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

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Anne Werker recently brought an interesting case to my attention. In Rooney Estate v. Stewart Estate[1], the solicitor who performed the executor’s duties attempted to rely on a release signed by a beneficiary in his response to an application that he pass accounts in his capacity as de facto trustee.

Pierce J. held that in order for a release to be enforced, the beneficiary who signs the release:

1.   must be “fully informed”;
2.   must have received competent legal advice in a review of the accounts;
3.   should understand how compensation has been charged; and
4.   should know what legal services have been provided and what the fees were.

Pierce J. also held that a distribution cannot be withheld pending the execution of a release. It is simply fiction for an executor to believe that he/she can refuse to distribute the estate until a signed release is in hand. A holdback must be reasonable and demonstrably justifiable in the circumstances (i.e. tax liability or the costs of a passing). 

However, in the end, some common sense must prevail. In a simple administration, it is unlikely that formal accounts will be prepared for passing either because no compensation is claimed or the costs of doing so are prohibitive. However, the executor will likely ask for a release on the distribution of the estate. In that case, transparency may be the answer. By communicating regularly with the beneficiaries, sending them pertinent information and updates, and/or preparing an informal accounting (including how compensation has been taken), a court may just be convinced that a signed release is good enough.

“TGIT”

Justin

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Whether voluntary or mandatory, mediation is now a common occurrence in estate and trust litigation. Much has been written and blogged on the subject. I therefore thought it worthwhile to comment on the changing nature of the plenary session from a practioner’s point of view. 

Traditionally, the plenary session brought the parties and their counsel together at the outset of the mediation so that the mediator could review the ground rules or “rules of engagement”, discuss the benefits of reaching a mediated settlement, and touch upon role of the mediator during the process. Counsel were then invited to present their client’s case usually adopting an adversarial stance and focusing on a “rights-based” approach to the mediation.  Next up were clients who, understandably, often became angry or confrontational.  

However, plenary sessions have largely changed. It is now widely recognized that allowing counsel and parties to make opening statements only inflames the situation and places the focus on what divides the parties rather than what unites them. Consequently, the mediation is off to a poor start and the mediator spends considerable energy unwinding the newly minted ill-will. 

Given the above, a plenary session should, in my view, consist of the following:

·          A brief discussion by the mediator of his/her role as well as the ground rules for the day;

·          An emphasis on why it is in the parties' interest to resolve the dispute at the mediation rather than later on within the court process;

·          An overview presented by the mediator of the outstanding issues and disputed facts; and

·          Constrained input from the parties.

In my experience, when a mediator takes the lead during the plenary session and canvases the legal and factual issues that divide the parties, while being sensitive to the emotional context in which the dispute is being waged, the parties are more likely to focus their energy on reaching a settlement. In the end, raw emotion does not simply trump common-sense.

Finally, it is worth noting that the vast majority of legal disputes settle before trial. Furthermore, statistics indicate that a settlement, or partial settlement, occurs more often than not at mediation. Viva la mediation.

Until tomorrow!

Justin

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Welcome to my week of blogs.

Tax season is once again upon us with all of its attendant trepidation. No doubt, a general panic has set in as people gather together the necessary documentation to fill out and file their tax returns. 

Anybody who has been an estate trustee will know that he/she is responsible to prepare and file a terminal tax return and to ensure that any outstanding taxes are paid on time. To help cut through the confusion, I thought it worthwhile to set out some of the income/deduction tax receipts that an estate trustee may come across when preparing a tax return:

Income

Ø      T4                    Employment Income

Ø      T4A                  Pension/Annuity Benefits, Canada Pension Plan Benefits

Ø      T4A(OAS)       Old Age Security Benefits

Ø      T4RIF              Registered Retirement Income Fund Withdrawals

Ø      T4RSP            Registered Saving Plan Withdrawals

Ø      T4PS               Contributions by a Company to Profit Sharing Plan

Ø      T600                Cash Canada Savings Bonds

Ø      T4E                  Employment Insurance Benefits       

Ø      T5                     Investment Income

Ø      T3                     Trust Income (including mutual funds and income trusts)

Ø      T5008              Statement of Securities Transactions

Ø      T5013              Statement of Partnership Income

Deductions

Ø      T2200              Declaration of Conditions of Employment

Ø      T2201              Disability Tax Credit (completed by a doctor)

Ø      T2202              Tuition/Education Deduction Certificate

Ø      T101                 Statement of Renounced Resource Expense

Ø       T5006              Labour Sponsored Tax Fund Credit, RRSP Contribution, Union and Other  Professional Dues, Medical or Attendant Care Expenses, Charitable Donations, Political Donations, etc.

Thank you for reading, Justin.