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Listen to Transferring the Family Cottage -Part 4

This week on Hull on Estate and Succession Planning Ian and Suzana continue their discussion of the transfer of the family cottage. They explore three ways of transferring the cottage on death; 1) Putting the gift of the cottage in your will 2) Testamentary Trust and 3) Outright gifting.

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

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Listen to Transferring the Family Cottage - Part 3 - Hull on Estate and Succession Planning #171

This week on Hull on Estate and Succession Planning Ian and Suzana look at the more complex solutions to the transfer of a cottage. The discuss the inter vivos transfer  - putting the cottage in trust for your children while you are living. 

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

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Listen to Social Media and Being Specific Wrap-up

This week on Hull on Estate and Succession planning Ian Hull and Suzana Popovic-Montag begin their discussion by relating Star Trek to social media in terms of technology, costs and viewer/reader feedback. They continue on with a wind-up of their Being Specific series and discuss the last stage of how things unfold. Finally, Suzana mentions a blog post relating to costs from the New York Probate & Estate Litigation Blog by Philip Bernstein.

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

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Listen to The Decision of Justice Brown

This week on Hull on Estates, Ian Hull and Suzana Popovic-Montag discuss the recent decision of Re Pearsall .

In this decision, Justice Brown offers clarification on the issue of where applications involving estates may be commenced.

Paul Trudelle has  previously written a post about the decision.

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

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Listen to Uncertainties in Litigation

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss the uncertainties in litigation. They look at the great uncertainty of interlocutory (or injunctions, or motions) throughout the process.

They talk about the motions that are brought often that can create budget difficulties due to the unknowns in litigation.

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

Uncertainties in Litigation - Hull on Estate and Succession Planning #166

Posted on May 27, 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 166 of our podcast on Tuesday, May 26^th, 2009.

Ian Hull:   Hi Suzana.

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

Ian Hull:   I’m doing great, thank you.

Suzana Popovic-Montag:  That’s good.

Ian Hull:   So one of the things that we wanted to work through today and talk a little bit more about was the development of…we have always tried to encourage our clients to stay out of the litigation process because of the uncertainty.  And one of the great uncertainties is what we call interlocutory or injunctions or motions or mid steps throughout the process.  And we thought we would try to illustrate our point to show how crazy litigation can get and how some of the tangents it can turn without an ability to predict by talking a little bit about the kinds of motions that are brought often or some that aren’t brought often but can create a whole new chain of events in terms of costs and difficulties when you’re trying to resolve the problem in the litigated Court format.

Suzana Popovic-Montag:  And I think, Ian, this is a good discussion to have because it helps us explain as lawyers why it is that our clients are saying well how much will this Will challenge cost, that we give them a range from A to B, but you know it’s got a whole bunch of unknowns in between because some litigation can be run quite smoothly.  Other litigation, you never know what’s going to arise.  And the other intangible, of course, is you don’t know how the other side or the other sides are going to respond in kind to any of these steps as well.  So that’s where our uncertainty in terms of budgets for litigation comes in and some of these motions that we’ll discuss will be illustrative of that.

Ian Hull:   Absolutely because in some ways, when people get into and embroiled in litigation, it becomes a little bit of, well one person does something and the other person wants to fight back and do something else.  And it becomes strategic.  And a classic example is when you get into scenarios where someone will say well look, insufficient disclosure has been provided.  For example, you haven’t provided me with all the historic Wills or the notes relating to the Wills.  And then the other side will come back with a motion saying well, insufficient information is provided in respect of your claim.  You haven’t showed us any financial interest you have.  You haven’t showed us any of the corporate records that might be relevant or something like that.  So that’s just an easy illustration, and we’ll talk about particulars now.  But that’s an easy illustration of how, from a strategic standpoint, these things explode and each motion is literally tens of thousands of dollars, regardless of how we want to do it.  And so you put the strategic overlay onto this and then talk about some of the easy hot buttons that people can press.

Suzana Popovic-Montag:  And we talked during our last podcast about one of the easiest examples of a motion that can arise and that is, during a discovery process if questions are asked and for whatever reason counsel decides that they’re not going to answer questions, then we’ve got to bring a motion to get those answers from the parties who’ve been examined.  And that will ultimately depend upon a determination by a judge as to relevance, whether or not the question is one that is relevant to the litigation, whether it was properly asked and if it has to be answered.

Ian Hull:   So you can see, like that example alone demonstrates just how crazy things can get.  Because what you’re ultimately doing is, say you say to the witness on the other side as you’re learning about your case, to that witness who is just alleging that the Will is invalid or something.  And you say well, you know, what facts do you rely on in respect of that allegation?  And for some reason their lawyer decides that they want to, for strategic reasons, be difficult and they say that’s not relevant.  So you can’t even scratch the surface of your claim without going back to Court to get a motion to release that information and to release the witness, so to speak.  And all of those steps are literally tens of thousands of dollars.  And really the thing that’s most upsetting and disturbing for most clients is that a lot of these interlocutory motions tend to be sort of based on strategic steps, as opposed to economic or really how important they are or not important they are.  And, you know, when we unleash people into litigation, we forget that there’s going to be an overlay, a tremendous overlay of strategic steps that people are going to take, motivated maybe to beat up the other side, maybe to flesh out their case, maybe just legitimately to understand their case better.  But that uncertainty is obviously there, and who knows?  One party may react differently than the other parties.

Suzana Popovic-Montag:  Another situation where again you can’t predict or control is when you have a lawyer that you want to examine or their file that you would like to obtain, for instance, a Will challenge.  The lawyer’s evidence is going to be quite crucial and many times in those situations, the lawyer will get counsel, counsel will insist on a motion to be brought to waive solicitor/client privilege to compel the individual to produce their file and to compel them to attend at discoveries as well.  Again, another step that, you know, it seems self-evident, seems very important that information.  But we’ve got to jump through a couple of hoops in order to get that evidence properly before the Court.

Ian Hull:   Absolutely.  And one of the things that we find really upsetting and frustrating is anybody who’s on a fiduciary role, is in a fiduciary role, an executor or trustee, when they behave arrogantly.  We sometimes have to run to Court to again get a Court or a judge to say you can’t behave that way.  And an easy example there is where a fiduciary or a trustee will not disclose the Wills, or more importantly won’t disclose the assets.  And you have to bring a separate motion for disclosure of the assets alone.  Before you even get into the fight, you’re into a motion on a procedural point because that trustee is acting either arrogantly or is acting strategically.  And they look at this and say well look, they’re not going to have the energy or the money and the wherewithal to really push me on this, so let’s just ignore them or let’s act arrogantly and say you’re not entitled to it and make them go to Court.  And by the time they get to Court maybe they settle at the Courtroom door, maybe they don’t, whatever.  They have created what is really a strategic and sometimes, in some cases, is a bit of a bully tactic, but can be effective because of the economics of the process.

Suzana Popovic-Montag:  And ultimately as well, many times we’ve seen situations where we’ll actually litigate the issue, that motion, and then a judge will reserve costs, rather than taking the opportunity to possibly penalize the party that maybe they view as having acted improperly or certainly that we would have viewed as acting improperly.  And then they don’t make that cost Order, they’ll save it for the end of the day, which is of course a reasonable award to make by a judge.  But litigants and clients in particular can be quite upset by that result, I think.

Ian Hull:   Well and it’s all a part of the unknown.  And whenever you step into the process, if you’re going to step into it, the more educated you are about the process, the better off you are.  You know, just to simply say to a lawyer well we’re going to write a blank cheque and you do whatever you have to do and whatever you think should be done is one approach.  But most people wouldn’t renovate their house on that basis.

Suzana Popovic-Montag:  That’s for sure.

Ian Hull:   So you’re going to want to be active, you’re going to want to make those strategic calls.  Well how important is that?  How unimportant is it in the whole scheme of things?  And maybe you are trying to look strong and powerful in what is a contentious, gladiator-like relationship.  All of those are legitimate motivations but, you know, people should…it seems to me with our clients, we really need to make sure they understand going into this (a) as you say, we don’t have control over the agenda; and (b) sometimes these motions and things like that can be appropriate and are the sincere and legitimate inquiries being made or being sought by the Court Order.  So, you know, as we work through that issue, because I mean the theme here we’ve been trying to do is talk about what we’re going to get ourselves into in litigation.  And instead of just saying with a blanket “it just costs a lot”, this is part of our attempt anyway to illustrate what it does cost a lot and how much effort that’s going to involve in the process and some of the uncertainties that come with it.  So that’s the motions, the interlocutory and the mid steps that we thought we’d walk through today.

Suzana Popovic-Montag:  Okay.

Ian Hull:   So in our next podcast we’ll finish off some of our thoughts on costs, as I say, not on the sort of broad scale but on the sort of detailed analysis approach.  So thank you very much for joining us this week.

Suzana Popovic-Montag:  Thanks very much to you, Ian, as well.

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. 

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Listen to The Question of Costs - Part 2

This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on the question of costs. Specifically, they discuss the estimated costs when engaging a lawyer.

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

The Question of Costs - Part 2 - Hull on Estate and Succession Planning #165

Posted on May 20, 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 165 of our podcast on Tuesday, May 19, 2009.

Ian Hull:   Hi Suzana.

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

Ian Hull:   Terrific, thanks.

Suzana Popovic-Montag:   That’s good.

Ian Hull:   Alright, we’re where the buck stops here in that series of our podcasts in the sense that what’s it really going to cost you financially.  We spend a lot of time talking about some of the emotional strains that come from litigation.   And we have on Hull Estate Mediation web page we have a brochure that sort of sets out what we call the estimated costs so we’re going to spend some more time talking about the estimated costs.

We started our last podcast talking about this wide discretion the Court has and we finished it with talking about what kind of ranges are we looking at.  So we’ve had the first meeting.  We’ve decided to do a little bit of exploration.  We’re going to do what we call an Order for Directions which is a motion and that’s like our Statement of Claim.  And that first stage involves meeting with the client, reading documents and typically preparing for and attending at Court, which again, hourly rates can vary but you’re looking at anywhere between sort of 15 hours of lawyer’s time minimum, minimum to, you know, 30 - 40 hours of lawyer’s time, depending how contentious it gets.

Suzana Popovic-Montag:   That’s right.

