on the fact that one of you is going to die first and the others are going to leave a family.

Suzana Popovic-Montag:    And I bet you’re alluding to the concept of different kinds of life insurance policies…

Ian Hull:    Sure.

Suzana Popovic-Montag:    …and proceeds that can be set up because I know you like to speak about this topic quite a bit with the family history in the insurance industry.

Ian Hull:    Well we do have that.  But I also, not withstanding my bias, I do have a propensity to enjoy the solution because we see it so effectively on the estate planning side.  And so what are some of the ideas that we could use on the life insurance side to manage through this testy issue of two families?

Suzana Popovic-Montag:    Well there certainly is the concept of a whole life insurance policy and the difference between that and a term life insurance policy.  And I think when you’re in these situations where there might be an age discrepancy between the spouses, that might be something that you’d be looking to.

Ian Hull:    So what would we want to do in that scenario?  Say we have a couple that are married and there’s say 15 or 20 years’ difference in their age.  What would we use on the life insurance side for that?

Suzana Popovic-Montag:    Well the older spouse would probably be looking at a whole life insurance policy or purchasing something or an instrument of that kind of nature.  Whereas the younger one would be looking for a term life insurance policy, just because of the economics and the costs of buying those policies at certain parts and certain ages in your lifetime.

Ian Hull:    And the other creative tool with life insurance that I’ve seen used is the joint first to die, or the joint last to die policies which all again, I mean, we don’t do tax, we don’t do life insurance.  But what all these different policies do is that they give you options and they give you funding options which is the key element in ultimately avoiding the fight at the end of the day, is that have you funded in what is going to be perceived as fair and equal - maybe not equal but fair - between the two families.  And as I say, the insurance industry gives us one other option and that is, we can look to a funding mechanism and what that specific funding mechanism is would impact on each individual’s scenarios.

So those are sort of some central issues around the second marriage scenario and some solutions, as opposed to just talking about the negatives, some of the positives.

In our next podcast we’ll spend some time talking a little bit about what we do in a scenario with a Power of Attorney because as equally problematic with an estate plan can be your incapacity planning when you have a second marriage scenario.  So we’ll delve into that issue on our next podcast.

Thanks very much.

Suzana Popovic-Montag:    Thank you Ian.  And I look forward to our next podcast.

You have been listening to Hull on Estates and Succession Planning by Ian Hull and Suzana Popovic-Montag.  The podcast that you have been listening to has been provided as an information service.  It is a summary of current issues in estates and estate planning.  It is not legal advice and you are reminded to always speak with a legal professional regarding your specific circumstance.

To listen to other Hull & Hull podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to The Benefits of the Family Meeting

This week on Hull on Estate and Succession Planning, Suzana Popovic-Montag speaks with Rodney Hull about the benefits of holding a family meeting to discuss estate matters while the testator is still alive. They both extend their condolences to the family of Ted Rogers, who passed away today.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Direct and Indirect Approaches to Estate Planning - Part 1

This week on Hull on Estate and Succession Planning, Ian and Suzana start a discussion on their global philosophy toward the estate planning process. There are direct and indirect approaches to capacity and estate planning and in this episode, Ian and Suzana explore these approaches as they pertain to the choice of attorney.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Direct and Indirect Approaches to Estate Planning - Part 1 - Hull on Estate and Succession Planning - Podcast #140

Posted on November 25, 2008 by Hull & Hull LLP

Welcome to Hull on Estates 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 & Hull in Toronto.

Suzana Popovic-Montag: Hi and welcome to Hull on Estate and Succession Planning. You’re listening to episode #140 of our podcast on Tuesday, November 25^th, 2008.

Hi there, Ian.

Ian Hull: Hi Suzana.

Suzana Popovic-Montag: How are you today?

Ian Hull: I’m terrific.

Suzana Popovic-Montag: That’s good.

Ian Hull: It’s a big day today. It’s the founder of our firm’s birthday.

Suzana Popovic-Montag: That’s right.

Ian Hull: Rodney Hull turns something significantly more than 70. I’m not sure what. And it’s a big day for him. So…

Suzana Popovic-Montag: Congratulations Rodney.

Ian Hull: The topic that we wanted to cover today and we don’t know if we’ll get it done in one podcast, so we’re happy to do it in two, would interest I think a lot of listeners on a couple of levels. So we do remind you that you’re free to send some input to us. And e-mail us at hullandhull@gmail.com.

Suzana Popovic-Montag: Or of course, feel free to send us an e-mail at estatelaw.hullandhull.com.

Ian Hull: Alright. So one of the topics that has come up in the past six months in our blog and one that we wanted to sort of flesh out a little bit today was some of our sort of global approach to estate planning and how that dove-tails into the different kinds of contentious matters that can arise. And one of the most difficult contentious matters is when you get into a Power of Attorney fight. When you are fighting over the body, so to speak, while it’s alive. And when you have a person who’s in that grey zone of incapacity, who should control what and so on. So let’s, before we get into how that works, let’s talk a little bit about sort of our global philosophy that we kind of break down when we think about how we’re going to manage people’s estate plans. And we’ve sort of broken it down into three categories: one is the direct; one is the indirect approach; and the third is sort of a meshing of the two.

Suzana Popovic-Montag: That’s right.

Ian Hull: So let’s start with defining the estate planning process as we have with the indirect. What do we mean by that?

Suzana Popovic-Montag: Well that, Ian, I think is more or less what people would recognize as the traditional way of planning an estate. So it’s the documents that you create, for instance, in a Power of Attorney situation, the Power of Attorney document. It is a testamentary instrument, a Will perhaps. Those are the things that we have a comfort level with as lawyers, and probably a lot of lay people as well. Those are those documents that we typically identify with an estate plan.

Ian Hull: So we call them indirect because they are people’s efforts to estate plan or capacity plan without actually talking to anyone typically.

Suzana Popovic-Montag: That’s right.

Ian Hull: Because the document does the talking.

Suzana Popovic-Montag: That’s right.

Ian Hull: When you become incapable, the Power of Attorney does the talking. When you pass away, the Will does the talking. And that’s not to say that people don’t talk about those documents with their beneficiaries and their attorneys before they fall into those categories, those gruesome categories. But that’s how we look at indirect.

Alright. So then let’s step back again and if we’ve got sort of two categories, the indirect, what’s the direct estate planning techniques that we have used in the past that are of some help?

Suzana Popovic-Montag: Well those, Ian, are what we sort of call the eyeball effect planning methods. And we talked a little bit during our last podcast about the family meeting, for instance, as a suggestion of a way to do that, where you’re actually sitting around a table or in some informal environment with your family members and telling them what your plan is. What you would like to happen if something were to become of your capacity. What you would like to do with your estate upon your death. So you’re having that conversation with individuals. You’re looking them in the eye as we say, and explaining to them why you’re perhaps treating them differently than they might otherwise have expected.

Ian Hull: Alright. Well for today, we no doubt will talk in some detail about the family meeting. But we want to remind people that the first probably thirty podcasts of Hull on Estates and Succession Planning really particularize the process in extensive detail. So should they be interested, they’ve got a resource there. We always like to remind ourselves that we have done some hopefully useful things in the past.

Suzana Popovic-Montag: That’s right.

Ian Hull: So this indirect approach and the direct approach, these two options, what do we mean by the sort of third, hybrid option? What are we talking about in terms of the general concepts?

Suzana Popovic-Montag: Well both processes, Ian, are so fluid because they really, you can mold them to whatever your particular circumstances are. And so when we say a hybrid, what we’re talking about is the fact that some plans will have these kinds of informal arrangements where there is the meeting, there is the discussion which will then be turned into some kind of document, the traditional kind of estate planning documents that we typically see. And you’ll gear your particular circumstances to your situation. And so you’ll have maybe a written part, verbal part discussion or whatever it is, and you’ll come to something where its not sort of the, you know, cookie-cutter expectation of either the direct with the family meeting, or ADR or we call it Alternative Dispute Resolution mechanisms, or the actual traditional documentation.

Ian Hull: Okay. So a good illustration I’ve seen in the past with the hybrid approach is that an easy one would be someone does a Will, wants to give their gifts to certain individuals in the family and they tell them that. So they tell them who the executor is and who the beneficiaries are. So that (a) there’s no surprises; and (b) that if there’s some time to get feedback, they may as well do it while you’re alive.

Suzana Popovic-Montag: That’s right.

Ian Hull: So that’s our hybrid analysis.

Okay, let’s spend some time talking about how the indirect, direct and sometimes hybrid approaches are used sort of, let’s put some real tangibles to it, alright? And we talked earlier in this podcast about Power of Attorney litigation and those kinds of fights. Because there is really capacity planning which is Power of Attorneys, and then there’s Will planning. So let’s start with capacity planning and how we can use the indirect and direct form of communication to properly and effectively capacity plan. And let’s use one illustration that comes to mind. The first illustration that comes to mind is choice of attorney. So how are we going to deal with choice of attorney in the two different models?

Suzana Popovic-Montag: That’s a great set-up, Ian, for a discussion and I think, you know, we start of course with an individual saying or doing the planning, doing the determination of who he or she would ultimately want to take care of their affairs if something were to happen to their faculties and their own ability to do so. And so they will have an individual or two probably in mind, or, you know, other family members. They’ll call a meeting.

Ian Hull: Okay, so sorry, we’ll stop there. We’ve picked the person, right? So we’ve done our homework and that’s a personal step that we’re going to take, with maybe consultation. So there is some, that’s indirect because it’s ultimately, we’re not talking to anyone yet, but it might become more direct because we might say, geez you know, I’m thinking of x, y and z with our friends or our trusted advisors, not our family yet.

Suzana Popovic-Montag: Okay.

Ian Hull: Okay? So then you’re saying we need to call a meeting of some sort.

Suzana Popovic-Montag: It’s certainly a suggestion in those circumstances. If you do want to steer away from just having it become a surprise at the end of the day, then you’ll set up that kind of arrangement where you can have these discussions. And I think its really important to have them with your proposed attorneys. In particular, you want to make sure that they know how it is that you would ultimately like things to be handled once you can no longer handle them yourself, and also consider anyone else who might be affected by that decision, and perhaps consider bringing them into it.

Ian Hull: Good, alright. So we’re talking now, we’re leaving it from just this indirect; it will pop into the system when I become incapable and we’re bringing in some direct steps.

Suzana Popovic-Montag: That’s right.

Ian Hull: So let’s break down those two direct steps. The first is you say we should talk to our attorney. Alright, first of all, why would we talk to our attorney? And second of all, what are some of the things that we want to talk to them about?

Suzana Popovic-Montag: Well clearly, the fact that you are contemplating them as an attorney would be one of the first things that you’d want to discuss with them, I’d expect. And then beyond that, how you would like them to deal with this. And how you would like them to, for instance, if its your property that you’re dealing with, you’d like your assets managed during your lifetime. If its your personal care, you would want to discuss what kinds of things are important to you so that if these decisions have to be made one day, they’ll have some ideas as to how you would have liked them to have been executed.

