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

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Lawyers frequently take funds into their trust accounts on behalf of clients and others. Usually, it is not difficult to determine to whom those funds belong. However, what happens when the beneficial owner of funds held in trust cannot be identified or located?  

In Ontario, section 59.6 of the Law Society Act permits a lawyer (or licensed paralegal) who has held money in trust for or on account of a person for at least two years to apply for permission to transfer the money to the Law Society of Upper Canada (“LSUC”) if,

1. The lawyer has been unable to locate the person entitled to the money despite having made reasonable efforts throughout a period of at least two years; or
2. The lawyer is unable to determine who is entitled to the money.

The application procedure for transferring the money to LSUC is set out in By-Law 10.

You must complete and file the licensee application form, which will be reviewed by LSUC. Upon completion of the review, LSUC will notify you whether permission to transfer the money to it has or has not been granted.

If permission is granted, you must,

1. Send a trust cheque, made payable to "The Law Society of Upper Canada, in Trust", in an amount equal to the amount of money for which you have received permission to transfer; and
2. Send copies of your financial records relating to the money which you have been permitted to transfer.

Permission to transfer money will typically be subject to the condition that you inform LSUC immediately if you obtain any new information relating to any person entitled to the money that was transferred.

Once the money has been transferred, your liability as trustee or fiduciary with respect to the amount transferred is extinguished.

See the LSUC website for more information.

Sharon Davis - Click here for more information on Sharon Davis. 

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Given the prevalence of scepticism amongst lawyers (see my earlierblog), it is entirely in keeping with character for lawyers to be slow to openly embrace social media.

Judging from a recent study, it would seem that this might be doubly so for Canadian lawyers. In this article about Digital Life, the world's largest study into consumers' digital behaviours and attitudes ever conducted, the following observations were made about Canadians’ online activities:

• Canada lags in digital engagement.
• Canadians aren't much for blogging.
• Canadians are average picture-sharers.
• Canadians do less social networking, more email.
• Canadians spend less time on social networking sites on their mobile devices.
• Canadians will be slower to transition social networking on mobile phones.
• With an average of 150 friends in our social networks, Canadians are not as "friendly" as consumers in some other countries. 

If the President of the United States can win an election based in part on social media strategy, then even the most sceptical of lawyers cannot deny there just might be something to it.   Barack Obama has so many friends on facebook and contacts on LinkedIn that even I am a 3^rd level connection.     

We have also seen this week much texting and tweeting from the courtroom during the sentencing hearing of Russell Williams. Justice Robert Scott agreed to allow the media to use electronic devices for the purpose of taking notes but said any use of laptops, handheld communications or recording devices must be done an a way that was not obtrusive to the court process.

Social media is a pretty big wave. It is changing our behaviour and it is here to stay. Whether you are a Canadian, a lawyer, or both, you might as well just hang on and enjoy the ride!

Sharon Davis - Click here for more information on Sharon Davis.

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I recently attended a conference on Legal Project Management (LPM). The ideas were all good ones and certainly the concept of Project Management has been a documented success in the business world for many years. 

The difficulty with LPM is not in the planning but in the execution. One impediment to effective implementation is, of course, that lawyers must play an integral role.

Lawyers have been found to have certain personality traits in higher proportions than the general population. One of these traits is scepticism. So no one should be surprised if a new project, especially one meant to manage processes traditionally controlled by lawyers, is met with a little scepticism. 

To take a step beyond scepticism, I have read that pessimism is an overwhelming predictor of success in lawyers. In her article “The Unique Psychological World of Lawyers”, Ronda Muir discusses research findings by Dr. Martin Seligman, a University professor and the founder of the school of Positive Psychology.     

Dr. Seligman studied whether there was any correlation of certain personality attributes, and particularly optimism, with success in the 104 careers he studied. In a certain twist of irony, the only career he found consistent findings for was law, where pessimism was so highly correlated with success in lawyers that the higher the pessimism in law students, the higher their grades. 

At this point I’d like to step in to defend. As lawyers, we are taught to examine, scrutinize and question everything we are told, see and hear. We are trained and socialized to see the train wreck coming and to put procedures into place to prevent it. That is what we do and what clients pay us for. Some may call it pessimism, I call it risk management. 

The good news is that lawyers also respond really well to indisputable evidence that something works. Now that is something to be optimistic about. 

Sharon Davis - Click here for more information on Sharon Davis.

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When working with your legal colleagues, it is worth keeping in mind that we all have traits and characteristics that are a function of how and when we were socialized into the profession.

In "The Multigenerational Workforce, Managing and Motivating Multiple Generations in the Legal Workplace", Sally Kane posits the following about the various generations:

1. Baby Boomers (aged 46-64) hold positions of power and authority and comprise the majority of law firm partners and senior level executives. They are loyal and work-centric. High levels of responsibility, perks, praise and challenge motivate this generation.