Ian Hull:   So we’ll have got to the point, and let’s just sort of break this down.  Phase 1 or stage 1 is client comes to see you to Court Order.  And that is the first preliminary Order for Directions.  And as we’ve talked about in the past, there’s really actually nothing that’s directly accomplished here except for information gathering.

Suzana Popovic-Montag:   Right.

Ian Hull:   And we’re only information gathering as far as we can legally.

Suzana Popovic-Montag:   Yes.

Ian Hull:   Because the Order for Directions opens the door to get the next stage. And let’s talk about then what’s our next stage?  So stage 1 is get us from the first meeting to Order for Directions and we estimate, in our booklet we estimate anywhere between, you know, well I’ve talked about the hours but you know you’re probably looking at anywhere between $5,000 - $20,000 of lawyer’s time, and it’s flexible depending on where you are.

Suzana Popovic-Montag:   And you know one of the things that I say to my clients is that, you know, when you talk about costs, the only thing I can guarantee is my side of the equation.  And if you’ve got a very contentious, difficult counsel on the other side, a matter that should only cost $5,000 can cost $15,000. Not because of anything that you’ve done improperly but because of the fact that you’ve got to respond to the individual whose making it difficult for you.  And that’s one of the things that’s the hardest to predict.  The costs are hard enough to predict from our end but when you’re dealing with that unknown in terms of how you’ll have to respond to the other side, makes it very difficult to anticipate it.

Ian Hull:   It’s so true.  You cannot control the other side’s behaviour.  And if the other side behaves in a way that costs you money, it costs you money.  And unless you want to throw in the towel at that preliminary stage 1, you have to belly up to the bar, as they say.

Suzana Popovic-Montag:   And then the next stage, Ian, after we’ve done a preliminary Court attendance and received the authorization and the ability to collect additional documentation outside of the legal parameters that you talked about initially that we would have, we’re looking at getting perhaps the medical records, getting the financial records, getting the solicitor’s notes and so further evidence gathering essentially.

Ian Hull:   And really you’ve described this as this is the intense investigation.  We are going to get these third party sources of information to support, and we kept coming back to our initial sort of scenario, and that is a Will challenge, where the brother is tired of getting nothing out of the estate, got nothing from parents when they were alive and feels, you know, misdealt a card in terms of the estate because he got written out of the Will.  So he’s challenging the Will.  The first stage allows him to just be able to get the preliminary story on the table, and then the second stage, which is this stage, is a big part of the intense, third party documentary investigation.  And that can take again, I mean you’re looking at, depending on lawyer’s time, clerk’s time and so forth, you’re looking at many, many hours of effort.  And from that standpoint, you’re booklet describes it as somewhere between, you know, even guess-timating $5,000 - $60,000.  It seems like a strange spread, but like you say, it depends on behaviour, it depends on what documentation you’re going to have to chase and so forth.  So you’re looking at big dollars, even at stage 2.

Suzana Popovic-Montag:   For sure.  And then once you finish that stage, you move on to possibly considering the attendance at a mediation or possibly proceeding to discoveries.  And certain jurisdictions will do that in different order.  Certain practitioners will choose to do one as opposed to the other at stage 3.  But I know we would typically move to mediation if we can, if it’s the right time in the lawsuit and if it seems to be something that is facilitated and amenable to the other side.  Now some jurisdictions actually have mandatory mediation and others don’t. But I think in any event, it’s something that people would be well suited to consider after they’ve done that intensive investigation and built their case, or learned their case as best as they can.

Ian Hull:   And so again, we’re looking at many hours of time and effort by lawyers and clerks and so forth.  And you’re looking at the cost of the mediator himself or herself.  So again, you’re book says estimate $10,000 - $50,000.  And, you know, estimates - again, wide ranges but will depend on the complexity of the case, the behaviour of the individuals and so forth.

Suzana Popovic-Montag:   That’s right.

Ian Hull:   Alright, so now the cash register is ringing off the hook…

Suzana Popovic-Montag:   That’s for sure.

Ian Hull:   and you can see that we haven’t really got that far along in the lawsuit and we’re into the tens of thousands of dollars, depending on the case.  There’s obviously lots of war stories or horror stories that we could tell where even this kind of money was way too low.  But there’s also cases where we move pretty quickly and efficiently to get to mediation, get the information accessible on a non-contentious and also on a modest cost basis.  But good to have the ranges and good to know that we could have spent by now, just on our rough estimates, we could have already spent over $100,000.

Suzana Popovic-Montag:   For sure.

Ian Hull:   Alright.  And that’s just on your side, our side…

Suzana Popovic-Montag:   Exactly.

Ian Hull:   in that sense.  Okay, so the next stage, you said that you could choose to go to mediation or discoveries.  And we’ve talked about discoveries and we may talk a bit more about that process.  But that’s really the time where you’re on the record with a transcription of everything you say.  You get to explain your case away and vice versa, with lawyers around and all of that stuff.  Tell me about that kind of cost estimates there.

Suzana Popovic-Montag:   Well those costs, Ian, they could range anywhere from $15,000 up to maybe $50,000 - $60,000, depending on how many people are involved, how many lawyers are involved as well.  I mean, there could be several lawyers or there could be one lawyer representing a group of individuals.

Ian Hull:   Right.

Suzana Popovic-Montag:   There’s so many unknowns in that whole process and how it could unfold.  But it’s kind of hard to peg it but discoveries tend to be much more expensive than people would expect them to be because of the nature of the process.

Ian Hull:   It’s days of preparation, days of organizing documents and days of sitting in a room asking questions.

Suzana Popovic-Montag:   Yes.

Ian Hull:   And it can be, quite frankly, overwhelming in terms of the cost.

Suzana Popovic-Montag:   And there’s also, of course, the motions that can arise as a result of the discoveries, refusals to answer questions or to provide undertakings and that again, you can’t really predict which case that will arise in, but it is a possibility that just adds to the costs.

Ian Hull:   For sure.  What about interim motions and, first of all, what do I mean by saying that?  And second of all, what kind of costs could we be looking at for that?

Suzana Popovic-Montag:   Well just the clearest example is a motion for undertakings or a motion to compel answers to refusals.  I think that’s one of the motions that can arise at this stage.  It may be that at this point in time, depending on the nature of the evidence that’s been provided or the way the conduct of the parties, there might be some relief that you would seek a judge to provide to you in order to be able to continue to build with your case.

Ian Hull:   And one of the things you struggle with again on that, and we’ll just wind up our thoughts about that at this point, is the whole question of motions.  And so why don’t we do our next podcast coming into that issue of the different kinds of motions that could occur and illustrate the kinds of exploding costs you can get into when it looked like a perfectly normal, simple case at the start.

Suzana Popovic-Montag:   Great Ian.  I look forward to that podcast.

Ian Hull:   That’s a lot.  Me too.

Suzana Popovic-Montag:   Thank you.

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. 

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Listen to The Question of Costs

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss the question of costs. They talk about where people get paid out of in typical estate contested matter and begin to discuss what the costs are and what it really costs a client to engage a lawyer.

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

The Question of Costs - Hull on Estate and Succession Planning #164

Posted on May 12, 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 164 of our podcast on Tuesday, May 12, 2009.

Ian Hull:    Hi Suzana.

Suzana Popovic-Montag:   Hi there Ian.

Ian Hull:    How are you doing today?

Suzana Popovic-Montag:   I’m well thank you.  How are you?

Ian Hull:    Just great.

Suzana Popovic-Montag:   That’s good.

Ian Hull:    Just great.  So one of the topics that we are faced with on a fairly regular basis and we thought we’d talk about today is the whole question of costs.  Now there’s sort of two levels to that question.  One is where do people get paid out of in typical estate contested matter?  And secondly, what are the costs and what does it really cost a client to engage a lawyer?  Now the first one is a little more interesting to talk about from an academic standpoint and the other one is a little more practical.

Suzana Popovic-Montag:   That’s right.

Ian Hull:    So we’ll see how our time goes.  But let’s start with the source of costs.  We remember with situations that turn into contested estate litigation or trust litigation or contentious administrations, there are various sources of who can pay the costs.  Obviously the first is your client who comes in the room, and they meet with you.  They’re going to pay the costs out of pocket and out of their own personal resources.  That’s one option.

Another option is to consider whether or not the costs in the appropriate circumstance should come out of or be funded from the pool, the whole estate pool, or the whole trust, whatever we’re dealing with.  And we’ll get into a little bit of that.  Just sort of determine now, let’s talk about what are some of the factors that would allow a Court or a judge to ultimately decide that they think that the costs shouldn’t be, what would be the normal, out of your own pocket approach, that they should be in fact coming from the disputed pool of money.

Suzana Popovic-Montag:   And I think, Ian, the easiest or the illustration of when you could probably be pretty sure that you’ll get your costs out of the trust fund or the estate fund is when you’re acting for an estate trustee or a trustee who’s looking for advice and direction on how to administer the particular fund that they’re in charge of.  And as long as they’re acting properly and not in a self-interested, motivated fashion, I suspect that it will be more likely than not that costs would be awarded out of that fund.  Of course, we know costs are completely discretionary, so there’s no guarantees.  But we take a little bit of comfort from the fact that’s typically how we see things unfold.

Ian Hull:    Alright.  So when you say completely discretionary, what do you mean by that?

Suzana Popovic-Montag:   Well at the end of the day, a judge can make the decision that the fees will be paid personally by the client, or be paid by the other side perhaps.  Maybe paid out of a particular fund if it’s available.  And the fact that there’s this discretion means that the judge decides.  They look at the conduct.  They look at the nature of the litigation and they say where they think costs should lie.

Ian Hull:    And because of the wide discretion the judge has, the wide parameters that he or she can work within, the whole question of costs is unpredictable.

Suzana Popovic-Montag:   Absolutely.

Ian Hull:    And what about the element of appeal-proofing because of the discretion.  Let’s talk a little bit about that.  So once a judge has come to the decision within this wide, broad spectrum of parameters that the law allows you to come to, and make a decision.  Say the judge decides costs come out of the estate for this Will challenge that came out.  And that the Will challenge well didn’t succeed but the reason it didn’t succeed was probably unappealable, where there’s no reason to go to the next level.  The Court wouldn’t likely deal with it or set it aside.  But on the question of costs, how does that get faced when you move up to the next level to appeal?

Suzana Popovic-Montag:   Well appeal judges will not address the issues of costs.  Or will they?