Ian Hull: Well look, I think what we’ve done is we’ve started the process of how we’re going to use the two communication models, direct and indirect. We’re starting to put some illustration to that with the choice of attorney. The next podcast, let’s move on to talking a little bit about with some particulars, what are some of the actual things we’re going to talk about to our attorney. Before we’ve come out to them and once we’ve decided it, we’ve done our testing the waters.  We come out to them, we’ve chosen the person who we’re going to deal with, and what are some of the issues we’ll want to talk to them about. And we can do that both in indirect ways and direct ways, and we’ll talk a little bit about that in our next podcast.

So please, again, we remind you that we welcome and look forward to any feedback you may have. Easiest way to do it might be at hullandhull@gmail.com if you’re liking the e-mail from that venue.

Suzana Popovic-Montag: Or feel free to visit our blog at estatelaw.hullandhull.com.

Ian Hull: Thanks Suzana.

Suzana Popovic-Montag: Thanks Ian.

You have been listening to Hull on Estates and Succession Planning by 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 issues in estates and estate planning. It is not legal advice and you are always reminded to talk with a legal professional regarding your specific circumstance.

To listen to other Hull on Estate podcasts, or leave any questions or comments, please visit our website at hullestatemediation.com.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 12

This week on Hull on Estate and Succession Planning, Ian and Suzana clarify the distinction between claims of resulting trust and claims of constructive trust.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Will Challenge Litigation Part 12 – Hull on Estate and Succession Planning – Podcast #137

Posted on November 7, 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 137 of our podcast on Tuesday, November 4^th, 2008.

Ian Hull:  Hi Suzana.

Suzana Popovic-Montag:  Hi there Ian, how are you today?

Ian Hull:  Just great.

Suzana Popovic-Montag:  That’s good.

Ian Hull:  Remember, of course, we’ve got our call-in, 206-457-1985.

Suzana Popovic-Montag:  And please feel free to continue with the feedback at hullandhull@gmail.com.

Ian Hull:  And speaking of feedback, we got an interesting comment on our last podcast and thought we might touch on it today as we were working through additional issues beyond the Will challenge, but in the context of a Will challenge.  And the comment was that they didn’t understand when we referred to a Supreme Court of Canada case, the Picori decision, how it sort of was relevant.  So it was a timely question and one that we are going to deal with today actually because we want to talk a little bit about what those two claims are and how they fit into a global Will challenge piece of litigation.  They can be separated from Will challenge litigation but they also can be part and parcel of the Will challenge.  So why don’t we spend a little bit of time talking about them.  First of all, the concept of resulting trust is again and what constructive trust is again, and then we’ll talk a little bit about how we’re using them in our day-to-day practice.

Suzana Popovic-Montag:  That’s great Ian.  And we know basically that a resulting trust is a trust that arises at law by virtue of the fact that Courts are looking for ways to make sure that people are treated equitably.  And so if someone is left in a situation where they ought to be able to make some kind of claim against a certain pool of funds, for instance, or some other type of asset, that this remedy is something that is available to them.

Ian Hull:  And the constructive trust, really the concept comes from this idea of unjust enrichment that we talked about and that someone’s done work and not been paid for it.  It’s as simple as that.  With the constructive trust world and where it developed, and it certainly developed very intensely out of the United Kingdom and the in Canada.  In Canada, there was sort of a trilogy of cases that developed.  But what happened was, the cases that started if off and why its sort of helpful is that it gives us an idea of how its being used today, is that the Courts sat back and said, in this case, the Murdoch and Murdoch decision and the following decisions that came from that, the Court sort of said look, there was an unequitable treatment of a husband and wife.  This was pre-family law equalization times.  And the Court said, well the wife has demonstrated that she participated equally in the marriage but on death, I mean not on death, in this case on marriage breakdown, the assets were being split up based on legal title.  And the Court said that’s not fair.  So they stepped in and said if you’re going to participate, you are constructively holding, you’re actually participating in the growth and the build up of assets, then you’re entitled to be replenished from your work.  And whether you have legal title, whether the farm is in your name or its not, the Courts have said that doesn’t really matter.  What matters is, what did you do?  And it comes back to our similar way that we looked at quantum meruit as well.

Suzana Popovic-Montag:  And in fact unjust enrichment is very, very similar to constructive trust except whereas you’re looking for payment of money in the cases of unjust enrichment, with constructive trust you’re usually looking to have some kind of claim to an asset itself, some interest in, you know, because these cases seem to have arisen in a family law context, an interest in the family home or some other property that is owned by one of the two people in a relationship.

Ian Hull:  So that’s developed and in the estates law, the constructive trust claim is prevalent, certainly easily identified in a Will challenge scenario when you might have someone who is excluded from the Will.  And say doesn’t get any of the family farm, and let’s say it’s the son.  But that son has been working the farm for many, many years.  And instead of looking to get paid for work and services as we did in quantum meruit or instead of trying to create a claim of proprietary estoppel which we talked about in a prior podcast, there is the claim that that asset is being held in trust by virtue of the work and services performed, and that you’re entitled to a portion of it.  Not maybe more than you’d get paid on a quantum meruit, maybe less than you’d get on a proprietary estoppel.

Suzana Popovic-Montag:  And just by virtue of a claim, of course, Ian, there has to be a real relationship between the work that was done for the property and the property itself.  So that’s what takes this sort of, I think, outside of the box of being entitled to just a money payment for services rendered, that there’s actually a correlation between what you did and the property that you were doing it for.

Ian Hull:  Absolutely.  So I think its just one of those things that if we can consider, looking at both resulting trust and constructive trust.  We’ve talked a little bit about the distinction.  Sometimes on the facts it’s a distinction without any difference because you’re sometimes looking at trying to oppose a constructive trust or a resulting trust over a joint bank account.  You can sometimes impose it over land or specific items.  So, you know, we’ve tried to get into the distinction a little bit today but as long as we remember, and we try to remind our clients, you know, it’s an option.  And it is part of the various approaches that we may or may not want to take when we’re dealing with a Will challenge-like scenario where we have been excluded or we are excluded and on what basis.  And I think really from our perspective anyway, it is one of the more difficult claims to pursue.  So we typically don’t want to pursue it unless we think we’ve got some decent hold on it because it’s a bit of a flaky claim, to use a term of art and the Courts are not going to use it unless you’ve got the rights facts.  And where the Courts have historically imposed these kinds of trusts is when you’ve got obvious unjust deeds being done here, where someone has been unjustly treated at a level that there is no other way to solve it but by imposing these principles of equity on top of the facts and ultimately then coming to the Court, coming to say look, now I have a legal reason to say why that farm should go to Johnny and actually I only need 25% of the farm to go to Johnny because that represents the efforts that Johnny put into the farm property.

Suzana Popovic-Montag:  That’s a really good point, Ian, because the truth is, these kinds of cases are hard to demonstrate factually because of the requirement for corroboration, because of the fact that so much of the evidence that would traditionally be led is more or less viewed by the Court as self-serving evidenced.  And so to be able to find third party evidence of these situations is not necessarily that easy, but when it is, then strictly these claims are ones that we do pursue and as best as we can in the circumstances, knowing of course that there’s no guarantees even with that at the end of the day.

Ian Hull:  Absolutely.  Alright, well before we turn to our next topic, one of the things that we’re trying to work through with our video podcasts is we’re going to, from time to time as well, we wanted to let everyone know that we’re going to try to do from time to time an audio and a video blog where we run into an issue that demonstrates a really interesting point that in and of itself doesn’t justify a whole podcast or a video podcast, but might be worthwhile having a couple of minutes.  So you’ll see us, from time to time, putting our little short snippets in, hopefully they’re helpful.  And we have a couple of ideas and really we’re going to try to do is just grab them from our practice.  And it may not happen once a week, it may not happen once a month, but every once and a while you’ll see that.  So we look forward to that new little twist in our day-to-day social media efforts.

So thank you very much. That winds up, I think, our discussions for today’s podcast.  We’ll continue with our Will challenge series and please feel free to send us an e-mail at hullandhull@gmail.com.

Suzana Popovic-Montag:  Or, of course, call us and leave us a video comment at 206-457-1985.  Thanks very much, Ian.

Ian Hull:  Thanks Suzana.

You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag.  The podcast you have been listening to has been provided as an information service.  It is a summary of current legal issues in estates and estate planning.  It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other Hull On podcasts, or to leave any questions or comments, please visit our website at hullestatemediation.com.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 11

This week on Hull on Estate and Succession Planning, Ian and Suzana talk about the differences between quantum meruit and propriety estoppel. As with any add-on claims, the courts require solid corroboration. They also discuss claims of resulting trust and claims of constructive trust.

If you have any comments, send us an email at hullandhull@gmail.com or leave a comment on our blog.

Will Challenge Litigation Part 11 - Hull on Estate and Succession Planning - Podcast #136

Posted on October 28, 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 136 of our podcast on Tuesday, October 28, 2008.

Ian Hull: Hi Suzana.

Suzana Popovic-Montag: Hi there Ian, how are you today?

Ian Hull: Great thanks. It’s a big day. It’s my brother’s birthday so “happy birthday” to my brother.

Suzana Popovic-Montag: Happy birthday.

Ian Hull: And we’re going to, I’m sure he’s not listening, he’s stuck in the throws of a software development firm that is going crazy. 

Suzana Popovic-Montag: So you’re not going to sing?

Ian Hull: No, we’re not going to sing, we’ll definitely not sing. But we will invite everyone please, to come and hit our web page because we have had such great fun with feedback and just engaging in the social media world with people: estatelaw@hullandhull.com is where you can get your blog and hullandhull@gmail.com; we invite you to please feel free to send us an e-mail.

Suzana Popovic-Montag: Or feel free to leave an audio comment for us at 206-457-1985. We always appreciate hearing from people directly in terms of what they think.

Ian Hull: Absolutely. So where we left off last week was, and I actually got an e-mail from one of my colleagues about this question. And so we left off on this pointing out the difference. We talked about the concept of proprietary estoppel. We talked about the importance of not just throwing stuff at the wall to see if it sticks but pursuing claims that need to be pursued. We talked about how best to pursue it with good corroborative evidence. But what we left off was, we left it sort of with the listeners hanging, so to speak, is what’s the difference between the two? And I guess, let’s talk about the result. What is the different result that you achieve between pursuing a proprietary estoppel claim and a quantum meruit claim? And then let’s talk a little bit about what a quantum meruit claim is because then you can frame the kinds of approaches you want to take in respect of an add-on claim to a Will challenge.

Suzana Popovic-Montag:  Well Ian, I typically tend to think of a quantum meruit claim as a claim like an hourly paid claim for services rendered to someone without having been paid at the time, but with the expectation that at some later point they’d somehow be compensated. Is that sort of how you view it as well?