2. Generation X’ers (aged 32-45) hold junior partner and senior associate positions in law firms and middle-management positions in corporate legal departments. They are ambitious and hardworking but value work/life balance. Diversity, challenge, responsibility and creative input motivate this generation.

3. Generation Y’ers (aged 21-31) hold entry level associate positions in law firms and corporate legal departments. They are creative, optimistic, achievement-oriented and tech-savvy multi-taskers who seek challenge and personal growth. Immediate feedback, praise and frequent communication motivate this generation.

According to an article by Robert Half Legal, the biggest benefits to a multi-generational workplace are that it:

• Brings together people of varying experience levels;
• Allows for greater diversity of project teams; and
• Allows for mentoring opportunities.

The biggest challenges are that the different generations have:

• Different work ethics and approaches to work life balance;
• Conflicting communication styles; and
• Different points of view, which make it harder to reach consensus.

Keeping these generational differences in mind could help you to understand and to work more effectively with a colleague or even a client.   

Sharon Davis - Click here for more information on Sharon Davis.
 

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There has been so much that has been recently written about the release of the iPad and more recently, the new iPhone 4G. Some may remember that an Apple Software Engineer who was working on the iPhone 4G accidentally forgot the Smartphone at a local bar, prior to its release date. Gizmodo, known as a leading technology weblog about consumer electronics, purchased the Smartphone from the finder and published exhaustive details about many of its new features, thereby stealing some of the thunder from the creators of the iPhone.

Smartphones are certainly the hottest thing going forward in social, business and technological circles, and its time for us to start thinking about the revolution it has had on our lives. 

Thanks to Smartphones, most lawyers are now mobile. I read an article in the most recent LawPRO magazine named “Essential Smartphone apps for Lawyers”. For those of us who are not familiar with technological jargon, an app is short for “application software”, which is downloaded to a Smartphone. Some essential apps described in this article were: “Documents To Go”, which, among other things, allows lawyers to view and edit Microsoft Word, Excel and PowerPoint files, and “Timr”, another app referred to in this article, allows a lawyer to track their time and mileage. 

Smartphones have certainly made life convenient, but as lawyers it is scary to think about the privacy issues associated with all of the personal and client data that we store on them. With just a push of a button or a poke at the touchscreen, pretty much anyone who got hold of your phone could read your email, see pictures of you, your family etc. Smartphone’s contain far more personal data than would ever have been accessible on older mobile phones, now coined as the “dumbphones”.

Most of our privacy concerns can be remedied, which is as simple as enabling your security passcode, thereby locking your phone so that anyone who steals it or finds it if you have misplaced it cannot gain access.
 

Thank you for reading and have GREAT weekend,
 

Rick Bickhram - Click here for more information on Rick Bickhram.
 

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Each year the Ontario Bar Association (OBA), Trusts and Estates Section, considers candidates for its Award of Excellence. Last year, the Section paid tribute to Barry Corbin as the recipient.

The Award for Excellence was created to recognize exceptional contributions and achievements by members of the OBA to the area of trusts and estates.

Any Trusts and Estates Section member of the OBA in good standing, as well as former members of the section who have retired or been appointed to the bench, but not including current officers of the Executive of the Trusts and Estates Section or the Executive of the OBA, are eligible to be nominated.

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The Ontario Lawyers Gazette recently published a helpful article titled “Succession Planning Protects You and Your Clients”, which reminds licensees of the importance of planning for the future.

According to a 2006 survey, 80% of sole practitioners do not have a plan detailing who would service their clients in the event of their death or incapacity. This is an alarming number of sole practitioners who are putting themselves at unnecessary risk.

Under the provisions of the Law Society Act, the Trustee Services department of the Law Society may intervene in a practitioner’s practice and obtain a variety of orders which would have the effect of winding up the practitioner’s practice in the event that the practitioner became incapacitated or deceased. Margaret Cowtan, manager of Trustee Services states that “it can be a very intrusive and often expensive undertaking if Trustee Services is required to resort to an order to enable a practice to be wound up.” 

One alternative that we can consider in planning for our future is to “name a licensed lawyer as a limited trustee in their wills for the sole purpose of winding up the practice. By appointing another lawyer as a trustee for the purposes of the practice, on death, that lawyer can not only take professional responsibility for the trust account and make appropriate distributions to clients he or she can review client files, continue matters should clients elect to engage them, or return files to clients as appropriate.” We can also give signing authority on the trust account to another lawyer in the event of an emergency. Only licensed lawyers or paralegals are permitted to deal with trust accounts.

If you are interested in learning more about planning for your future, please click the following link which will take you to the Law Society’s Succession Planning Toolkit.

Thank you for reading,


Rick Bickhram

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A recent article in the Ontario Lawyers Gazette discusses succession planning for lawyers with respect to their practice. Lawyers often fail to plan for their retirement or death and often do not set up a formal succession plan for their practice to the determent of their families, clients, and colleagues.