Ian Hull:    No, well it’s a fair question. I mean that’s the whole question we talked about.  I mean the Courts will be very reluctant to mess with that discretionary decision at the first level.  So if you’re going to appeal something, the threat of costs on the appeal in the estates context is a bit of a veiled threat.  It’s not likely that an Appeal Court, like you say, will necessarily touch that.  They typically will say, you know what, it was the trial judge who was there; they know what’s going on.  I’m not going to set aside on a costs Order alone.  They might want to set it aside because the trial judge made a mistake and it’s in his or her determination.  But they typically don’t touch costs like you say.  But as you also say, or will they?  And that’s the big threat.  And what will the Court do.  If you go and you have total victory at trial and then you go up to the next level and the Court sets aside your total victory and hits you with costs.  So those are the sorts of parameters.  And really what it comes down to is it’s an unpredictable result.  So if there’s wide discretion and the source of the funding is either out of the clients personally or possibly out of the pool of money, out of the estate or not.  And then we overlay this with the uncertainty.  Because, like with any litigation, it truly is uncertain (a) what a judge is going to do; and (b) on the question of costs, because of the wide discretion.

So when we are starting a process, and then let’s kind of get to the brass tacks of it here.  When we’re starting a litigation process in the context of estates, what are some of the things that we know a little bit about how the Courts are dealing with it and that quite frankly, it’s unpredictable.  But what are some of the things that we should start to expect?  Like if I’m a client and I’m coming to see you and I’m going to do a classic Will challenge.  I’m tired of my brother beating me to the punch with my parents.  He wins the battle.  He’s the last man standing and he gets everything under the estate.  And I’m coming to you to challenge this.  What are some of the preliminary considerations beyond what we’ve already discussed?

Suzana Popovic-Montag:   Well one of the things that you would look to, I think, in that situation is what that person’s entitlement might be under the Will.  If they have an entitlement under the Will, then you’ve got a pretty good chance of saying you know, there may be a pool of funds available at the end of the day. Or you could recoup your costs out of the estate, or you may not.  And so that kind of a consideration is something you’ve got to turn your mind to.  Because if you are challenging a Will and a prior Will, for instance, provides for you or doesn’t provide for you, that may affect whether or not you’ve got something to hook onto.

Ian Hull:    Okay.  So let’s go through some of the stages then and some of the cost estimates.  And we warn, I make my own warning here in the sense that this is our experience and every case is different.  You know, if there’s 3,000 e-mails involved or 16 letters, all of the costs go up and down like a yo-yo.  But on our companion web page, Hull Estate Mediation, we have a brochure on that page and on that brochure we have set out the stages and we’ve set out the costs that are estimated within those stages in a very, you know, general way.  So let’s spend a few minutes now just talking about the stages and the costs that one could expect.  So if we’re going to have the guts to challenge a Will, what are we looking at in costs, not just at the end of the day but through stage one and so forth.  And we probably may not have time to go through all the stages and the amounts today with explanation, but let’s start with stage one.

Suzana Popovic-Montag:   And stage one is the evidence-gathering stage and so what the ultimate goal on a Will challenge, for instance, is to get to Court to get an Order giving Directions.  And what that Order does is it organizes the litigation, it sets time frames for when things will happen during the course of the litigation, and who is responsible to do what.  And I would say that part and parcel of that whole process is when you develop your case, to the extent that you can on a preliminary basis anyways.

Ian Hull:    Okay.  So the client comes in and they’re going to meet with you and whatever hourly rates we’re going to charge, it depends on where you’re operating out of.  But they’re going to meet with you.  So they’re going to give you some explanation.  That may take a couple of hours.  You might be at $1,000 pretty quickly.  Then you’re going to need to sign a retainer agreement which will set out the contract in terms of the costs.  And then this, as you say, very preliminary stage.  It’s like a Statement of Claim or a Writ being issued, gets commenced.

Alright.  So we’ve got that sort of very first step into the stage one.  Let’s explore that.  Let’s talk about the specifics on the costs that can be expected on our next podcast and really walk through the practical implications of the lawsuit in the context of financial implications.

Suzana Popovic-Montag:   Great.

Ian Hull:    Alright.

Suzana Popovic-Montag:   Looking forward to that podcast Ian.

Ian Hull:   Thanks very much.

Suzana Popovic-Montag:   Thank you.

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. 

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Listen to Illustrating the Use of Technology

This week on Hull on Estate and Succession Planning Ian and Suzana illustrate the use of technology. They discuss the tools they use, knowledge management within their firm and how technology has made things much more accessible for current lawyers and law students.

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

Illustrating the Use of Technology - Hull on Estate and Succession Planning #16

Posted on May 5, 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 163 of our podcast on Tuesday, May 4, 2009. 

Ian Hull: Hi Suzana.

Suzana Popovic-Montag: Hi Ian.

Ian Hull: Well today we thought we would reminisce a little and talk about a project that is something in the technology scheme. We’ve been talking about lots of legal issues and last week we touched on some technology issues and so we thought we would finish the thought, so to speak. And what we thought we’d talk a little bit about today is an experiment at first and now part of our firm, to maybe illustrate the use of technology and where it can help and where it can hurt presumably. We have talked a little bit about, no doubt in a future podcast we’ll touch on Twitter and its growth. We’ve been on Twitter for quite a while and its not new to us but its now hitting the mainstream so its sort of fun to watch. But what we did probably 5 years ago was start an unknown concept called Knowledge Management. And why we want to talk about it today was because I think it really helps illustrate a little bit about where, if you’re going to practice in this area, where we found it was effective to focus. And we’ve grown from a small operation in our firm of Knowledge Management now to a designated lawyer and a systemized procedure for Knowledge Management.

But let’s start first of all, if you could, explain to us what you’re talking about Knowledge Management.

Suzana Popovic-Montag: Well Ian as lawyers, our job is really to communicate knowledge and information to our clients to assist them with their particular issues. And when you specialize in an area of law, as estates and trusts for instance, you need to really know your area of law and you need to know it better than anyone else. And because there is so much information out there and because the law does tend to change, maybe not radically but certainly there are cases that update other cases. And you want to stay on the leading edge of every bit of information you can. You try to, and we’ve tried to, sort of co-ordinate our information, so that it’s in one place. That information being the legal information, that being precedents, that being case law, that being anything that we rely on in our daily practices and make it available to all of us internally. And that’s what we really mean by Knowledge Management. Managing our knowledge within our firm.

Ian Hull: And it really is more than just precedent management. As lawyers and as any professional, you do something once and you think well, you know what, I might be able to tweak that the next time and use the law to that product again. That’s not what this is about. This isn’t about just saving the latest Statement of Claim you drew in a pile in the corner. This is about organizing office information and inside and outside information. And we broke it down into many categories and I think part of it that’s worth talking about is it’s a testament to the organization skills of our Manager of Knowledge Management, Sharon Davis. But one of the things that I’m struck by is that there are sort of two components to Knowledge Management. There’s the legal substantive component which we will talk about but there’s also the non-legal. How many times a day are we asked for do you know someone who can do x or y, who are in the affiliated professional sphere of our day. And we have branched our Knowledge Management into that as well. And maybe you could give us an illustration of the kinds of sources that we might have in Knowledge Management to help move that issue along in the day.

Suzana Popovic-Montag: Well Ian, many times we’ll have different issues arise in our practice like the need, for instance, for a capacity assessor. The need, for instance, of a real estate lawyer who might be able to deal with a particular aspect on an estate matter. We might need contact information for a private investigator, an airship searcher or something like that. And what we’ve done with our Knowledge Management system is create a database of individuals, a list of these people, these go-to’s for everyone to sort of find in one place the quickest answer, so that when someone does say do you know of, we can just go to one place within our system internally and find an answer for that individual. 

Ian Hull: And I think, and we mentioned a couple of podcasts ago, it also is tested individuals. You’re trusted with, you know, how many times if you see an issue for say two years, you think geez, I had a person who did a great job on a triple butterfly succession planning move in Nelson, British Columbia. I just can’t remember the name of that person. You’ve got it in your system. You click it and you find it. And I mean it’s more than a glorified phone book. It’s a glorified service. It is a service to our clients that is available. And to our referring sources, that is available. A: its fast, it’s available to us fast so that helps us. We don’t have to spend a lot of time doing. But B, most importantly, it’s a reliable source and it’s a tested source. And there’s this old saying that garbage in, garbage out in any data organizing and that’s the same with Knowledge Management. If you put garbage in, you put sources in that aren’t trusted, verifiable sources, then when you go and do it quickly and you don’t think and you say there’s the name from Nelson, British Columbia, you’re putting at risk your whole sort of reputation as to a referring source. So that’s the one wing of Knowledge Management that I think that has a global sort of usefulness to it. And the tools that we use with it, the software and stuff, I mean just spend some time on the internet. You’ll see two or three different products. The product we use, of course, is now pretty well out of service but that’s what happens when you use software. You have to manipulate and adapt. And we’re looking at upgrading it and working that around. But I wanted to start there because I thought that was really global use of Knowledge Management.

But now let’s just spend a couple of minutes talking about the specific use of Knowledge Management we do at our estates practice. And I think the easy illustration is drafting solicitors have available to them precedent books that are updated regularly. And so if you’re going to on-line, not just books, but on-line service. So if you have that available, that’s one thing. But if someone says geez, I want to do an RRSP clause and there’s resources available to us as lawyers to look at how it was done before and done in the future. But if you want to have an article on the recent trend of RRSP clauses and think about well, what about adding a different revocation language or something like that, we link that as well. So we have an ability to link to our most recent draft of that clause, we subcategorize that clause to say, you know, to second wife, to first wife. And then the final thing is that we’ll link to a recent article. So that we can refresh and be more enhanced with our analysis. So that we’re not just taking a precedent, popping it in and not thinking. We’re taking a precedent, popping it in, looking at a source document to remind us of the issues we should be tuned into once we’ve taken the document out. And when they’re altogether and in our system we simply have it linked, so it’s not a re-inventing of the wheel.

So from a substantive drafting standpoint, it can mean much more enhanced materials. We obviously don’t…I mean no precedent is worth anything really. It’s just saving you some key strokes. The precedent has to be adapted to your circumstances.

Suzana Popovic-Montag: But it is definitely a good starting point. And particularly we’ve found internally very helpful as we bring in younger, newer lawyers into the system who are trying to learn the whole area of law. It really does help to synthesize the knowledge all in one place. And I think back to the days when we went in law school and we were still looking up in the hard copies of books and things like that. And with the wonders of technology, it has just taken the burden of that research, of that learning, of that locating and made it so much more accessible and easier and faster.