Ian Hull: No question. And the big difference between a quantum meruit claim and a proprietary estoppel claim is that a proprietary estoppel claim allows the Court to give you a home run. Whereas the quantum meruit claim restricts the Court because it is a fee for services claim. As you say, it’s an hourly wage based claim. How much did you work for the individual whose now died who promised to pay you when they died and didn’t? And the Court will calculate your hours. So it’s a very different claim and we’ll talk a minute about how we pursue those claims but I think the result is the key and where again we come back to being surgical about what kind of claims we want to take is that if we think we can get the home run play, and that is, get the whole house as opposed to just some repayment of hourly wages, the proprietary estoppel claim opens us up to a tremendous result. And again, we come back to the classic example of a nice, elderly gentleman who was helping a widow with her home and when she said, in one of the leading proprietary estoppel cases, this will all be yours, the Court was able to say, this is really all of yours and that meant the house as opposed to don’t worry, you’ll be looked after. And that could be construed as more of a quantum meruit claim.

So let’s talk a little bit about the history as we’re in the world of, our case law is always historic in every way. The history of quantum meruit claims, so that we can help better understand how we’re going to pursue those kinds of claims.

And we go back to the 1940s in Canada, the Supreme Court of Canada, where they started to develop the law out of England. And it basically came out of the same, the Degelman case its called and we’ll have the case in the Show Notes. But the case was much like my proprietary estoppel example in terms of the facts. And in Degelman the same sort of thing happened. A nice gentleman came to assist, in that case again, a widower and the comments were made and expectations were created that he would be paid for cutting the lawn and looking after the house and so on. And sure enough, when she died, he wasn’t. So the Court struggled with how we can deal with this unjust enrichment because the Court doesn’t like the idea that this person acted to his detriment and didn’t get paid. And so the Court basically sat down, and as you say, did an hourly wage basis analysis and said, took the Latin phrase quantum meruit, paid for work for services rendered approach, and said well, how many hours did you work and what’s a fair hourly wage? So the Degelman case established what is, I think, a really important add-on claim in a Will challenge because sometimes you can’t prove there’s lack of capacity. Sometimes you can’t prove you were promised the whole enchilada and the whole house. But you can prove your services rendered. And it comes back to this high standard that the Courts expect on corroboration and the fact that you’ve got to put such good evidence forward to the Court, or they’re not going to give you your claim.

Suzana Popovic-Montag: That’s right. I mean, the truth is, we do have the benefit of an equitable Court, I’d say, in the sense of what you just said, nobody wants to see someone work for free on an expectation that they would receive something at the end of the day. And when you’re in these situations, the facts are really going to drive, I think, the result, in addition to the evidence that you can put forward in support of it. But if you’ve got someone who is mowing the lawn, buying groceries and taking someone to appointments and that, you can see where a Court might think more in terms of a quantum meruit kind of claim, because those are kind of services that are rendered, as opposed to the other situation where you’re claiming proprietary estoppel and you’re dealing maybe specifically with maintaining a house or a farm property or something to that effect, where it might make more sense that the whole enchilada, as you say Ian, was what was expected, what was intended, and what hopefully you’ll be able to prove in terms of entitlement at the end of the day.

Ian Hull: So now that we’ve got two efficient and can be very powerful add-on claims, we also have to keep in mind the two other historic claims and that is, claims of resulting trust and claims of constructive trust. And why don’t we start with the resulting trust because that was historically, in a chronological order, the one that was established first. And it is the one that had such a big impact when you have joint assets. So let’s spend a minute on the concept of resulting trust.

Suzana Popovic-Montag: Sure Ian, that’s a good idea. Now when we talk about a resulting trust, of course we’re talking about a situation where assets are held jointly and on the death of one of them there is an expectation, either of obtaining those assets by right of survivorship or by way of a resulting trust.

Ian Hull: And what the Courts have done is they’ve said if you have an asset and say this, even if it’s not jointly in some cases, if the asset is held by an individual. So you hold an asset that over the years you have allowed me to participate in and a classic example is a cottage property. So you hold it and over the years you’re the one that has put all the money in, you bought it, you kept it up. But from time to time, I used it or I at some level paid toward the costs, that kind of situation. The Courts will look at that illustration as something that may require a resulting trust because on my death, for example, like you said, say that cottage is jointly held between you and I. On my death, it would be by right of survivorship. But what if I held the property in my own name and you had paid me all the money to buy the cottage because you were lending me the money and you hadn’t shown anything on mortgage or anything like that. The bottom line was that you ended up, the title didn’t pass to you. That scenario can create a situation where a resulting trust argument needs to be pursued. And the joint accounts is the other classic.

So anyway what we’ll do in the next podcast is talk a little bit about the examples so that we can really lock down this concept of a resulting trust and then see where it developed in a constructive trust. And we remind everyone please, look forward to your feedback at hullandhull@gmail.com.

Suzana Popovic-Montag: Or estatelaw@hullandhull.com which is our blog. And, of course, our phone number, 206-457-1985.

Thanks very much, Ian.

Ian Hull: Thanks Suzana.

You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other Hull On podcasts, or to leave any questions or comments, please visit our website at hullestatemediation.com.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 10

This week on Hull on Estates, Ian and Suzana discuss extraneous claims that can arise during a will challenge. In particular, they talk about propriety estoppel and other situations where someone worked to their detriment in the context of an estate dispute. For these kinds of claims, you require solid corroboration. Next week, Ian and Suzana will address the differences between quantum meruit and proprietary estoppel.

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 10 - Hull on Estate and Succession Planning - Podcast #135

Posted on October 21, 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, and some of you may be watching, Episode 135 of our podcast on Tuesday, October 21^st, 2008.

Ian Hull:  Hi, Suzana.

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

Ian Hull: Just great.

Suzana Popovic-Montag: That’s good.

Ian Hull: So, working through our Will challenge process and thinking about some of the other issues you want to consider when you’re doing a Will challenge, I thought it would be a good idea to talk a little bit about some of these extraneous claims which can actually turn out to be the elephant in the room, so to speak. So, why don’t we start with just a brief discussion on the concept of proprietary estoppel and how that gets dove-tailed into a Will challenge. So, first of all, why would we be putting this on the table even as an issue?

Suzana Popovic-Montag: And one of the reasons we’d be doing this, of course, is because of the fact that, when we’re doing a Will challenge we’re not necessarily sure, at the very beginning, just how successful our challenge is going to be. And so in an attempt to sort of hedge our bets as much as we can, we try to think of any other possible claims that we might be able to bring in conjunction with the Will challenge in the event that, for some reason, the challenge is unsuccessful. And we talked during our last podcast a little bit about the concept of quantum meruit, and I think that’s a nice segway for the whole discussion of proprietary estoppel, as well.

Ian Hull: Well, for sure, and let’s talk about what proprietary estoppel is. And we typically will bring these kinds of claims, only if it makes sense, because it doesn’t always pay to simply add to the costs and the burdens of running a Will challenge. But the concept of proprietary estoppel does stem from the whole thinking that if you are aggrieved, and you haven’t received under the estate as you thought you might. A typical Will challenge is obviously when a child gets written out of a Will and that is, of course, a situation where the child would think that they have been aggrieved. In this case of proprietary estoppel is one where promises are made by, say, an easy example of a proprietary estoppel claim might be some of the classic British cases where someone comes to assist an elderly individual, and one of the leading cases was an elderly woman who had a fairly vast property and needed care, not for herself, but looking after the property, and a gentleman and a neighbour in the town assisted her. She was assisted on the basis that he would come fairly regularly, two or three days a week. He’d cut the grass, fixed things, and so on. It was an old property and needed lots of work. And throughout this time period, she would constantly say to him, look, I can’t pay you now, I’m land rich and cash poor, but don’t worry, because when I die, you’ll be looked after. And she went so far as to say, one day, this will all be yours. Now this story is not entirely uncommon and lots of cases we see, that one day this will all be yours statement made.  And in the proprietary estoppel world and the quantum meruit world, as you say, that case can be very seriously pursued in the Courts. And the Courts will embrace the fact that this poor gentleman has worked to his detriment.

Suzana Popovic-Montag: And the claim, Ian, really is an equitable one. So a Court is going to look at the factual situation and they’re going to, perhaps if there is a Will, they will say well, notwithstanding the terms of the Will, this was a set of egregious circumstances where someone has provided a service for someone, to his or her detriment, on the expectation that they be compensated and yet, at the end of the day, they’re not. And so how do we rectify that situation? And by virtue of this claim, and it is, in fact, a cause of action, the claim for proprietary estoppel, you can make this allegation. And I think what you said originally about the fact that we want to be very careful in the extra claims that we pursue during a Will challenge. It’s important to recognize the fact that strategically, we want to make sure that we don’t look like we’re just sort of all over the place.  So if we’ve got what we think to be a strong Will challenge, coupled with a strong claim for proprietary estoppel, I think strategically there’s a lot to be said about that kind of focused pursuit.

Ian Hull: And you know, as you say, it really just comes down to the Court looking at this and saying, has someone been unjustly enriched? And that is pretty well the threshold question that happens, practically speaking, in every Will challenge. Has one side of the family or one individual been unjustly enriched to the detriment of the other? And the key with the proprietary estoppel cases, is as you say, that we want to pursue them when it makes sense. We’re not, in our firm, big proponents of throwing everything at the wall and seeing what sticks. We find it deludes our claim, because we can say to the people, well look, with vim and vigor, this kind of claim will or may well succeed. 

So, the fundamental point of law that we need to keep in mind, though, when we pursue these claims, are two-fold. One is the question of corroboration which I want to talk about, and the second is that you act to your detriment. You have to show that you did indeed come and cut the grass and come and look after the premises on a what would be seen as more than just a friendly, one-off basis. And the other aspect of it is, of course, this idea that you’re not going to succeed with this claim without good, solid corroboration, and that’s meaning supportive evidence from a third-party source that isn’t just your mother saying, that’s what happened. It’s sourced from an independent party, for example, the minister in town may have overheard this nice gentleman while he was talking to this nice elderly lady who, at that point, said, gee, thank you again for coming, this is the third time you’ve come this week, boy you’re spending a lot of time, don’t worry, I know you’re going to be looked after, one day this will all be yours.

Suzana Popovic-Montag: And that really is very important in these kinds of claims, because otherwise, they are quite self-serving. And I know we’ve talked on previous podcasts about the need for corroboration, and this one, I think, particularly calls out for that kind of evidence because the other side is simply going to say, prove it, and you’ve got to do so.

Ian Hull: And the concept of corroboration, and my final thought on that is, it’s so strongly entrenched in the laws in any civil jurisdiction in Canada and in the United States, and it is set out in most of the statutes, most of the evidence statutes, it’s set out in that as well.  So there is such an importance placed by the Courts on this outside evidence to support it, so that you don’t just have people standing up in Court saying, these things were said, and not having the one person, who is the one who said it, around, and taking advantage of the death, so to speak. The Courts won’t tolerate it and legislatures have said that they won’t tolerate it and that’s why they put the statutes in. 