The article states that 41% of practicing lawyers are over 50 years old and 34 % of all lawyers in Ontario are sole practitioners with an additional 29% working in firms of two to ten lawyers. However, often lawyers do not prepare well enough in advance for the winding down of their practice or what will happen to their practice in the event of their death or disability.

The article makes a number of helpful suggestions including:

• Advising sole practitioners to assign another licensed lawyer or paralegal with alternative signing authority for their trust account in the case of an emergency;
• Suggesting that practitioners name a licensed lawyer or paralegal as a limited trustee in their Will for the sole purpose of winding up a practice;
• Advising lawyers that a non-lawyer trustee or attorney pursuant to a Power of Attorney may not be able to deal with some of the issues with respect to winding down a practice;
• Advocating that lawyers communicate with their families, partners, and employees their succession plan; and
• Advising lawyers to plan well in advance (i.e. five years) to maximize their financial compensation.

The Law Society offers A Succession Planning Toolkit and a Guide to Closing Your Practice to assist lawyers. On May 20, 2009, the Law Society will be offering a teleseminar Succession Planning for your Practice  discussing these topics and more.

Thanks for Reading,

Diane Vieira

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I recently read an article regarding the most common claims against lawyers, which is authored by Dan Pinnington who is the director of practicePro, LawPro’s risk and practice management program (click here for the article). I found it particularly interesting that only a small portion of LawPro claims account for a lawyer’s inability to know or apply the substantive law.    

The most common claim involves communication between lawyer and client. Dan breaks down the type of communication errors into three categories. According to the article, the most common communication related error, is the failure to follow the client’s instructions.  The second type of communication error is the lawyer doing work or taking steps on a matter, but failing to obtain the client’s consent or to inform the client. The third type of communication error involves the failure to explain to the client simple administrative things (i.e. timing of steps on the matter, fees and disbursement). Dan states that you can reduce your exposure to this type of claim by managing your client’s expectations from the very start of the matter and actively communicating with the client at all stages of the matter. 

The second most common claim is missed deadlines and time management related errors. The most common time-related error is a failure to know or to ascertain a deadline (i.e. limitation period). There is a concern that procrastination-related errors are on an upwards trend. Dan states that these types of errors are easily preventable with better time management skills and the proper use of tickler systems.

The third most common error is the inadequate investigation or discovery of facts.   To avoid these types of claims lawyers have to “dig deeper”, take the time to read between the lines so that all of the appropriate issues and concerns associated with the subject matter can be identified. 

I hope my final blog will assist all of us in our practise. 

Rick Bickhram   

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I knew Summer’s end was near when I received the Fall mailings of 2007/2008 Continuing Legal Education (CLE) programs.  As expected, there is a full calendar of seminars and events coming up that lawyers in an array of practice areas should consider attending.  Below I have set out a few of the highlights for estate practitioners:

September 24, 2007 - Trusts, Trustees, Trusteeships II [at the OBA Conference Centre]

This full-day event covers the use, treatment and taxation of trust relationships.  This is a fairly complex area of estate law, and the talks are targeted at those with intermediate and advanced knowledge in the area.

October 5, 2007 – Hull & Hull LLP’s Quarterly Breakfast Seminar [at the OBA Conference Centre]

This two-hour morning seminar hosted by Hull & Hull LLP focuses on three issues – settlements when dealing with minors and incapable beneficiaries, secret trusts and powers of appointment, and mutual wills. 

November 5 & 6, 2007 – 10^th Annual Estates and Trusts Summit [at the Law Society of Upper Canada]

As the title indicates, this event happens only once per year.  It is an estates law marathon boasting more than 25 esteemed speakers and almost the same number of topics.  Both estate planning lawyers (day 1) and estate litigation counsel (day 2) are sure to benefit from attending the summit.

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John Hunt wrote an article titled “Get a financial strategy now” in the January 8, 2007 issue of Law Times, discussing the uncomfortable situation faced by many lawyers of spending a high proportion of their income in the face of the possibility of a pension-free retirement. He suggests that lawyers need extra focus on financial planning.

The article reminded me of how many lawyers I have met who have no Will, some of whom even practice in the Wills and Estates area. In some cases, they have estate plans that do not require a Will, such as holding all assets in joint ownership, but even so, there is a risk of problems with changing assets and financial profile, sentimentally valuable personal property and overlooked assets.

Coming up with an estate plan inevitably involves the contemplation of an uncomfortable certainty: one’s demise. This prospect is as unpleasant to lawyers as it is to anyone else. In the result, many lawyers are just as vulnerable to procrastination as laypersons when it comes to estate planning. They also risk all the same problems and risks of mayhem involved in dying without a Will.

Hopefully the “do as I say and not as I do” approach by lawyers to will planning is less prevalent than my experience suggests – Maybe I only run into the exceptions that prove the rule.

Thanks for reading. 
Sean Graham