Ian Hull: Absolutely. Alright, well I think that wraps up our talk on technology and Knowledge Management and next week we have a really neat topic on substantive law issues that we want to delve into. So I hope everybody has enjoyed our little soiree outside of the core estate issues. But we’re going to come back with some more substantive stuff. So thank you very much Suzana, and I appreciate everybody joining us today.

Suzana Popovic-Montag: Bye now.

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.

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Listen to The Unique Characteristics of the Estate Retainer

This week on Hull on Estates, Ian Hull and Suzana Popovic-Montag discuss the question of retainers. This topic comes from a seminar at the Law Society of Upper Canada where they had several practitioners in different areas come and talk about their retainers. The question of retainers is a broad question that affects all practices in a similar way.
Specifically Ian and Suzana discuss the unique characteristics of the estate retainier and some of the things they use at their firm to help deliniate their job

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

The Unique Characteristics of the Estate Retainer - Episode #160

Posted on May 3, 2009 by Hull & Hull LLP

Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You’re listening to episode 160 of our podcast on Tuesday, April 28, 2009.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.   Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

Ian Hull:   Hi, it’s Ian Hull.

Suzana Popovic-Montag:   And I’m Suzana Popovic-Montag.

Ian Hull:   And we’re here to host Hull on Estates this week. Please feel free to give us any of your input and look for our blog on a daily basis on estatelaw.hullandhull.com.

Suzana Popovic-Montag:   And if you’d like to leave us any e-mail comments, you can contact us at hull.lawyers@gmail.com. How are you today Ian?

Ian Hull:   I’m okay. I’ve got a wicked cold and I understand you’ve got a car that doesn’t work so we’re both in really good moods so we’re going to use this podcast to bring our spirits up.

Suzana Popovic-Montag:   Looking forward to it, Ian. Good luck to you.

Ian Hull:   One of the things that we thought we’d talk about this week came out of what was a phenomenal seminar at the Law Society of Upper Canada that I attended at. And it was recently held on the whole question of retainers. And you can go to the website of the Law Society and I’m sure you can get the materials which are superb. But what they did was they had several practitioners in different areas of practice come and talk about their retainer. It was called the Annotative Retainer Agreement Series. And each of us…I was fortunate enough to be one of the speakers on estate retainers. And each of us talked about retainer issues. And of course the question of retainer is a broad question that affects all practices in a relatively similar way but there was a criminal practitioner there, there was Richard Bogoroch who was there for the plaintiff’s bar type of retainer with personal injury work. There was Sharon Shore who came from Epstein Cole did an excellent job on dealing with family law retainers. But what we thought we’d talk about today is the unique characteristics of the estate retainer and talk about some of the things that we use at our firm to help delineate our job.

Suzana Popovic-Montag:   And that delineation, Ian, I think is really important, particularly to us where we focus primarily on estate litigation and we know that there are different areas in the estates Bar and there are people who will do estate administration work who can provide tax advice, the corporate advice, the real estate advice, all the kind of advice that we see typically in an estate, but that we don’t really specialize in.

Ian Hull:   And the truth is the nature of the retainer is so crucial. What we try to do is we first of all delineate the nature of the retainer as best we can in the Retainer Agreement itself. We identify if there is a specific aspect of the law suit that we’re pursuing. But the other thing we try to do is follow-up with our clients and make sure that we set out in our letter to them our sort of initial retainer letter, the nature and extent of the work we’re going to do. We know that most cases settle and we know that sometimes we have to deal with administration-like steps at the other end of a settlement but we are typically sort of, in our practice anyway, focusing on the actual contentious side of the matter. And when we’re doing this though we find it’s really vital to make sure that we’ve adequately reviewed the facts from our client. And we encourage our clients to come with, when they’re first meeting, come with sort of a summary or come with some notes, maybe some point forms, so that we can start a really intense dialogue with the client to determine the nature of the retainer.

Suzana Popovic-Montag:   And having our retainer sort of come with our follow-up letter after our first meeting is a little bit different than some practitioners who I know will have people sign retainers in advance. But we feel that this gives people an opportunity to have an understanding of what we think the case is all about and what we will do in terms of the provision of legal services. And also allow individuals to have the time to review our Retainer Agreement so that it’s a meaningful exchange between the two sides.

Ian Hull:   Okay, so once we’ve sort of broken down the nature of the retainer itself, the next step is, of course, to concern ourselves with who are we taking instructions from. And that can be a crucial determination at the outset with estate matters. For example, what we like to do at the outset is insist that we’ll spend a few minutes going through and creating a family tree, just to determine all of the financial interests that are involved, because the legal issues will dovetail almost always into that, and keep coming back to that financial interest and who’s involved, who has a stake in the pie and how do we determine that.

Suzana Popovic-Montag:   And many times we’ll have our elderly clients come in with younger clients, their children for instance, and in those cases, we want to make sure that we’re delineating between whether or not we’re taking instructions from the spouse in her capacity as estate trustee, or whether we’re acting for her in her capacity as a beneficiary of the estate, so in her personal capacity. And so knowing whether the hat that that individual is wearing will help us determine how we can best provide our services to these people.

Ian Hull:   So the question of joint retainer often comes up in an estate practice and it’s a crucial determination. One is if you have say multiple beneficiaries and you’re acting for all of them and they are all in the same financial interest, i.e. they get the same no matter what the turn out of the case. That’s one thing. And then we have a typical clear joint retainer that says that everybody’s got to be on board or we can’t continue to act. But the other one is what Suzana talks about. And let’s spend a minute here on this important delineation between personal interest and fiduciary interest, and why it’s so important that we identify that at the outset with our clients.

So the personal interest, of course, comes from a typical scenario where a person might take under a Will and they have a benefit. They get part of the residue for example. And an easy example is for a son who’s appointed as executor and also gets the crown jewel of the family and that is the grandfather’s clock from their great-great-grandfather. And then he has a personal interest in the estate but he also has a fiduciary obligation to bring in the assets and administer the estate in an even-handed way. So if someone is going to take steps to challenge him from getting that grandfather’s clock, he is conflicted at some level in his role as executor and in his personal interest in getting the grandfather’s clock. So that delineation has to be looked at, and it’s a case-by-case scenario and not always does that conflict knock the son out of the box as a fiduciary. But you have to balance that interest and sometimes you have to go so far as to repair that by having that son retain separate counsel. And Suzana, maybe you can talk a little bit about that kind of strange scenario when you’ve got one individual being represented by two different counsel.

Suzana Popovic-Montag:   Well Ian, you’ve set it up perfectly and that’s exactly what happens in many cases where there is a clear conflict of interest, so that we can’t act for both sides or both hats of that individual is wearing. So they will have two counsel; one representing them in their personal interest; one representing them in their fiduciary interest. And that delineation is really crucial and something that we certainly, in our firm, do our best to document to the extent that we can.

Ian Hull:   And where we see the conflict, we’ll explain to the client at the outset so that they understand. While no one wants to hire another lawyer, it’s another expense and another headache; we’ll explain it very carefully to them as to why.

Suzana Popovic-Montag:   And its also possible in some situations that that individual may have an interest that’s similar to other beneficiaries in the estate who have already got counsel, so that individual may also be able to act for them as well.

Ian Hull:   So efficiencies can play a role in whose going to act for whom, but it can’t be ignored when there’s an obvious conflict.

Now the third part before we wrap up is really some specific aspects of our Retainer Agreement that we include. And it was interesting at the seminar to hear some of other professionals’ takes on some of what we would call the extra clauses. For example, at our firm we have an extra clause dealing with who we can sue.

Suzana Popovic-Montag:   And that’s because we, at our firm, there are individuals who actually act for LawPRO and so we have to provide for the fact that we cannot sue lawyers and make that clear in our Retainer Agreement. We also include a provision in there that we will always recommend, wherever it’s feasible, the possibility of exploring alternative dispute resolution mechanisms so that individuals know that we’re there to do the best job we can in the most efficient fashion possible.

Ian Hull:   And, you know, we put these clauses in for good reasons, legal reasons, but also for good practical reasons. And we want to make it clear to the clients when they come in that no one in our firm can sue a lawyer, and that’s the first part of the agreement. But secondly, more importantly, is that we are canvassing creative ways to solve the problem. And we want to bring that up at the outset so that we can start to canvass them right away. Because sometimes when you raise this clause with the client, they actually say hey, you know what, that’s a really neat idea. I was wondering if we could try something right now and maybe it’s a type of ADR, a type of alternative dispute resolution, because my brother-in-law did mention to me at the barbecue that he thought if we all had a meeting at this time and place, we might be able to talk it through but we need our lawyers there, or something like that. So it triggers the client to think through those kinds of scenarios.

Suzana Popovic-Montag:   And of course, Ian, just to mention, we don’t want to forget that the Law Society of Upper Canada has imposed some client verification and identification requirements recently that we also take particular note of and we’ve taken steps to implement sort of the necessary requirements to ensure that we’re meeting what needs to be done on that end as well.

Ian Hull:   Well that’s great Suzana, that’s a little capsule of some of the retainer issues that we cross in this unique practice of our estates Bar and hopefully some of the comments have been helpful. It’s been enjoyable to be back on Hull on Estates and good to catch up with you Suzana. Thanks very much for joining us today.

Suzana Popovic-Montag:   And thanks to you too Ian. And to our listeners as well. We do look forward to hearing from you. You can send us an e-mail at hull.lawyers@gmail.com or feel free to visit our blog at estatelaw.hullandhull.com. Until our next podcast, thanks very much Ian.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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Listen to Issues the Arise with an Incapable Spouse

This week on Hull on Estate and Succession Planning, Ian and Suzana pick up on the last couple points on the Canadian Conference on Elder Law put on by the Canadian Bar Association conference in Kingston, Ontario on June 9, 2009. They discuss another topic that will come at the conference; the question of family law and elder law. They explore the issue that arises when a couple who is advanced in years, finds one of them to be incapable They also briefly discuss other blogs that are available for those who are interested and they mention a great place to start would be lawblogs.ca.

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

Issues that Arise with an Incapable Spouse - Hull on Estate and Succession Planning #162

Posted on April 28, 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 162 of our podcast on Tuesday, April 28, 2009.