So our next aspect of this whole idea of proprietary estoppel is quantum meruit.  And the distinction, I think, is very important to make, because of the difference of the result. And I think in our next podcast we’ll talk a little bit about the quantum meruit concept and talk a lot about why there is such an important distinction between the two and why you may want to pursue proprietary estoppel or both, but keeping your eye on the ball, so to speak, because of the result, not as much as because of the case. So we remind everyone please, feel free to call in at 206-457-1985. Give us your comments and your feedback. The social media world, we embrace it, and we’d really love to hear from you.

Suzana Popovic-Montag: And of course, we invite you to visit our blog at estatelaw.hullandhull.com or, if you prefer to e-mail us at hullandhull@gmail.com. Thanks very much, Ian.

Ian Hull: Thanks, Suzana.

You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other Hull On podcasts, or to leave any questions or comments, please visit our website at hullestatemediation.com.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 9

This week on Hull on Estates, Ian and Suzana discuss other claims that can be made concurrent to a classic will challenge. In particular, they talk about quantum meruit claims and how these can be interpreted differently depending on the situation.

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 9 - Hull on Estate and Succession Planning - Podcast #134

Posted on October 14, 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 134 of our podcast on Tuesday, October 14^th, 2008.

Ian Hull:  Hi, Suzana.

Suzana Popovic-Montag: Hi there, Ian. How are you?

Ian Hull: Great.

Suzana Popovic-Montag: That’s good.

Ian Hull: So, we were developing some of the, what we seem to be at now, is the sophisticated issues, some of the, which aren’t all that complicated, but they’re sophisticated issues that are tied into a classic Will challenge and what our clients can expect on either side, defending or propounding or upholding the Will. And we promised that we’d talk about today a development that kind of stems from the corporate issues that we talked about in our last podcast, and that is some of the other claims that can be made that are equally important, that aren’t falling directly in the whole closet of a Will challenge proceeding, but are often pursued concurrent, or at the same time literally, as the Will challenge proceedings. 

So let’s start with the classic, the one that was developed in Canada and throughout the U.K. in the mid-1900s, and that is the concept of quantum meruit.

Suzana Popovic-Montag: And that, of course Ian, I think you’re referring to the fact that a claim can be made against an estate on behalf of someone who says that during the lifetime of the deceased, I provided him or her with services for which, now that they’ve passed away, I should be compensated for.

Ian Hull: And that came out of a case in Canada, the Degelmena case, and that case, it’s a great story because what happened there, and the Courts saw this story unfold.  This nice gentleman acted, helped a woman out and performed day-to-day services for that woman, cutting the grass, looking after her affairs and so forth, almost handymanish kind of work, but a lot. And the Court said, and throughout his lifetime he appeared to be under the impression that he was going to be looked after, because the comments from this nice widow were, you will be looked after, don’t worry. He was never paid during it, so he worked away at this. And quite frankly, ultimately, he wasn’t looked after. And the Court looked at this problem and struggled with it and it’s an interesting development, because we’re going to go from the concept to quantum meruit, all the way through to the concepts of proprietary estoppel, all of which sort of tie in together. But staying with the quantum meruit claim, the Court said this isn’t right, we’re not going to let this happen, you can’t do this to people. They can’t be expected to have worked for free. And so the Court imposed what they call quantum meruit; that is, paid for work and services provided.

Suzana Popovic-Montag: That’s right. And you know, we’ve looked at the cases and we know that these are very difficult cases to predict the result of and that’s because there’s such a subjective component to the evidence that a judge is going to hear, and to the evidence, of course, that’s going to be led, and to what ultimately, I think, in fairness, a judge says, yeah that is what would be fair in the circumstances. 

Ian Hull: And in coming through that analysis in the quantum meruit context, the Courts we find, are typically looking at an hourly wage analysis. They say, well, how long did you work, how many hours a day did you work? Taking it outside of the case that we’ve just talked about, taking it into a situation where a daughter and a mother are alive, and the daughter is the dutiful daughter and works hours on end, does healthcare help, does financial care help, all of those things that we talk about in Power of Attorney fights and how we get compensated, but more importantly, gets into the same scenario and doesn’t get paid. Well that angle, in the context of quantum meruit, the daughter would naturally want to say listen, I want to make a claim and they’d come to see us and say, I want to make a claim. There’s a big difference here. We talked about our first case and that was the work of a handyman, a third party, maybe friend, but not a family member, not a close family member. Now in the second illustration I’m talking about is a daughter and mother. How do the Courts react to that scenario as opposed to the handyman scenario?

Suzana Popovic-Montag: Well as you can imagine, I think a judge will be more reluctant to recognize the services rendered by someone who’s a family member than someone who’s a third party. And the reason for that is simply because of all of our expectations in society that children do take care of parents or that parents will take care of children in reciprocity. And so, in that situation, it really becomes, I would suggest, a question of the evidence. What kind of evidence can you demonstrate or lead to show the judge that yes, this was dutiful work that would have had to have been provided to mom but someone, if it wasn’t dutiful daughter, would have had to provide for and mom would have had to pay for. This brings you back to the question of what kind of records do you have? How can you demonstrate that there was X number of hours that ought to be paid on a certain basis? These are not easy claims really to pursue, but I think they are important ones in a lot of circumstances.

Ian Hull: And they really are and I mean, I’ll say it once and I’ll say it again, people don’t remember this, but sometimes, is that judges are people too.

Suzana Popovic-Montag: That’s right.

Ian Hull: And they sit there and they say, they see a case like this, and we’re talking about the daughter-mother scenario, and they say, they struggle, because they say, you know what, that’s what kids are supposed to do. Now naturally, that’s the natural order of life sort of thing.  And then they balance it against, like you say, well if the child hadn’t done it, she would have had to have had an independent third party do it, and they’ll go out and they’ll test the market. They’ll expect counsel at these trials to have put to them details of what’s the market rate, what would that have been, what is a duty care nurse or what is a person to cut the lawn scenario. And so, it’s really as you say, it’s a tough case. When you’re doing it, you almost never remember to keep good records, because you’re doing it for your mom, because you’re also doing it, or the handyman scenario, you’re doing it because you were promised that it was going to be okay and that you would be looked after. And when the day of reckoning comes and the Will doesn’t look after you, obviously disappointment comes, and you have to scrounge around and collect your evidence at a time that it may be too late.

Suzana Popovic-Montag: Another thing that’s particularly difficult I find in these situations is that they can tend to be very emotional pieces of litigation, and the reason for that is because typically it’s another family member that’s saying, you shouldn’t have done that. It’s the brother saying, you know what, you were living with mom, you were living off her back anyways, you should have been providing these services, and that’s just not always the case. And so when you add that emotional element to the difficulty, of course, in finding the evidence to support these kinds of claims, they really can be difficult.

Ian Hull: Absolutely. And so having said that, as difficult as they are, it’s an element of the process. And when someone comes to see us about a Will challenge, there’s a bit of a checklist that we like to go through, whether it’s defending or propounding, and the first one is how good is your case in the Will challenge. And we go through that, and we’ve already talked about that in previous contexts and previous podcasts. Then we say, okay, can we supplement your case with a claim like this, to add on, to layer on the pressure to the other side, and then, or vice versa, are we going to be faced with that kind of claim. If you’re going to say, and a classic scenario that the child has been written out of the Will and gets nothing, well it’s not always a full stop there. And a quantum meruit claim might be the kind of claim you would consider layering on, to help bolster your position, and it’s a strategic position on either side. 

So, I think that’s a really good illustration of where these tangential claims get made in the context of the overall Will challenge proceeding. There are many other ones worth considering, and there are some creative ones as well. But from our standpoint anyway, that’s the starting point. And that’s the quantum meruit claim. There’s probably three or four other ones that are worth considering that are appropriate layering on. And that one, the next one that we could consider is, of course, the concept of proprietary estoppel, because it’s an extension of quantum meruit. And the proprietary estoppel claims, I think, are, well they’re very, very much used in the U.K. and I think are an interesting tool that we want to talk about. And I think what we’ll do is, we’ll spend some time in our next podcast talking about the expanded claim essentially of the quantum meruit , and that is, proprietary estoppel. So we’ll look forward to that podcast.

Suzana Popovic-Montag: Absolutely. Thanks very much, Ian. Just a reminder to our listeners, to feel free to provide us with any feedback you might have on our podcasts at hullandhull@gmail.com.

Ian Hull: And please feel free to call in at 206-457-1985. Thanks, Suzana.

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.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 8

This week on Hull on Estates, Ian and Suzana discuss corporate issues and implications during a will challenge. Issues of testamentary capacity and undue influence can become extremely complex questions to investigate in a corporate inquiry.

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 8 - Hull on Estate and Succession Planning - Podcast #133

Posted on October 7, 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 133 of our podcast on Tuesday, October 7^th, 2008.

Ian Hull:  Hi, Suzana.

Suzana Popovic-Montag: Hi there, Ian. How are you?

Ian Hull: Just great.

Suzana Popovic-Montag: That’s good. Just a quick reminder to our listeners to feel free to call and leave us any comments you might have on our call-in line which is 206-457-1985.

Ian Hull: And of course, look to our blog at estatelaw@hullandhull.com and an e-mail, we would welcome any comments through hullandhull@gmail.com. 

So, Suzana, as we are discussing the Will challenge process and you say, listening, and we’re also on the video as well, let’s spend some time today talking about a branch of what we see commonly arising in Will challenges, and that is, what is the corporate implications and what sort of corporate issues can arise?

Suzana Popovic-Montag: And this really is a timely issue, and I think one that we see in many files, just by virtue of the fact that our estates tend to be quite large these days.  And as part and parcel of the planning during a lifetime, there is going to often be a corporate component.

Ian Hull: And that corporate component also, in Ontario, is very much highlighted because we have the primary and secondary Will regime, where assets are being placed, corporate assets are typically being placed in the secondary estate. So we have to be alert to the fact that a lot of estates are going to have a corporate element to it. And what we will tell our clients often is, sit back and help us understand the corporate machinations. And they’ll look at us sort of strangely and say, well what does that have to do with testamentary capacity? Or what does that have to do with undue influence? How can that have any impact on either upholding a Will or setting aside a Will? And the answer to that is fairly straightforward. And that is this: that an element of testamentary capacity is to know and understand the nature and effect of your dispositions. What does that mean? Well, that means that typically, the person who undertakes the Will and estate plan has to understand what they’re doing. Now the case law, without getting too intricate in it, gets very close to the line. It talks about whether or not you knew and understood, but it doesn’t expect the testator to have every single aspect of the estate plan understood at every level of minutiae. 

Suzana Popovic-Montag: And the reason, of course for that, is because these things tend to be complicated, and for a lay person, certainly we can set up corporations and have these kinds of arrangements put in place.  But again, without understanding the minutiae, because we’re relying on professionals to help us with that part of the process.