Ian Hull:   Hi Suzana.

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

Ian Hull:   Just great, thanks.

Suzana Popovic-Montag:   That’s good.

Ian Hull:   Okay, well our last podcast we were singing the praises of an upcoming conference by the Ontario Bar Association on Friday, June 12^th in Kingston, Ontario being about elder law and elder law issues. And we wanted to just…we kind of ran out of time on our last one and I think it’s worthwhile just picking up on the last couple of points on that. Again, we think it’s a great program, it’s going to touch both theory and practice and it’s a cross-section of disciplines. So it’s one of those conferences that are really wonderful and a great event to be at if you can be there. You know, from my perspective anyway, Mary-Alice Thompson is a leader down in that community and Professor David Freedman is an award-winning professor down in that community in the area of elder law and estates.

Let’s just touch on, we talked about assessing the assessor and that’s an interesting topic they’re going to be touching on. Another topic that they’re going to be touching on is the question of family law and elder law. And really, I mean I guess what interests me on that topic, and I’m sure this will get dealt with at the seminar because the leading practitioner in the area of family law or a leader is Phil Epstein, who’s going to be speaking at it. And the issue there where we struggle is this. In a situation where you have a married couple and one of the two of them becomes incapable. The family law issues actually become very defined at that time in some situations. And I wanted to just sort of explore that a little bit. And the whole question of separation or the like and what issues play around it. So let’s spend a few minutes today just talking about that.

So if I’m in that situation where I have an advanced years couple who one of them has become incapable, the remaining capable individual may or may not have to face these family law issues. And where they have to face it is, the question becomes, do you need to separate and/or divorce your spouse to get at sufficient assets for you to live the rest of your life? Because it may be in certain situations that, and especially in second family situations, you’ve got split assets. It works fine when you’re both capable because you share the expenses but now you can no longer do that because maybe your spouse has moved into a home and her expenses are allocated there. You’re left with this house that you have to maintain. And it worked fine in a shared environment but it doesn’t work fine now. And I’m sure Phil Epstein will touch on these issues but it is one of those striking issues that really shocks the capable spouse because you raise issues that they’re a perfectly happy couple, they’re in love in every sense and maybe the one who is incapable has not got the same ability to understand that. But you’re then putting to a capable elderly adult the proposition that economically it makes sense for you to divorce your wife while she’s alive.

Suzana Popovic-Montag:   It’s remarkable those issues that arise in these scenarios are really interesting, certainly from a legal perspective. And I imagine particularly so when you’re in, as you say, a second or further marriage situation because many times we’ll see the children of an incapable person will become their guardians or their attorneys and then the question is how, if at all, that they ever provide for a step-parent in those situations. So it raises a lot of issues and I think that Phil is going to do a fantastic job flagging these for people.

Ian Hull:   Well and that’s so true. And really that is the scenario, isn’t it? You get in a situation where your mother becomes incapable. You’re in a second marriage situation and the first marriage kids take over as Power of Attorney. It’s quite a natural transition. And they turn to the step-parent and say “I never really liked you and if you want any money from the fact that mom holds all the assets, good luck”.

Suzana Popovic-Montag:   That’s for sure.

Ian Hull:   And that is not an impossible scenario because if the capable surviving, so to speak, spouse did indeed put his or her assets into the incapable’s hands, the fight is on. And that’s where you come to those kinds of questions that are questions that nobody would be considering when they’re capable.

Suzana Popovic-Montag:   It’s so true.

Ian Hull:   And I guess, I mean one of the lessons is that when you’re especially in a second marriage situation, it’s worthwhile talking to your advisor and saying, okay, what if that scenario happens? It’s not impossible. It’s statistically possible that one becomes capable and one becomes incapable. How’s this going to flow out? And what’s going to happen in terms of the day-to-day care of both the incapable parent and the step-parent? So worthwhile exploring.

The other issue that I thought was a fascinating topic that they’re going to be dealing with is questions of criminal law elements of the elder law. And really that comes down to the whole issue of elder abuse. And what sanctions are available beyond the Civil Courts, and that is the criminal sanctions.

Suzana Popovic-Montag:   And we’re hearing more about this as well, too, because of the advancements in technology and the media and social media in particular, more so than we ever did before. So a lot of attention is being put on this issue and particularly given the increase in the aging population.

Ian Hull:   And we saw, I think, two years ago when we went to the Canadian Conference on Elder Law, they had a whole division of two or three police officers there, speaking and talking about the special units that are being set up all over the country to specifically deal with elder abuse and to use the Criminal Code sanctions which are much stronger, much more powerful and much more effective to stop someone who is draining all of the money from an elderly person, or a rogue individual who has intruded into the lives of that person. The police have the power to do that from a statutory standpoint.

Alright, well as we say, we think it’s going to be a great conference and one of us may even be heading down to it if we can get ourselves organized. But I’m pretty sure it will be a terrific conference for those who get there.

The last thing we wanted to cover in today’s podcast was mix it up a bit. We’ve talked about some legal substantive issues and we also, as zealots about the social media world, we wanted to spend a few minutes on just, for those who know that’s fine, there may be a little refresher for those who don’t know. What other blogs are available? We at Hull & Hull do a daily blog and we’re proud of that daily blog, but it is on estate-related issues. And it may be that some people want to get more expanded and look into other issues. And so we just remind everyone that there’s a great site to start with, and that’s lawblogs.ca.

Suzana Popovic-Montag:   And frankly, it’s amazing how many law blogs there actually are. I know when I looked at that recently and compared the list to even last year, how it’s just exploded in terms of the number of people who are actively and continuously blogging. It really is quite amazing.

Ian Hull:   Oh, it’s fascinating. And it’s really, you know if you go through it. I guess it’s hard to pick favourites and there are literally pages of choices on this. And a lawyer in our office, Sharon Davis, who’s our knowledge management lawyer and knowledge management is an issue we’re going to be talking about at our next podcast, a lawyer at our office, she brought this list to our attention. But I guess we can’t do justice to Canadian law blogs without talking about the hero of log blogs and that’s Rob Hyndman and we’ll have Rob’s law blog link on the show notes. But he practices in technology and business law but he is the true leader in this area. We’re fortunate enough to work with his sister, Sarah Fitzpatrick, and she is of course a big fan of her brother but has always been a real leader in this area too, and been a big help around here to help us work through the blog technology.

Alright, well I think that covers up our topics today. We encourage you to look at the link for the elder law conference. We encourage you to look at the link for the lawblogs.ca and we look forward to our next podcast. Thanks very much Suzana.

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. 

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Listen to Social Media and the Canadian Conference on Elder Law

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss the idea of knowing what is going on around us in social media. They mention the Canadian Conference on Elder Law put on by the Canadian Bar Association conference in Kingston, Ontario on June 9, 2009. One of the first topics at the conference will be on assessing the capacity assessor. Ian and Suzana discuss assessing the assessor and the pros, cons and what should be expected. They talk about what they see in their practice as important elements of a good assessment and where they might see some problems.

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

Social Media and the Canadian Conference on Elder Law - Hull on Estate and Succession Planning #161

Posted on April 22, 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 161 of our podcast on Tuesday, April 21, 2009.

Ian Hull:   Hi Suzana.

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

Ian Hull:    Just great, thanks.

Suzana Popovic-Montag:   That’s good.

Ian Hull:    Excited to be podcasting today.  I did actually manage to get away for a couple of days last week and took my iPod touch with me when I travelled and got caught up on our video because I sometimes don’t get a chance to listen to us on the video and see how it goes and it was kind of fun.  So I was re-invigorated with some new ideas of how we should be presenting.

Suzana Popovic-Montag:   Right.

Ian Hull:    And one of the ideas that I thought would be useful is a big part of what we’re trying to accomplish with our podcasts and video and audio blog is more of, from a succession planning, estate planning perspective, we try to touch on general topic areas.  So I thought what can be helpful is to know what’s going on around us.  We’re in the social media community, we obviously want to spread our word and they want to spread other’s words.  But one of the conferences that’s coming up that I thought was of real interest to those in our field is this Canadian Bar Association Conference and its coming up.  And the neat thing is its coming up in the great town of Kingston, Ontario which hosts the Podcasters Across Borders Conference every June which is a fantastic social media conference.

Suzana Popovic-Montag:   And you go to that every year, don’t you?

Ian Hull:    I try to.  I don’t know if I’ll be able to make it this year because of a family commitment but it’s a great conference on the social media side.  The organizers have put together, it’s an Elder Law Conference.  And I guess the title of it is The Canadian Conference on Elder Law, put on by the Canadian Bar Association.  But what I thought was of interest was some of the topic areas.  And it’s neat to see what are these hot topics in the area of elder law and where people are sort of discussing.  We have been out to the Canadian Conference on Elder Law in Vancouver for a few years now in a row.  A terrific conference and really the leading Continuing Legal Education conference in the country.  And now its being sort of…and this isn’t the first year that this group has done it…it’s sort of being repeated in some ways with great speakers in the Elder Law Conference in Kingston.

Suzana Popovic-Montag:   And its interesting, Ian, with these conferences, they’re not just for lawyers either and some of them are geared to have certainly a legal component to it but there is also you know the police aspect to elder abuse kinds of issues.  There are medical individuals, medical professionals, who come to these conferences.  There’s a wide cross-section of people in addition to lawyers who are actually taking notice of the issues that arise in this whole area.

Ian Hull:    Absolutely and the organizers we know well, its Mary-Alice Thompson from Kingston and Professor David Freedman from Queen’s University.  The conference is theory in practice and because the area of elder law touches both professionals and all various schemes of professionals, the theory in practice theme is really quite interesting.  And one of the first sessions that they’re talking about is assessing the assessor.  And we learned a lot about that quite some time ago in the Re Koch decision which will be in the show notes about what the Courts started to expect about an assessor but that decision is now over a decade old and so its really fascinating dialogue because the question of assessment of the capacity, the whole expectation is so fundamental to elder law.  Because as we know, a finding of incapacity must be made before we can get a guardianship appointment if you go to Court to get a guardian appointed.  And typically a lot of people will say they don’t want their Power of Attorney acted on until there’s a finding of incapacity.

Suzana Popovic-Montag:   That’s right.

Ian Hull:    So that capacity assessor is front line the most important person in the food chain of unloading into this world of incapacity.  And it happens to be the first topic of the seminar they’re going to be doing down in Kingston, this whole question of assessing that capacity assessor and what are the pros, the cons, what should be expected and so on.  So I thought maybe we could take a couple of minutes talking about what we see in our practice as important elements of a good assessment and where we might see some problems with the assessment.

Suzana Popovic-Montag:   And that’s a great idea, Ian, because I know in our companion podcast, Hull on Estates, some of our lawyers have spoken just recently on the issue of capacity assessments and assessors in particular.  And given how important the ultimate finding by an assessor can be, and how it can actually take away one’s liberties, to make sure that that process is properly carried out by someone who’s qualified and knows the legal requisites for a finding of a capacity, I think is just crucial.  And I know you’ve written actually about the topic in the past and I believe it was Hilary Laidlaw, one of our colleagues, has sort of coined a phrase where an assessor has got to probe and verify as part of their testing for capacity.  And maybe we could just flush that out a little bit.

Ian Hull:    Well absolutely because you see really, like you say, its this moment in time where you are going to eliminate freedom essentially to do what you want to do, that the Courts are going to be very sensitive to.  And so as you say, Hilary Laidlaw has been a big proponent of this concept that you need to take 2 steps in the process.  You need to ask the right questions and then you need to verify if those answers make sense and that they are indeed true.  And we’ve had podcasts in the past and we’ve talked a lot about the recent Law Society rules about verifying clients.  And it’s the same thing.  You identify, so you probe, you ask who is your uncle and who is your aunt and maybe ask some questions about their abilities to cognitively follow you along.  And then you follow-up with some verification.  And if, after your meeting, you find out that she was talking about Stephen Harper’s aunt and not her aunt, then the bells go off.  So that’s very true and it’s a good way of looking at it in terms of the analysis, that high expectation to probe and verify in the context of the Courts who are just simply not going to allow you…they’re not going to allow themselves to make a finding of incapacity unless its clear.

Suzana Popovic-Montag:   That’s right.

Ian Hull:    Because of the human impact of that.  I mean, you’re handcuffing this person and they’re not easy handcuffs to get out of.

Suzana Popovic-Montag:   That’s for sure.

Ian Hull:    And we have seen in the past where people want to get out of that, they want to set aside a finding of incapacity and in Ontario we have a whole Board, the Consent and Capacity Board where people can go to.  And it’s a hearing and it’s a really well done process.  The hearing officers are superb and the process is very, in a sense, user-friendly.  But I mean again, once you’ve made that finding of incapacity, it’s very hard to let it go.  And then of course if a judge makes that finding of incapacity, it’s even harder.

Suzana Popovic-Montag:   That’s right.

Ian Hull:    So one of the things I guess I would say as I was looking to assess the assessor is also look at the source.  I mean there’s nothing like delegating to good, authoritative, well-versed people.  And you’re essentially delegating a serious part of the process, whether you’re caring for your mother or father or whether you’re asking as a lawyer or whatever, who you’re going to outsource that job to, you want to make sure is well qualified.  And an easy starting point in Ontario anyway which is great is the Ministry of the Attorney General has a list. And there’s an assessor’s list that we can go to.  So that’s a good starting point and then we can start to look at their qualifications and not be afraid to Google and do all the sorts of things to test it, ask around, like any professional you’re going to get involved.  You’re essentially going to a specialist.  And if you’re going to a specialist, you want to, I think anyway, to say to my clients look, make sure we know who we’re getting ourselves into.

Suzana Popovic-Montag:   And the reason that’s so important, of course, is because the question or the whole threshold of capacity is a legal concept that has to be explained to people who aren’t necessarily qualified as assessors to do the determination.  And many times we’ll see people go to their family doctors to get an assessment of capacity and you want to make sure in those situations that the doctor, even though they are a long-term doctor or a long-term care giver, that they know what is actually required for that finding.  Because it’s very specific and important.

Ian Hull:    Absolutely.  Alright.  Well, we’ve assessed the assessor.  We’ve talked about this terrific conference that’s coming to Kingston.  And I guess if somebody might ask, it’s Friday, June 12^th, 2009 and its being put on by the Ontario Bar Association, Continuing Legal Education in the Elder Law section.  It’s called Elder Law: Theory and Practice.  We may have some more to say about this upcoming conference because of the interesting topics that are going to be canvassed.

So thank you very much for joining us today and thank you Suzana.

Suzana Popovic-Montag:   Thanks very much 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. 

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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. 

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Listen to The Role of the Office of the Public Guardian Trustee

This week on Hull on Estates, Diane Vieira and Bianca La Neve discuss the role of the Office of the Public Guardian Trustee (PGT) in passings of accounts. They talk about the role of this government body, whose job it is to protect the interests of incapable persons, charities and absentees.

They discuss the things to keep in mind when serving the PGT and common issues seen on passings of accounts

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

The Role of the Office of the Public Guardian Trustee - Episode #158

Posted on April 14, 2009 by Hull & Hull LLP

Diane Vieira: Hello and welcome to Hull on Estates. You are listening to episode 158 on Tuesday, April 14^th, 2009.

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.

Diane Vieira: Hi and welcome to another episode of Hull on Estates. I’m Diane Vieira.

Bianca La Neve: And I’m Bianca La Neve.

Diane Vieira: If you want to be heard on Hull on Estates, you can participate by leaving us a comment. You can e-mail us at hull.lawyers@gmail.com or you can visit our blog at estatelaw.hullandhull.com.

Hi Bianca.

Bianca La Neve: Hey Diane. Today I thought we could talk about the role of the Office of the Public Guardian and Trustee in passings of accounts. We usually talk about passings of accounts and the roles of estate trustees and beneficiaries and what can be expected in passings but I thought today it would be interesting to touch upon the role of this government body, the Office of the Public Guardian and Trustee, who’s role it is to protect the interests of incapable persons, charities and absentees.

Diane Vieira: Yes, I think if you practice in the area of estates and you will be preparing or advising clients on their passings of accounts, you will certainly deal with this office sooner or later.

Bianca La Neve: Yes, good point. Now in terms of an overview, the Office of the Public Guardian and Trustee, or the OPGT - we’ll short form it during this podcast - may be required to be served with a passing of accounts application when an incapable person, an absentee or a charity has the beneficial interest in an estate or trust or the guardian or attorney of an incapable person or absentee applies to pass their accounts.

Diane Vieira: Yes, when an incapable person is a beneficiary of an estate or a trust and the estate trustee applies, either compelled to or on a voluntary basis to pass their accounts, the PGT is required to be served if the incapable person doesn’t have a guardian in place to review those passing of accounts.

Bianca La Neve: That’s right. And if you’re…so if there is a guardian or a trustee with authority to act, then the Office of the Public Guardian and Trustee doesn’t have to be involved. But if there isn’t, as Diane mentioned, and you do have to serve the Public Guardian and Trustee, you also then have to serve the incapable person.

Diane Vieira: Yes you should send a copy of the accounts to the incapable person.

Bianca La Neve: Now in some cases, in some situations there may be an incapable person with an interest in an estate or a trust but there’s actually no person willing or able to act as their litigation guardian for the purposes of the passing of accounts. So if there is no one willing to act or there’s no other person in the estate that has a similar interest that could indirectly protect the incapable person’s interest, then the Office of the Public Guardian and Trustee will perform the role of litigation guardian as a last resort.

Diane Vieira: And one other situation where you should serve the Public Guardian and Trustee is when the estate trustee or the trustee is also the guardian of the person. In that situation, you do have to serve the PGT because the guardian is not going to review their own potential errors.

Bianca La Neve: They’d like to. But they’re not able to. And in these types of situations there’s no real obligation to serve the incapable person but its always good practice to give them a copy of the application as well.

Now we’ve talked about situations where the incapable person as interest in an estate or trust and so we’ve talked about if the incapable person has a guardian but that guardian is also the estate trustee or trustee, then the Public Guardian and Trustee has to be involved. If that incapable person does not have a litigation guardian or someone able to protect their interest, then the Public Guardian and Trustee is involved. And another situation where the Public Guardian and Trustee is necessarily involved is when a guardian or an attorney for property is applying to pass accounts.

Diane Vieira: And in that situation, the incapable person should be served as well and referring to Rule 74.18(3), each person that has a contingent or vested interest in the incapable person’s estate including spouses and adult children and dependant children…well no, actually, dependant children have to be served. And as a matter of practice, you should probably serve the adult children as well.

Bianca La Neve: They’ll probably want a say in the application.

Diane Vieira: Yes.

Bianca La Neve: Now an interesting twist involves an incapable person who is a minor and a minor in Ontario, or for the purposes of Ontario law, is defined as a person under the age of 18. When the incapable person is a minor and has an interest in an estate or a trust, and they do not have a guardian or an attorney for property, then you are required to serve the Office of the Children’s Lawyer but not the Office of the Public Guardian and Trustee. So in this type of situation, the Children’s Lawyer’s Office would be involved to protect the interests of the incapable minor.

Diane Vieira: And just in some situations where you’re serving both the PGT and Office of the Children’s Lawyer, you should serve both but usually the Office of the Children’s Lawyer, the PGT, will have only one office respond to the application, usually the beneficiary who has the bigger interest.

Bianca La Neve: Now Diane, perhaps you can talk about situations involving incapable people or persons who are actually deceased.

Diane Vieira: Yes that’s a good situation if you’re not sure to serve the PGT.   Generally when a guardian or an attorney passes their accounts for a deceased incapable person, service should go to the estate trustee or the person who’s administrating the estate. So there is no requirement to serve the PGT unless the PGT is the estate trustee or there is a Court Order that the PGT has to be served.

Bianca La Neve: So generally the role of the PGT it looks like ends with that incapable person’s passing.

Diane Vieira: Yes.

Bianca La Neve: So now we’ve talked about incapable persons. The Office of the Public Guardian and Trustee also has a role to play in cases involving interests of absentees. Now an absentee is a person who’s whereabouts are unknown and there is no knowledge as to whether this person is alive or dead. And this is different. An absentee is different from an unborn or unascertained person. That type of person usually refers to an issue who if born would be heirs under a Will. And so in the cases of unborn or unascertained individuals, the Office of the Children’s Lawyer would be involved. In cases of absentee persons, the Office of the Public Guardian and Trustee is involved.

Diane Vieira: Yes and when you’re serving the PGT and there’s an absentee person involved, the PGT will require evidence that you have made an effort to search for this person. In our practice generally, depending on how much money is in the estate, we do go ahead and get an investigator and swear an Affidavit as to those efforts.