Ian Hull: And so the Courts have historically said, if you want to develop a complex estate plan, as long as you understand the concepts, you understand generally what’s going on, the Courts have typically been fairly lenient and they won’t go so far as to suggest that the individual didn’t know and understand. So we say to our clients, though, having said that, the problem is this: what if you truly didn’t know and understand? And what if the corporate machinations are so complex, or, that the very fundamental effect of the corporate dealings had such a dramatic tax impact on death that you didn’t understand that? Does that drive into this possibility that the Will is not valid? And that is really what we want to highlight today. And the short answer is, yes. The Courts will start to say, well, wait a minute. Did the deceased understand that by putting a corporation, establishing a corporation this way, would result in a tax over here that would then affect another beneficiary that maybe that deceased didn’t understand. And a classic example is that, in Ontario and Canada throughout is that, RRSPs, and that illustration really demonstrates what a knowledge and approval could be in a situation like that.

Suzana Popovic-Montag: And the key of course, is the fact that you can’t give something away that you don’t own, but you need to know what you own before you can decide how you want to give it away and to whom.  And so to be able to demonstrate that this was, in fact, the case, is maybe quite important in these situations. And of course, that just leads me to think to the evidential difficulties that arise in proving ownership or what someone thought they owned or understood they owned. And again, that comes back to some of our previous discussions, Ian, where that is a difficult thing to establish in some circumstances, so we’ve got to be ready for it.

Ian Hull: Absolutely. And where these things start to get balled up and mixed up is that if someone does a classic estate freeze, where they have a company and they’ve developed it, and they get to the point where they say we want to freeze the tax liability there and then we want to put all of the growth into the hands of my children, and let them enjoy the growth. That’s the classic estate freeze, and we won’t get into great detail today, but one worthy of its own podcast or two. That scenario may well not have been fully understood by the deceased. The deceased may not have understood that impact and then, it might have an impact on and drill down on this whole question of whether or not he knew and understood the nature and effect of his dispositions.

Suzana Popovic-Montag: And in the right circumstances, it really can have a snowball effect, and that’s something that we certainly will try to keep in mind when we’re talking with clients about these kinds of situations.  

Ian Hull: So it seems to me that we’ve tried to answer hopefully the question of, well, why are you bothering getting into an inquiry which could be cumbersome, it can be voluminous. I mean, you talk to people who get into these situations and they’ve established a corporation 30 years ago. You’re looking at the possibility of having to look at corporate records over 30 years. You’re looking at the possibility of talking to the accountant about corporate records over 30 years. Now that may be an extreme example, but if you have multiple corporations and so on, it adds a layer of complexity, when we talked about that intense investigation stage. This adds a layer of complexity. And it comes back to this point that often our clients will say, give me a budget. Tell me how much this is going to cost me.

Suzana Popovic-Montag: That’s right.

Ian Hull: And it’s very difficult when you have corporations. So we will tell our clients: (a) we think we have to look into it, at what level depends on each fact of the case; and (b) we’re not going to promise you that a quick review of the minute book is going to be sufficient. Because it can undermine the whole question of testamentary capacity which is the cornerstone of a significant percentage, I would say higher than 80% of Will challenges, are fundamentally based on the allegation that the deceased did not have testamentary capacity. We’ve talked about the other prongs of attack, but the testamentary capacity tends to be the strongest and the most forcefully pursued element, and so the corporate aspect of it is an important element as well. 

So, during our next podcast, what we’re going to talk a little bit about and we’re going to kind of go sideways, I think, but I think it’s a worthwhile time to, as we set up the types of claims that can be made and we talk about the types of claims that can be made. We’re going to talk about some of the claims that are made concurrent, or at the same time as a Will challenge, which, the old adage is, throw mud at the wall to see what sticks. Well, we don’t really typically, we don’t encourage our clients to throw mud at the wall and see what sticks strategy, because sometimes that bounces back.  But you also want to consider what other claims and we’re going to talk about quantum meruit claims, we’re going to talk about proprietary estoppel claims, things like that, that add more sauce to the gravy.

Suzana Popovic-Montag: That’s great, Ian, I look forward to our next podcast. Just a quick reminder, of course, to our listeners, please feel to call and provide us with any feedback or any comments you might have, on either the video format or the audio portion of our discussion today. Our number is 206-457-1985. 

Ian Hull: And of course as I remember, please e-mail us at hullandhull@gmail.com.

Suzana Popovic-Montag: Thanks very much, Ian.

Ian Hull: Thank you.

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.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 7

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

They discuss fraud as one of the most serious ways in which a will can be challenged. Evidential requirements are important when allegations of fraud or forgery are made. Handwriting analysis and other scientific means of determining the legitimacy of evidence can be employed to determine whether or not fraud has occurred. Ian and Suzana also talk about lack of proper execution being grounds to challenge a will.

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 7 - Hull on Estate and Succession Planning - Podcast #132

Posted on September 30, 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 #132 of our podcast on Tuesday, September 30^th, 2008.

Ian Hull:  Hi, Suzana.

Suzana Popovic-Montag: Hi there, Ian. How are you?

Ian Hull: Just terrific, thank you. I’m looking forward to today’s podcast and videocast because it touches on one of the areas of the Will challenge process that I find somewhat intriguing and probably the most intriguing. We finished our last podcast talking about the issues, the core central issues, well we really spent the most of our last podcast on undue influence. Today, let’s wrap up these issues as best we can in terms of the legal issues, and let’s talk for a minute, as we said in our last podcast, it’s not worthy of a lot of attention because there’s so few cases that deal with the question of fraud. But the one area where it does get dealt with is fascinating.

Suzana Popovic-Montag: And that’s when the allegation is that the Will that’s actually being put forward was not, in fact, signed by the deceased, so that it was essentially forged. And that allegation of fraud is one of the most serious allegations you can make at law. And so Ian has said in our earlier podcast we, as counsel, are very, very careful in advising clients whether or not to pursue this allegation because once you make it, there are serious consequences associated with that allegation.

Ian Hull: And those are, of course, that if you’re wrong, you could be exposed to every cent of the cost in the process. And judges come down very hard on you if you allege fraud and don’t prove it. So that’s hovering around, and that’s a big part of why fraud is not used because the judges in Will challenges aren’t as rough on you if you’re alleging undue influence and capacity in the costs context. But the forged Will is one that does come up from time to time, and there is a fairly easy way to deal with it and one that, as I say, is fascinating, because if you read these reports, it’s like magic. And that is, is that you can get handwriting analysis done. So you get the Will, the client comes in and says, look, my dad was not well, but more importantly, there’s no way this is his signature.  So one of the things we would do is, is that maybe even before we allege the fraud, we would move fairly quickly if we could get a copy of the original, to get a report from a forensic, and one of the great ones, Diane Kruger, who is one of Canada’s leading experts, and Brian Lindbloom, is another Canadian expert in this area.  We get an expert opinion as to whether or not that’s the valid signature of the deceased. And how they do it is kind of a neat process, and the first steps that we take to do that.

Suzana Popovic-Montag: And it’s a really scientific process that’s based on comparison with other original signatures.  And so when we’re talking, and we’ve talked in previous podcasts about this intense investigation stage, one of the things that we may be looking for if the allegation is, in fact, a fraud or forgery, is for documents that bear the testator’s original handwriting, their signature and other ways that we can demonstrate that this was the way that someone would typically sign something or that someone would write something.  And those kinds of evidential requirements are really important when you make these kinds of allegations.

Ian Hull: And so when you come into this, and where you’re looking at it is, this is the homework that we’re going to impose on the client. They want to make that allegation, we’ll typically say, okay, go back and seek out signature specimens.  And these experts will typically say we want specimens that are time specific. They will say as close to the time that the signature of the Will was made, because as we know, elderly people, and all of us, our signatures change over the years, so the more current, the more effective the evidence is. And this really, this evidence can really explode a law suit and, obviously, the question of fraud is a tremendous emotional question as well.  So whatever we can do at the outset to deal with it quickly, get lots of good specimens and get the opinion out of our expert, and get a good expert, is another sophisticated level that we can take this. 

Now Suzana, let’s talk for a minute about that possibility that we can’t get at: (a) original specimen signatures; or (b) we can’t get access to the original Will because the other side’s being difficult.  What do we do then?

Suzana Popovic-Montag: Well that’s another situation with another level of possible litigation where you’re going to have to possibly consider bringing a Motion before a Court, in order to have the authority to compel the individual with the original Last Will and Testament to bring it into Court, so that you can have the opportunity to provide that and any other specimen signatures to the individual who’s going to prepare your report for you. And that, you know, when we talk about these extras, or the bells and whistles to litigation, sometimes these steps will arise. We could never predict that we would have such a difficult time getting it, but there are mechanisms that we can, fortunately, turn to in order to be able to get this for our clients.

Ian Hull: And this is sort of a procedural side show. And there’s orders for assistance we can get for a lot of different relief that we’d want, and we’re going to talk about those orders for assistance at a different podcast. But, you’re right, Suzana, if there’s a mechanism available, it’s an additional cost, delay, it’s another part of the battle, but it can be done. So, we’ve wrapped up the question of fraud which is the classic scenario. There’s obviously other areas where fraud is pursued, but that’s the classic one.

Let’s just take a minute now to look at the question of lack of proper execution. Not because, we haven’t ignored it because it isn’t important. In fact, this can be the fatal blow. And why do I say that? Why do I say this could be the fatal blow, Suzana?

Suzana Popovic-Montag: Well, again, Ian, just because it’s one of those grounds. And if you can demonstrate that a Will is not a valid testamentary document, then the game’s over.  The Will challenge is over in the sense that that document is set aside so you’re looking to either a prior Will or possibly an intestacy.

Ian Hull: And we love the fact that these podcasts are listened to all over the world and all across Canada, and so we try to, whenever we can, be fairly global about what some of our comments are and where the law trends are going. And one of the trends with lack of due execution in Ontario is there was some case law bouncing around over the last 10 years, but it’s come down pretty clear that the terms of the Succession Law Reform Act must be followed. You must have two witnesses in the room at the same time when the individual signs it, no excuses, no what they call substantial compliance. There’s no way of getting out of it. The alternative, of course, is in some of the other jurisdictions and that is, the question of substantial compliance.

Suzana Popovic-Montag: And that really is the key, because what had happened in Ontario is that the judges were recognizing the fact that in other provinces in Canada, sometimes Wills were being allowed to be probated or were being upheld by judges when there was perhaps only one witness or when there was some other form of less than perfect compliance with the legislation. So, substantial in the sense that close enough was good enough in those jurisdictions. But our Courts here in Ontario have come down quite strongly on the fact that no, we have legislation, it provides for specific requirements, and those requirements have to be met if a Will is going to be valid here in Ontario.

Ian Hull: Manitoba’s an example of a substantial compliant province, and there are others as well, so it’s worth exploring because the different jurisdictions approach it differently. But, it’s a mandatory compliance rule in Ontario.  It’s a full stop if the Will hasn’t been executed properly in most situations. There are some variations on every theme, any time you put an absolute, you’ll have a judge to say, wait, there’s no absolute. But it’s an important issue to always check off on the checklist, that we always do with our clients. 

So, those are the sort of five important areas of attack, and there are more, and there are other strategic steps that we want to consider, now that we’re into the Will challenge process. We are into the litigation. We’ve talked enough about process a few podcasts ago.  We’re into it, and these are the kinds of strategic and legal considerations we’re going to start to make. And we’ll talk about some of the other ones in our next podcast. So, thanks very much, Suzana.