Bianca La Neve: Very good point. Because also, even if the Public Guardian and Trustee, let’s say, is satisfied as to your efforts to find absentee people, a judge on a passing is still entitled to ask you questions and to satisfy him or herself that sufficient effort has been made to locate this person.

Diane Vieira: Another situation in which the PGT is required to be served is when a charity or a charitable trust applies to pass its accounts or an estate trustee applies to pass their accounts in relation to a Will or an estate that has a charitable bequest.

Bianca La Neve:  And those types of situations, if you actually have a specific named charity, then they’re also required to be served.

Diane Vieira: Yes. Generally when there is a named charity, that charity is served and they’re responsible to review these accounts and if they need to, hire their own counsel. When the PGT becomes involved is when a Will is, for example, very general. It says this bequest to the education of children and the decision is left to the estate trustee to later choose a charity. So when it’s a charitable bequest, and not a specific named charity, is when the PGT will actually participate and review the passings on behalf of the general charitable bequest.

Bianca La Neve: And I think that was probably a policy decision with the Office of the Public Guardian and Trustee. They obviously have oversight authority or supervisory role over all charities in Ontario. But because of the mass number of charities involved, and the mass number of Wills in which specific charities are named and are given bequests, then its sort of a policy decision for the Office of the Public Guardian and Trustee to be involved only when, as Diane pointed out, it’s a sort of general charitable intent in the Will and not a specific named charity. Because in those situations, the Public Guardian and Trustee’s position is that the specific named charity is a legal entity and can properly represent its own legal interests.

Diane Vieira: I think we should just review some things that you should keep in mind when you’re serving the PGT and who to serve. First of all, you should serve the Toronto office unless a previous arrangement has been made otherwise with one of their satellite offices. And if you are serving on behalf of a charitable interest, its good to include that your account is going to the attention of the Charitable Property Division, just so things happen a bit more quicker.

Bianca La Neve: And there is a specific provision in the Rule 74.18(4) that requires 45 days’ notice of an application to pass accounts. And the Office of the Public Guardian and Trustee is quite strict about enforcing this minimum notice requirement. They are served on a daily basis with multiple passings of accounts and so they require the time to be able to review the accounts and devote the appropriate amount of time and attention to each particular passing. So make sure you comply with the 45 day minimum notice period.

Diane Vieira: And with that in mind, as you say Bianca, they are a very busy office with a lot of passings of accounts to review so in order to make things as efficient as possible, you should include a Notice of Application to pass accounts in the proper form. So you should include your accounts in the proper form, an Affidavit of Verification, any Will or guardianship or Power of Attorney documents, the last Judgment for the passing of accounts. Don’t just assume that they’ll have reference to it. Any relevant Orders. A draft Judgment would also be good to include. And don’t send all your vouchers in. They will request the ones they need to see.

Bianca La Neve: That’s right. Again its about trying to make the process easier for them but not necessarily overloading them with information that may or may not be relevant or may or may not assist them.

Now just quickly, we can touch on some common issues seen on passings of accounts. We won’t do an exhaustive review here. That’s probably been done in other podcasts. But generally when the Public Guardian and Trustee will come back to you and ask for more information is in situations where there has been a failure to keep adequate accounts, when the accounts don’t balance. I mean, this you would think is self-explanatory but you should actually make sure that your accounts balance before you provide a copy to the Public Guardian and Trustee. If there’s insufficient description of any transactions that don’t allow on its face the Public Guardian and Trustee to understand what’s going on, and when there are legal accounts and accounting invoices, you should have sufficient information to adequately distinguish between executor’s work as the case may be, and professional services rendered.

Diane Vieira: And also they will review the compensation issues if you’re charging compensation on things that are basically book entries when there’s a net loss on investments and to prepare the incapable person’s income taxes, for example.

Bianca La Neve: Okay Diane, I think that covers sort of a basic review of the role of the Public Guardian and Trustee in a passing of accounts.

Diane Vieira: Yes its an important office. And just I guess if I had to leave with one thought is they are very busy and it can be a time-consuming process so make sure everything is in order and serve them as soon as you can.

Bianca La Neve: Great. Thanks Diane.

Diane Vieira: Thanks Bianca.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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Listen to What Do We Expect From Our Clients?

This week on Hull and Estate and Succession Planning, Ian and Suzana discuss what we expect and what we can expect from clients. This topic was prompted by the recent changes by the Law Society to the bylaws in terms of what to ask clients. They discuss the changes and how they are important in the general practice and in specific practice.

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

What Do We Expect From Our Clients? - Hull on Estate and Succession Planning #159

Posted on April 7, 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 159 of our podcast on Tuesday, April 7^th, 2009.

Hi there Ian.

Ian Hull:   Hi Suzana.

Suzana Popovic-Montag:   How are you today?

Ian Hull:   Terrific, thank you.

Suzana Popovic-Montag:   That’s good.

Ian Hull:   So today we thought we’d talk about and consider a bit of a pet peeve of ours and that is, what do we expect and what can we expect from clients. And we spend a lot of time on our podcasts and in our profession worrying about what clients can expect of us. But I thought today we’d twist it around a little bit. And the reason why, I mean, one of the things that triggered it is for those of you who have been following some changes in the Law Society, there are some recent changes to the Rules in terms of what we must now ask our clients. And I thought it was a good segway. The by-law was changed and we get into the details of that. Basically the Law Society has said, and it comes in large part from money-laundering concerns and things like that, but the Law Society has said lawyers need to do the following: they need to get identification from their client and they have to verify that that identification is valid. And what does that mean to an estate practice? Well what it means to an estate practice is it’s a good reminder of the necessity for full disclosure. 

So we thought we’d spend a few minutes about the new Rules, just because I think they are interesting in the context of estates. And secondly, spend a few minutes about, you know, the importance of disclosure.

Suzana Popovic-Montag:   And really, Ian, as a result of a change to the by-law, it’s not really that much of a more onerous job for us as practitioners because we would always identify our clients. People would come in; we’d get the specifics in terms of their addresses, their locations, how we can nail them down in the future and get hold of them if we needed to. But we’re now taking it that one step further and actually verifying that with photo i.d. basically. I think that really is the only additional thing. And many people are probably doing that to begin with anyways. And when we talk about the different roles that our clients can have or what different capacities they can come to us as, when we’re dealing with a client who is a Power of Attorney for instance, then additional obligations will arise for us as practitioners in order to verify that these individuals are who they say they are. And I thought maybe we could flesh that out a little bit.

Ian Hull:   For sure. I mean, I think what the Rule says is that we have to do this work, this identification and verification with due diligence. So I want to turn that back on the clients and say to our clients, and I’ll often do this, is say look, I need due diligence on your part. If you’re going to come and see us with your estate planning expectations, or your estate litigation concerns and expectations, we need you to talk about a topic that is not easy to talk about (a) that’s death; and (b) talk about specifics that (b) that’s personal. So death and personal information is always hard to pull out of a client. But I think these Rules help sort of highlight the importance of it in our general practice. But even let’s talk about how they are so important in our specific practice.

Suzana Popovic-Montag:   And the truth is, Ian, when we get people coming to us in these situations, they’re not at the easiest points in their life. And so to get information from them is difficult at the best of times, let alone under these circumstances. And having them bring all the requisite documentation with them, so that we’ve got the comfort of knowing we’ve got the full story, and that we’ve got the full, you know, the verification and identification stuff that is required of us so that’s in our file and we can use that in the future, if and when need be.

Ian Hull:   Absolutely. So I look at it, and I say to our clients look, you now have to verify and identify. Or identify first and then verify. And identify is sitting down. If you’re going to, for example, want to get an estate plan organized, and you’re getting ready to go to the meeting and hopefully you’ve got maybe a checklist from your lawyer before you get there, or you arrive and you get a checklist and you go through it. Identify. Well, you know what, if you’ve got different assets, like RRSP designations to identify, or insurance designations to identify, that can have an integral part in the estate plan. And although our job is expected to pull that information out, you’re looking at time and expense and additional effort for work that you can do. And we call it homework.

Suzana Popovic-Montag:   Right.

Ian Hull:   Do your homework before you come to us. So that’s one part of it. And the second part of it is, we just encourage our clients, and it’s certainly not necessarily on the non-contentious side, but on the contentious side, we encourage our clients not to hold back.

Suzana Popovic-Montag:   Yes.

Ian Hull:   Sorry.

Suzana Popovic-Montag:   And that’s a really important thing because people are hesitant enough to talk to lawyers at the best of times. But when you’re in these circumstances where things that may not necessarily appear important to the clients, could be very important to us. And so to the extent that we can draw that out, that’s great from our perspective. But to the extent that that can come to us voluntarily as well can only help in these situations.

Ian Hull:   Absolutely. And some of our clients want to second-guess us. And that’s fine at some level. I mean lots of clients are very, you know, astute and they know what they want and don’t want. But I remember a case not so long ago where we were going through this document. It started off to be a simple probate application. I asked for a copy of the Will and I was given a photocopy. And I said well, okay, I need the original. And my client said, okay, why do we need that? Not that she didn’t want to give it to me; just didn’t understand it. She said fine. And then sure enough, the original arrived. She worked downtown and dropped it off at my office and the original arrived and it had handwritten markings on it. So all of a sudden turning what was a very simple administration into what has now turned into a bit of a contentious and a bit of an awkward probate application. So don’t presume that that little note in the corner, you know, Go Jays Go, and that’s being said because we won at the home opener yesterday. There’s a lot more that can come from that. And really it just comes down to, I mean, this is common sense. But I was struck by the impact that the new Rules are having on lawyers. And struck by the fact that it reminds me of the importance of clients to give us that identification and verification information.

So today we just wanted to highlight that and for those of you who want to go to the new Rules, Rule 7.1 of the By-laws of the Law Society of Upper Canada, on their webpage it’s located. It identifies the Rules with some particularity. It gives examples of specific expectations that a lawyer is going to have to verify. And so, for example, if there’s corporate holdings or partnership holdings, there are new Rules for us. So when you get down and sit down with the lawyer and they start asking you questions that don’t make sense, remember that (a) it is actually because we’re being told we have to by our new Rules; but (b) some of that information can be truly important, can impact either an estate litigation matter, a non-contentious matter. So don’t hold back, in my view, and you’ll save a lot of time and money and effort.