Suzana Popovic-Montag: Thanks to you, too, Ian. And just a reminder if anyone would like to send us some feedback, feel free to send us an e-mail at hullandhull@gmail.com.

Ian Hull: And our call-in number - 206-457-1985. Thanks very much for listening.

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.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

They continue to discuss the value of the discovery process and intense investigation. The goal is to get to the mediation process as soon as possible. New evidence may lead to the next stage: the pre-trial. Ian and Suzana talk about the pre-trial process and what you can expect during this stage.

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation Part 4

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

They continue to discuss the value of the discovery process and intense investigation. The goal is to get to the mediation process as soon as possible. New evidence may lead to the next stage: the pre-trial. Ian and Suzana talk about the pre-trial process and what you can expect during this stage.

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 4 - Hull on Estate and Succession Planning - Podcast #129

Posted on September 9, 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 #129 of our podcast on Tuesday, September 9^th, 2008.

Ian Hull:  Hi, Suzana.

Suzana Popovic-Montag: Hello Ian.

Ian Hull: So we’ve swiftly moved out of the summer into the early Fall and we’re going to continue to work through this Will challenge discussion and the process itself.  In our last podcast, we talked about the concept of when we will go to discoveries and when we will go to mediation, what mediation is, what are discoveries. And working from our flowchart, I think it’s worth emphasizing the intense investigation stage is so crucial. If we can get a good flow of information from obtaining a good, broadly comprehensive order for directions, and we can get the three corners of a law suit and a Will challenge, get the lawyer’s notes, assess it, analyze it, depending on whether you’re defending or challenging the Will. The second part, medicals, get as much of the medicals as possible. And the third component, chase down the lay witness evidence. Chase down the witnesses, what the neighbours and friends and priests and so forth are going to say. 

So, if you can do that, and you can really, this is a bit of a heavy loaded stage in the law suit. This intense investigation is where this branches out into really settlement, all out war, how we’re going to manipulate the process in that sense. And that’s why it is such an important question: Do you go to mediation or do you go to discoveries? The right cases you go to discoveries or depositions right away, because what has come out of this intensive investigation are really good questions that you want to explore. And an easy example is when your case is very light on medical evidence and lawyer’s notes. The lawyers are saying, yes, say you’re challenging. The lawyers are saying, yeah the deceased knew what he was doing.  And the medical evidence is light, because the deceased, although you think was completely out of it, wasn’t someone who went to doctors and just historically didn’t have that kind of record, that third party record. But, the third party witnesses, friends and neighbours who he went to church with, and those kinds of things, you’re really confident in challenging this Will, will all support you. 

So one of the tactical moves you might consider then is to go to discoveries in the situation like that where you need to really develop your case. Because there’s two ways you develop your case: 1) through third party evidence, which I’m talking about, doctors and lawyers, and they kind of fall into place; and 2) from others and yourself.

Suzana Popovic-Montag: Now maybe, Ian, you could just spend a moment and explain to us why a discovery process is different, or what additional information you could try to get from lay witnesses from just perhaps interviewing these individuals that you’re suggesting.

Ian Hull: Well I think it’s a good point, and I’m not sure I can. I mean I think the interview process is probably as comprehensive as I need. What I’m thinking of is that when I move from the intense investigation and I decide to go to discoveries, it’s because I need to go, I need to take a real run at the challenger or the propounder, and I have a whole pocket full of evidence in contradiction to their position. So that maybe I rattle the challenger or maybe I don’t, but I’ll have taken that active step to really do a bit of a strategic shake-down.

Suzana Popovic-Montag: And from a lawyer’s perspective, and one of the things that discoveries really helps us with, whether we’re discovering the other side or our client is being discovered, is assessing how that individual is going to act as a witness in the actual trial. And there’s a lot of value that can come out of this whole process if you can see how your person stands up under, you know, the bright lights of the camera, so to speak.

Ian Hull: That’s good. So, keeping in the bright lights, my personal view is, discoveries is a low percentage game in most cases, but we didn’t want to sort of gloss over it. We don’t want to sort of pretend that this can be ignored and should be ignored. It is an important either tactical or evidentiary stage in the process in the right case.  But, if you want to come back to what is, I think, the more effective practice, that is get to mediation as soon as possible.  Because these cases are more often about emotions than they are about definitive facts, and as we’ve said before in podcasts, we’re never going to know the answer, the true, true answer.  And mediation offers us such a tremendous cost-effective way to get to the nub of the case quickly and efficiently. 

But let’s keep on with the process because presume we don’t pull it off. We don’t settle this case or the discoveries bring out great new evidence that is going to affect this case and we’re going to keep moving forward. The next stage certainly in Ontario, it’s required, and almost every jurisdiction that certainly I have ever been involved with insists on it, is a pre-trial.

Suzana Popovic-Montag: And what a pre-trial is, is an actual meeting where the parties meet with a judge, a pre-trial judge, who’s going to maybe once again try to settle this matter, not quite as in the mediation format, but certainly in that kind of an instructure without as much formality as you would have at a trial. So this individual is going to hear the parties, he’s going to read briefs that are presented, he’s going to meet the individuals and then assess the likelihood that one side or the other is going to win.

Ian Hull: So this pre-trial judge is, the importance of this is that you’re often looking to that person to give you their gut call. Now they won’t have had a chance to hear all of the evidence, but they’ll have read the brief, they’ll understand the case, they’ll have their own experience because they’ve sat on the bench or they practiced law and now are sitting on the bench, they have their own experience in terms of likelihood of success. And it can be really effective if we’ve got a good interaction with a judge that’s prepared to give, sort of, their views in that regard.

Suzana Popovic-Montag: And the pre-trial process really underscores how important the system itself believes that the parties try to settle their own case. Because in a Will challenge we know, Ian, that when it gets to trial there’s going to be one winner and one loser. And at the end of the day with cost consequences factored in there, you know, we even wonder if the winner is, in fact, a winner. So the fact that there’s a requirement for pre-trial and in many jurisdictions also a requirement for mandatory mediation makes us realize that this probably is the best way to try to solve the matter if, in fact, it can be. If not, then of course, we can move on to the next stage.

Ian Hull: And the next two stages we’re going to talk about fairly briefly today, because, one of them in and of itself probably is its own podcast. The next stage of course, is if you don’t settle it, is you go to trial, where you get your day or days typically in Court, in front of a judge. In Ontario, they’re typically in front of just a judge. We don’t have juries with Will challenge cases, the statute actually essentially prohibits it. But, in lots of jurisdictions there’s also Will challenges with juries itself.   So we have the trial itself where we get witness in the witness’ boxes and doing all of the things that are normally done on the typical law and order kind of style trial. So there’s no magic to the trial itself, but we’re going to talk in another podcast about how we get ready for trials, for two reasons. One is that it’s helpful to talk about what you have to do but secondly, get another sense of something that is overriding this whole thing and that is, the big terrible word called costs. And the costs of all of this process can’t be ignored. So the trial obviously is, we’re into having created tremendous costs and tremendous costs to complete. So the last stage…

Suzana Popovic-Montag: And I think just to end on that, Ian, the last stage is the appeal process, because even though you’ve gone through the trial, you’ve incurred these tremendous costs that Ian just mentioned, there’s no guarantee that that’s the end of the process, because the losing side can always have the option of choosing to appeal. And here in Ontario, there’s two levels of appeal, you can appeal to the Divisional Court, sometimes you’re required to appeal directly to the Court of Appeal, and then of course if the matter is appealed, it’s heard and that result is not liked, the ultimate remedy is to appeal to the Supreme Court of Canada.

Ian Hull: All of which is delay, costs, all of it, really difficult things that you have to suffer through with litigation. But, let’s end on a happy note. That’s the process and we like to go through this with our clients so people know from start to finish generally what is going to happen. So, thanks very much, Suzana.

Suzana Popovic-Montag: Thanks to you too, 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.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 3

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

They discuss what happens during the Discovery process and explore what Mediation is and how it works. Will challenge proceedings can benefit greatly from facilitation during the litigation process.

To see the video version of this podcast, you can also download it from iTunes or watch it on YouTube on the Hull and Hull channel: http://www.youtube.com/HullandHullLLP

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Will Challenge Litigation - Part 2

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

They cover how a comprehensive preliminary investigation can help litigation and discuss how a motion of claim is filed to set the stage to move forward with a trial.

Core documents that accompany these stages are:

The next stage is the discovery process and will be the topic that gets next week's podcast off to a start.

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 2 - Hull on Estate and Succession Planning

Posted on August 26, 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, and some of you may be watching, Episode #127 of our podcast on Tuesday, August 26^th, 2008.

Hi there, Ian. 

Ian Hull: Hi Suzana.

Suzana Popovic-Montag: How are you today?

Ian Hull: Just great, thanks.

Suzana Popovic-Montag: That’s good

Ian Hull: Looking forward to our second attempt at the video casting combined with the podcasting. So we want to turn back to this whole Will challenge process. And in our last podcast, we were talking about situations where people come to see us where they feel that they have been left out of the Will or those who come to see us who want to uphold the Will. And today we’re going to talk about the process itself. Now, we ended our last podcast talking about Will challenges in the context of what were the importance of the testamentary documents, what were the Wills and why we needed to get them under control. Today we’re going to talk about the process, the litigation process. Now interestingly enough, while we practice in downtown Toronto in Canada here, the process itself is generally very consistent throughout different jurisdictions. And so what we want to talk a little bit about today is the global litigation process. And for those of you watching, we’ve got our Smart Board up and running and we’re going to spend some time walking through our chart that we find very helpful with our clients to talk about the process itself.

Suzana Popovic-Montag: And the very first step for those of you who can see it is the preliminary investigation stage. And this is where we try to find the basic known facts. And during our last podcast, we talked about things like developing the family tree, developing and understanding of the background of who the deceased really was, what their life was like, what the circumstances surrounding his or her Will making was all about. And so this is where you start in the whole process by getting the story, getting an understanding of the players and then we take it to the next level.

Ian Hull: And so we’re working through our chart here. We’ve started with our preliminary facts, alright. And the investigation into this. Now this stage has to be done fairly comprehensively. We want to get the information at the outset, but we’ll need to then go back and do some digging. And sometimes follow-up with witnesses or get a better sense of the type of evidence that’s out there. Because again, with a Will challenge, we’re mostly focusing on questions of capacity, questions of undue influence, pressuring the elderly person or the person who is doing the Will to do something that you may or may not think they should be doing. 

The next step is setting the stage for the litigation. Now here in Ontario, we typically do it by way of a motion. But it doesn’t really matter. What happens in all jurisdictions is that the claim gets commenced, either by a Statement of Claim or a writ or some document that’s filed with the Court that starts the process. And as I say, in Ontario, we actually bring a motion, we go to the Court and set the stage, setting out what legal issues are at stake in the process.

Suzana Popovic-Montag: And, of course, the ultimate goal of a motion for directions is to obtain an Order giving directions. And we tell clients that that really is a map work of the litigation process, it gives the timelines for when things will be done, it gives authority to individuals to collect some of the documentation that is crucial for a Will challenge and it most often deals with vesting someone with authority to deal with the estate, pending the entire litigation process.

Ian Hull: So we’ve got a couple of things here. Because if we remember, when we started this litigation, it actually stops the administration of the estate, it puts everything on hold. So that’s no good. There’s bills to be paid, the funeral expenses, there’s things to be done that have to be done no matter who wins or loses this lawsuit. So at the motion for direction stage, getting the Order, one of the things we get and we’re going to come back to, is that you talk about who has the authority. We’re going to talk about what we call here in Ontario an estate trustee during litigation. But before we come to that, Suzana is going to talk about that, is I just want to mention that at this Order we will get, let’s talk a little bit about what we’re going to get at that Order. And that Order, we’ve already said, is going to set the stage, who’s challenging the Will, who’s defending the Will, and all those with a financial interest are put on notice. It also gives us expansive roles of an ability to get documents organized, to do investigation. Coming back to this, we talked about the preliminary investigation. But we can’t do a preliminary investigation properly without getting some of the core documents.

Now Suzana, what are some of the core documents that we’d be looking for at this disclosure stage at this point?

Suzana Popovic-Montag: Well typically, Ian, those documents will include three different types of information or evidence that we’re going to try to get so that we can establish our Will challenge and proceed with it. Firstly, there’s the medical records; secondly there’s the solicitor’s notes; and then thirdly, there is in many cases the financial disclosure, the financial records that will help build a Will challenge case as well.

Ian Hull: So in the course of getting this Order, we will want to have as expansive as possible, so that we can pull in as much of the relevant documentation as we can. And we’ll often take sort of a three year window, going back three years, maybe going forward three years, in that range. Now sometimes each case is different, but we’ll go back and get all of the medical records of the individual, especially if we are alleging capacity and so on. So now let’s talk about, so presumably we can get together all of this documentation. Once we get the Order, we send it to these third parties like hospitals and we had a case recently we sent them to the dentist because this gentleman had seen a dentist many times right around the time of the Will. You wouldn’t always think of that individual as being someone to be involved with. 

So once we get the disclosure organized in the Order, the other thing you mention Suzana, was the appointment of someone with authority, and which we call an estate trustee during litigation. But forget our terminology, it’s someone who has authority, a litigation trustee is essentially what happens.

Suzana Popovic-Montag: And the reason we need this individual is because as Ian just said, as soon as you start a Will challenge, the administration is essentially frozen. So you are actually challenging a Will that may or may not appoint an executor. And as soon as you do that, then that appointment is in question. So we need to vest someone with authority to act on behalf of the estate in the meantime, and that’s this litigation administrator.  The old terminology used to be just an administrator, an individual who can act on behalf of the estate.

Ian Hull: Okay, Suzana, the tough question is though who will take this job on and on what circumstances do they typically take it on?

Suzana Popovic-Montag: Well that’s a good question, Ian and it’s usually a very contentious one as well because in many situations, the person who has been named will try to hold onto their job as the executor. That may or may not work, depending on how contentious that appointment is and the Will challenge itself. There’s always an opportunity to have a neutral third party put in, and that really is based on the cases that have been resolved out there, that’s the Court’s preference. To put someone in who has no vested interest in it but will administer the estate during the course of the litigation.

Ian Hull: And often that entity is a trust company. We see that a lot of times because they are professionally trained and ready to step in. Professionals: accountants, lawyers, they can sometimes come in depending on the pricing and things like that, depending on the kind of assets. We had an interesting case where we had a tremendous piece of real estate that needed to be developed, it required someone with real estate expertise, development expertise. So all the parties sat around and said well, we’re not sure who’s going to get this, but we do know that we want to sell it and we need someone well qualified to sell it, we can’t just put it in the hands of just anyone. So those are the kind of choices you have.

Alright, we’re going to talk now about discoveries. And that is the next stage before we wind up this podcast today. And that is the process where you make a real strategic call. We’re going to talk about discoveries in mediation, what the best steps are to take and when to take them, and investigate into that sort of, those important timetables. But we’ll save that for our next podcast. 

Thanks very much, Suzana.

Suzana Popovic-Montag: Thanks to you, too, 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.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Listen to Calculating Compensation

This week, Ian and Suzana discuss the number of emails they received last week about cross-reference analysis and compensation. Ian references 5 cases that are important to this subject:

1. Logan vs Laing - Ontario Court of Appeal
2. Toronto Railway Trust
3. Re. Knoch (1982)
4. George William Trust
5. Re. Jeffrey

They explain and continue talking about calculating compensation and how to audit the claim for 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.

Calculating Compensation - Hull on Estate and Succession Planning Podcast #124

Posted on August 5, 2008 by Hull & Hull LLP

Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #124 of our podcast on Tuesday, August 5^th, 2008.

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag, that will provide information and insights into estate planning in Canada. From the offices of Hull Estate Mediation in Toronto, Ontario, Canada, here are Ian and Suzana.

Suzana Popovic-Montag: Hi there Ian, how are you?

Ian Hull: I’m great Suzana, how are you doing today?

Suzana Popovic-Montag: I’m great thank you.

Ian Hull: Super.   Well listen, please, feel free to give us an e-mail at hullandhull@gmail.com.

Suzana Popovic-Montag: Or feel free to give us a call at our direct line, 206-457-1985.

Ian Hull: Alright Suzana, well I think I managed certainly to confuse some people on our last podcast because I had three e-mails come in talking about what the heck I was getting at in this cross-referencing and maybe I got a little case law heavy in the last podcast. But we’re going to make sure that the show notes will reflect the cases that we’re talking about. But there really are only four cases, and it’s the Re. Laing decision. There’s a case called Toronto Railway Trust that we’re going to talk about. There’s a case called Re. Knoch and there’s a case called George William Trust. Those four cases, the references are in the show notes. But the important thing I think was, and we’re not going to rehash on pre-taking because that part, all three e-mails seemed to be quite clear that that wasn’t the problem. But there was some confusion about what we’re getting at with this whole Re. Laing analysis. And I don’t necessarily recommend to have to read the case but it is a phenomenal decision because what it did was, it gave us what we now identify as the cross-check. The balancing act between the five factors in the Toronto Railway Trust case versus the, you know, we call it a tariff, you know, whatever you want to call it. It’s the same as what real estate agents charge. You get the commission. It’s probably the nicest way of putting it. There is a commission that you get when you are an executor, that’s a general rule and that’s generally 5%. We talked about the plus or minuses and all of that. 

So what Re. Laing said to us was first of all, take the commission seriously and don’t come to the Courts looking for us to adjust the commission unless you have got a good reason, it seems to me. And what they did was they relied on…sorry I did say four cases; there is a fifth case because the cornerstone part of the whole decision was Re. Jeffrey and that was a decision of Mr. Justice Killeen. Again, coming from the great town of London, Ontario, just like the George William Trust, we have some wonderful judges down there. And Justice Killeen was the guy that came out with this whole cross-check, cross-reference analysis, and brought certainty to the process of how we calculate compensation at a level that, quite frankly, for 50 years, has been unmatched because when I first started practicing law, the biggest area of contention with this type of passing of accounts issue was passing on compensation, and fighting over compensation. Because of Re. Laing in part, most of the time you’re not into those battles anymore because of the clear message that Re. Laing, Re. Jeffrey says and that is here is your formula and by the way, don’t mess with the commission unless you’ve got a good reason. That seems to be generally the approach that the Courts are taking. Now obviously that’s a general statement. Every case is different and the Re. Laing decision allows us to look at that difference because it talks about these five factors: the time, the skill, the care, the type of assets that are under administration, how much you are administering. All of those real life practical factors get dovetailed into and looked at against this commission. And is the commission excessive looking at those factors?

An easy example is, and it was a case that we see a lot of the time and that is, someone dies, they’ve got $20,000 in GIC, they’ve got $200,000 in a RIF and they’ve got a checking account of $16.00. They die, you go to administer that estate, you look at the size of the estate. You look at how hard it was. Well, the GIC and the RIF are, you know, pretty easy administration in terms of that. But on the face of it, you might say the commission is too high. But what we see from time to time is, here’s a great thing you throw into the hopper on that example. When you just really think that you should reduce the commission because it looks like a straightforward case, you throw in the analysis of what if this person did file tax returns for 10 years? Just because, you know, they got old and they just wanted to buck the system. Well, you throw that little factor in, all of a sudden the commission looks a little modest because you’re going to have to retain counsel, retain the tax advisors and so on to solve that problem. On the face of what looks like a straightforward administration, maybe you should reduce the commission, like you might do in a house sale situation where someone will come around to the agent and they’ll say look, I’ll do it for 1% less than my next-door competitor. But you’ve got to look at, the Courts have said, you’ve just got to look at the situation case by case.

Suzana Popovic-Montag: And it really is a matter of big picturing, Ian, it seems to me because as you say, it could, on the face of it, look like a simple thing but once you dig deeper into the administration, there is all of these complexities that might not be evident on the face of a set of accounts. So it helps with, as we’ve talked about in the past, keeping detailed records so that when you have to justify the work that has been done, you can point to the proof of the fact that it’s been done and to what extent.

Ian Hull: Okay, so now let’s just talk about, now that we’ve figured out the formula on how to calculate compensation, let’s just make sort of a mini checklist on what we also would look at again to audit properly the claim for compensation. And that is what this is all about. We’re auditing the claim and we’re determining whether or not the claim for compensation or the commission sought is justified in the circumstances. So we’ve talked about the big picture, the formula, the cross-check formula.

Now let’s just go through a couple of other items that you might want to add to your checklist that are easy hits or easy issues to consider when auditing the compensation.

Suzana Popovic-Montag: And the quickest one that comes to mind, of course, is what we’ve talked about in the past, is just like very large receipts or disbursements that are paid during the course of an administration. For example, that big RIF account of $200,000; other large bank accounts or insurance policy proceeds. Those kinds of things that are ear-marked and big sums could be ones to which you might argue a lesser percentage or commission should be applied.

Ian Hull: And another example would be are there actual deductions, are there proper deductions for issues that, items that just shouldn’t be compensated on. For example, one might be when you pay yourself a gift. So the executor gets a gift under the Will. That you’re not allowed to put into the mix to calculate compensation.

Suzana Popovic-Montag: Another common deduction that we see, a proper deduction is when there is a transfer between bank accounts. Trustees will occasionally take from one bank account, put into another, the estate bank account for instance, and then pay things from there. So those kinds of transfers are not normally compensable.

Ian Hull: Another area is, you know, you want to look at net losses on investments. It’s another area to consider which are not typically compensable.

Suzana Popovic-Montag: And another flashpoint that we see a lot of is when there are legal or accounting fees that are paid to firms to which the trustee is a member of.   So when the trustee is acting and looking for compensation pursuant to the tariffs and guidelines that we’ve talked about and also looking in addition for legal fees and accounting fees, then those kinds of things need to be looked at carefully.

Ian Hull: A classic deduction that can be made is looking at the question of care and management. And the question of care and management can be a big ticket item. When we talked about this formula, if you look at the formula and when you calculate care and management, you’re entitled to, if compensation and a commission should apply here, 2/5ths of 1% on the annual value. So if you do that over a five year period, that number can add up, regardless of the size of the estate. That’s a significant commission so to speak that you can charge. Now one of the easy questions that you could ask yourself when you look at this, and we always start by looking at our Will or trust that we’re looking at before we start to audit these accounts, is, is this a proper case for care and management? Or is it an immediately distributable estate? And I mean, immediately distributable that on death, within the year of death, you’re supposed to generally be able to distribute the estate with only a holdback for liabilities such as taxes. And if it is an immediately distributable estate, unless you have a pretty good reason, the Courts get a little grumpy about paying yourself care and management in those situations.

Alright, so really from our standpoint, the last podcast we’re going to do on this whole accounting question before we go back into some more administration issues, is going to be talking about the delineation between executor’s compensation and professional work of a lawyer or an accountant. And that is worth, I think, at least one podcast and we’ll fit it into one in our next one because that distinction is an important deduction. It can actually turn out to be a significant deduction on compensation so therefore an important audit item that you want to make sure you’ve got a handle on but one that there is no hard and fast rules on. And so we want to spend some time on our next podcast talking about deductions for compensation that arise out of the delineation between the role of executor and the role of the professional, for example, the lawyer or the accountant.

Suzana Popovic-Montag: Well, that’s great Ian. Thanks very much. I just want to remind our listeners to feel free to give us a call with any comments or questions they might have at 206-457-1985.

Ian Hull: And e-mail, of course. We enjoy receiving them and we’ve had a good barrage of them over the summer, hullandhull@gmail.com. And we welcome your comments, questions or thoughts.

Suzana Popovic-Montag: Thanks very much Ian.

Ian Hull: Thanks Suzana.

You’ve been listening to Hull on Estate and Succession Planning with Ian Hull and Suzana Popovic-Montag. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

To listen to other Hull On podcasts, or to leave a question or comment, please visit our website at www.hullestatemediation.com.

Our theme music is UpTempo14 by Gary and is courtesy of the Podsafe Music Network.

/mem

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Issues Causing Delay in the Granting of Probate - Hull on Estates Podcast #104

Posted on April 1^st, 2008 by Hull & Hull LLP

David Smith: Hello and welcome to Hull on Estates. You are listening to Episode #104 on Tuesday, April 1^st, 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: Good afternoon. I’m meeting today with Sarah of my office.  Hello Sarah.

Sarah Fitzpatrick: Hi, how are you today?

David Smith:  Good.  And again, this is David Smith and I’m with Sarah Fitzpatrick.  And today, Sarah, we thought we would talk about issues causing delay in the granting of probate.  And what exactly are we concerned about here?

Sarah Fitzpatrick:  Well, with respect to some of the recent podcasts done by Ian and Suzana considering the process in obtaining Certificates of Appointment for Estate Trustee, we thought it would be useful to consider ways in which to avoid the delay.  Delays are notorious in many estates Courts and it can often be very difficult to obtain probate without having your application sent back for rectification.  So we thought we’d just canvass some of the ways, just practical ways in which you can, when drafting your application, try and avoid some of those delays.

David Smith:  And Sarah, I mean, what’s the concern in terms of delaying the receipt of probate?  If you can’t get probate, what does that prevent you from doing?

Sarah Fitzpatrick:  Well often the estate trustee is anxious to obtain the probate so that they can go ahead and administer certain assets.  And in certain Courts, probate can be granted very quickly, within, for example, a week.  But in other Courts, it can take up to 6 to 8 weeks.  And if, for example, there may be a transfer of property pending, or other assets that need to be administered, delay can seriously jeopardize the ongoing administration of the estate.  So it is important to get your probate as quickly as possible.

David Smith:  Alright.  And you touched on this at the beginning, but probably just as an aside, we should point out that we are podcasting today on Hull on Estates.  Our sister podcast is Hull on Estate and Succession Planning.  And as you’ve pointed out, Sarah, there is a couple of recent podcasts which have been done by Ian Hull and Suzana Popovic-Montag, that touch on some other issues relating to the obtaining of probate.  Again, our focus today is on delay.  So what can cause delay in the obtaining of probate, and what should we consider in the 10 minutes we’ve got today?

Sarah Fitzpatrick:  Most likely the most common error that is sent back for rectification is the names.  The Court insists on total uniformity of names in the Application documents, which means that in your Application, in all of the documents that are required in the Application, there must be total uniformity of the names.  They must be referred to the same throughout the Application.

David Smith: Now Sarah, as a litigation lawyer, I obviously don’t run into this issue quite often that often, and part of the reason you’re obviously podcasting on this issue with me is that in your practice, you do do this sort of work.  To what extent can you comfortably delegate any of those reviews to support staff?  Is that something you can delegate or do you need to do that yourself?

Sarah Fitzpatrick:  Absolutely, certain of the…you know, the Application, can certainly be filled out by clerks that are knowledgeable in this area.  However, it is important to review everything.  Again, errors are very common and not only is it good just to have a second set of eyes reviewing the Application, but again it’s…the Court does insist on uniformity in all of the Application documents and it’s important to review them, the solicitor in charge of the file as well.

David Smith:  And ultimately you, as the solicitor, are accountable for that, right?

Sarah Fitzpatrick:  Exactly, that’s right.  But, for example, with respect to using the same names throughout, often what you’ll find is that the Will may refer to the deceased by a certain name, but that many of the assets are actually registered in a different name.  For example, the Will might be the estate of James Smith, but many of the assets are registered in the name of Jim Smith.  So the Application actually provides in two different lines where you can actually state “in the estate of James Smith” and then there’s a secondary line down below, where you would need to put “also known as Jim Smith”.  And the important issue here is that not only do you need to address that issue in the actual form of the Application, but this needs to be consistent throughout all of the Application documents: the Affidavit, the Certificates.  Everything does need to have that “in the estate of James Smith, also known as Jim Smith”.  And they will send it back if it’s not exactly correct everywhere.

David Smith:  And, of course, if it’s sent back and you’re acting for the executor, is there an obligation to advise the beneficiaries that there has been some delay caused through any kind of inadvertence?

Sarah Fitzpatrick:  David, no, there’s no obligation per se to advise the beneficiaries of the estate.  It may be just a matter of practice.  Certain solicitors can certainly advise, but I wouldn’t say that’s typical practice.  But the errors are so frequent that it would not be unexpected for this to happen quite frequently.

David Smith:  Right, and I guess the only reason that sort of occurred to me was just again wearing my litigator hat, if you’ve got a contentious relationship between the executor and the beneficiaries, obviously you want to perhaps communicate any deficiencies to the beneficiaries, if there’s any…if it’s particularly acrimonious.  Sometimes my practice is even if it’s over the top, you advise them of every single delay, just so that they know that things are being done.

Sarah Fitzpatrick:  Right, well certainly just on that, in terms of advising beneficiaries, one issue is the Notices.  And that’s another area which can cause delay.  The Court is insistent, you do need to serve the Notices of Application on all the beneficiaries.  Now the Notice doesn’t affect the legal rights of the beneficiaries in any way.  But the Court still does require that the Notices of Application be served on all the beneficiaries and as importantly, the names of the beneficiaries need to be identical to the names referred to in the Will, as well.  So that’s another key point to keep in mind when serving the Notices of Application on the beneficiaries and keeping them advised of that.

David Smith:  Okay, so good tip, Sarah.  Now, you know, shifting away from the actual form of the Application, why don’t we touch now on some specific situations.  I’m thinking particularly of holograph Wills, just because that’s near and dear to my heart.  I run into it in litigation context on occasion.  What specific challenges are presented by holograph Wills that may cause delay if not dealt with properly?

Sarah Fitzpatrick:  Well, first of all, we’re going to need an Affidavit in the holograph Will, attesting to the signature.  And what can often cause delay is that there can often be only one beneficiary or major beneficiary and ostensibly there could be a conflict of interest if the beneficiary is signing the Affidavit attesting to the testator’s signature.  So that’s one area that you do need to be concerned about.  However, I don’t think there’s any legal restriction on a major beneficiary signing the Affidavit attesting to the signature.  And often, of course, there’s no one else that’s available to do that.  In my experience, I’ve had cases where often there may be a cheque from a bank, for example, and you can often have the bank teller sign an Affidavit attesting to the signature.  But certainly, when there is only a single beneficiary able to swear that Affidavit, that can certainly cause delay.

David Smith:  Okay, and certainly the characteristic of a holograph Will is not only that it’s signed by the deceased, but is wholly made in the handwriting of the deceased.  And I presume, of course, that the Affidavit would reference that fact as well?

Sarah Fitzpatrick:  That’s right.  And I…and further to that point as well, I think that this is a case if there was a sole beneficiary of the estate, and they were the only ones that could sign the Affidavit, it would very well be a case that would be referred to a judge.

David Smith:  Okay, for our last topic we can touch on, and we’re not going to hit everything obviously, let’s just talk briefly about administration bonds.  I mean these, you know, just uttering that phrase causes me anxiety because every time I’ve encountered bonds in the litigation context, they’ve been very difficult to obtain.  Can you just tell me briefly what problems administration bonds can cause in the context of obtaining probate and how that can cause delay?

Sarah Fitzpatrick:  That’s right, David.  In a case where you have an Application without a Will, or if it’s an Application with a Will where the estate trustee is either…well the Applicant is either not named in the Will, or the estate trustee is resident outside of Ontario, the Court is going to require either a bond or an Order dispensing with the bond.  And, as David mentioned, the bonds are notoriously difficult to obtain these days.  And so typically you’re left with the option of getting an Order from the Court dispensing with the bond.  What you’re going to need to obtain here is consent of all the beneficiaries, and you’re going to need an Affidavit from the Applicant as well.

David Smith:  Right.  The bond just boils down to an issue of trust, doesn’t it?  I mean, I’ve always found it kind of…the surprising thing about bonds, to my mind, is the executor is chosen by the testator because he or she is someone they trust.  Yet here you’ve got a situation where the Court orders that they’ve got to post security and that there’s a concern that they may not be trustworthy.  I always find that a little bit odd.

Sarah Fitzpatrick:  Yeah, exactly.  The Court is obviously protecting the beneficiaries in the event of negligence by the estate trustee.

David Smith:  Right, but I suppose if it’s good estate planning and the executors…the beneficiaries like the executor, trust the executor, then the bond might well be waived.

Sarah Fitzpatrick:  That’s right. And certainly the bond is a requirement when you have an Application without a Will as well.  So there may not have been an estate trustee named, so that can be critical as well.

David Smith:  Okay, that’s great Sarah.  So thanks so much.  It was a lot of…it was very interesting rather, doing this topic, and I look forward to podcasting again.

Sarah Fitzpatrick:  Great, thanks.

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