Suzana Popovic-Montag:   And I think that brings us to the end of this podcast. Thank you very much, 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.

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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. 

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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. 

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Listen to The Legal and Substantive Role of the Executor

This week on Hull on Estates Ian Hull and Suzana Popovic-Montag discuss the legal and substantive role of the executor at the time of death. They focus on the question of who has right and control over the body and refer to the 2001 decision of Sopinka vs. Sopinka.

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

The Legal and Substantive Role of the Executor - Episode #154

Posted on March 18^th, 2009 by Hull & Hull LLP

Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You’re listening to episode 154 of our podcast on Tuesday, March 17^th, 2009.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.   Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

Ian Hull:   Hi it’s Ian Hull.

Suzana Popovic-Montag:  And I’m Suzana Popovic-Montag and we’re pleased to be back on Hull on Estates. If you want to be heard on Hull on Estates you can participate by leaving us a comment. You can feel free to e-mail us at hull.lawyers@gmail.com.  

Ian Hull:   Or please feel free to visit our daily blog at estatelaw.hullandhull.com.

Suzana Popovic-Montag:   So how are you today Ian?

Ian Hull:   Just terrific, thank you.

Suzana Popovic-Montag:   That’s good. I see you’re wearing lots of green on this special St. Patrick’s Day.

Ian Hull:   Oh absolutely, there’s more beer to come.

Suzana Popovic-Montag:   That’s the spirit.

Ian Hull:   So I think what we thought we’d try to do today anyway was to speak about what can be a difficult time when you are appointed an executor and talk a little bit about the legal and substantive role of an executor at the so-called time of death.

So what do we do with the body and what is our role as executor? The one fundamental substantive law point that I always try to make sure my clients understand is that the Will speaks from death. So it is the governing document and the one that you have authority at the instance of death to proceed with. With that, of course, gives you the authority but also gives you the curse of liability and obligation as well. So we can’t forget that the Will speaks from death.

Suzana Popovic-Montag:   And so, of course, the first issue for someone dealing with a death in the family is to actually locate that Will. And normally what we’ll see is one of the first calls is made to the lawyer for the deceased to the extent that that individual is known.

Ian Hull:  And there are other immediate searches that are obvious as well. Of course, the safety deposit box, the dresser drawer, and all of the conventional spots you’d want to look. But we always encourage our clients to tell our executors (a) they have the job; and (b) where the Will will be located.

Suzana Popovic-Montag:   And the reason that that’s so important, Ian, is of course because the executor is the individual who has the authority to decide how to deal with the body once they have that authority vested in them.

Ian Hull:   So that role of the executor and one that sometimes is overlooked is this control and custody of the body, so to speak. What are the first steps, and I want to just say as an aside that there’s a great article by Paul Trudelle on our web page. He spoke not at our last breakfast but the one before, on this topic. But what is, speaking of the body so to speak, what is the first step an executor’s role may or may not revolve around?

Suzana Popovic-Montag:   Well Ian, I think what you’re suggesting is the funeral arrangements, is that right?

Ian Hull:   Yes and the question is, of course, lots of times the executor has nothing to do with the funeral arrangements and it is entirely the role of the family. But one can’t forget that they have the legal and substantive obligation of dealing with the body and that may include the funeral arrangements.

Alright, so in terms of case law on this area, the one that we’ll put on the show notes is the Sopinka v. Sopinka decision, it’s a 2001 decision and it’s in the Ontario Court. And in that case there was a fairly dramatic series of events that touched on the role of the executor. We’ll let you read the case for its facts. But one of the things that it tried to do anyway was focus on the question of who has rights and control and custody over the body and reminds us under the provisions of the Trustee Act then what can and cannot occur.

We’re also reminded in that decision, of course, that Section 3 of the Act provides that where a trustee dies, the personal representative of the trustee is capable of exercising the powers of the trust of the deceased. So in the Sopinka case there was a situation where the appointed estate trustee had died and they had to move quickly and the question of what the rights of the succeeding trustee were, were developed and discussed pretty extensively in Sopinka.

Suzana Popovic-Montag:   And as unusual and dare I say morbid as it sounds, Ian, these kinds of fights do happen. We do see people arguing over how someone’s remains should be treated. Whether, for instance, they ought to be cremated or they should be buried. And in the Sopinka decision, we saw a struggle between the parent of the deceased and their children. And it was a very interesting case that I suggest to anyone who’s interested in the area to certainly take a look at because the case sets out a number of observations which are important, particularly when you’re dealing with these scenarios. And the first, of course, is the fact that the case underscored that the duty to dispose of the body included the right to actually have possession or custody of the body for the purposes of that disposition.

Ian Hull:   And then the rights in respect of burial continued as well and something that the executor was obligated to do. It was also the question of the duty to dispose of the body in circumstances where so done in a dignified and sensible fashion.

Suzana Popovic-Montag:    And one of the points that was particularly interesting and stressed by the Court was the fact that the duty to have control and custody of the body by an executor can trump the surviving spouse’s rights. And that might come as a little bit of a surprise to the average lay person who may not be aware of the fact that they wouldn’t necessarily stand in priority in those circumstances.

Ian Hull:   And I think Paul Trudelle’s article is great because it points out there is a case, Trillium Gift of Life Network decision. The interesting thing there is that it points out the fact that there’s no property in the deceased’s body but you have, the estate trustee is entitled to possession and custody of the body in their role.

So in terms of also considering some of the other obligations of the trustees and the powers that can be granted, when you’re in a situation where there’s a conflicting scenario, and Sopinka dealt with that as well, there’s also opportunities where sometimes the executor is faced with religious tensions and stresses in respect of what should or should not be done.

Suzana Popovic-Montag:   And I refer you to, and you’ll see a reference to it in the show notes, the decision of Salley v. Reichkart where the Court specifically dealt with whether or not religion had any bearing on the authority of an executor to deal with the body.

Ian Hull:   Again, Paul’s paper delves into this really effectively in terms of that question but its one that can’t be forgotten and also should be very seriously considered in terms of what our general theme of dealing with our clients is, we remind them to please communicate what your hopes and wishes are, especially if they are focused around some cultural or religious beliefs. Make sure those are communicated both; sometimes you can do it in the Will, but also verbally to your family and the executor.

Suzana Popovic-Montag:   And that, of course, Ian, coupled with where to find the Will so that the individual who is the executor can have that opportunity to deal with the funeral arrangements right away, if he or she chooses to do so in a fashion different from what perhaps the family might otherwise want.

Ian Hull:   So my final comment before we wind up this podcast talks about the question of really the donation of body parts or the body itself. And, of course, there’s an Act in Ontario, and generally most provinces deal with this issue of gifting your body. I was struck by the importance of this when I was recently taken through a tour of Toronto General Hospital of the lab where they deal with the whole question of defibrillation and the kinds of experimentation that’s going on. And we were taken through the lab and shown where different body parts are used when someone passes away for experimental purposes in the subsequent time, which is obviously fairly limited. But the magic that they can pull out of the information, that they can pull out of those scenarios is remarkable. And so the question of gifting body parts and the body itself is something that’s worthwhile discussing with your family because you can pass on an incredible legacy even considering that as well.

So I think that winds up our podcast for today. We wanted to just touch on the core, substantive issues that sometimes are forgotten and the tremendous obligations that are put on to executors that we’ve talked about in the past, on accounting obligations, obligations to file tax returns. But one that is sometimes forgotten, and that is, the obligation to deal with the body immediately arising upon death.

Suzana Popovic-Montag:   Well Ian, notwithstanding that note that we’ll be leaving this podcast on, it was a pleasure having the chance to join you again on Hull on Estates. And we do look forward to hearing from our listeners. Again, if you would like to provide us with some feedback, feel free to e-mail us at hull.lawyers@gmail.com.

Ian Hull:   And always check out our web page and check out our blog. Our web page at hullandhull.com and please feel free to give us feedback. So thank you very much, Suzana.

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

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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Listen to The Estate Free - Part 2

This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on Estate Freezes and discuss the rights that shareholders have.

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

The Estate Freeze - Part 2 - Hull on Estate and Succession Planning #154

Posted on March 3^rd, 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 154 of our podcast on Tuesday, March 3^rd, 2009.

Ian Hull:   Hi Suzana.

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

Ian Hull:   I’m just great, thank you.

Suzana Popovic-Montag:   That’s good.

Ian Hull:   All is well.

Suzana Popovic-Montag:   That’s great.

Ian Hull:   So why don’t we continue on with our discussion about the estate freeze and the unique characteristic of it because I think what is going to help us lead to and that is the component of the trust component that we talked about earlier, in a future podcast we can start to develop the actual trust that we create in the context of the estate freeze. So we remember that the settlor, the head or the heads of the family has passed on the wealth by freezing the asset, holding onto the core base of the value of the company at the date of the freeze and allowing for the growth. And the growth in our illustration was into a trust. So we can explore what that means more about the trust. But first of all, let’s talk about what we promised we’d talk about in our last podcast.   And that is, with these growth shares, what are these new shareholders going to be all about? And what rights do they have? And if they’re minor children, of course, what rights does someone who you don’t even know possibly going to be pursuing? 

And we talked about, in the last podcast, concepts of wind-up, concepts of oppression remedy, concepts of the Business Corporations statute remedies and concepts of accountability.

Suzana Popovic-Montag:   And you know, Ian, I’m just smiling because I’m thinking these concepts sound somewhat complicated to the average person but yet we do see a lot of estate freezes and they can be in corporations that are worth millions of dollars, or they can be in this closely-held, you know, mom and pop little corporation that is small enough but has made a significant amount of money that people do start planning for the tax consequences of that. And so whereas you would have a situation where dad was the patriarch and made all the decisions for the corporation, he didn’t have to account to anyone, things were fine as long as there was food on the table, no one had any questions or raised any issues, and things just moved on well. But once you get into this formalized corporate environment and you set up these arrangements, there are consequences that may come as a shock, for instance, to the individuals who are involved. So when we talk about the accountability, and talk about the fact that there has to be disclosure, some of the corporate concepts that we are alluding to are the fact that, for instance, you have to have annual shareholder meetings. You have to prepare audited financial statements that are provided to people…this is your family that in the past you may never have had to account to or provide any information to. So I think it just takes a little bit of a change in thinking when you’re in these environments.

Ian Hull:   Well that’s true and what you’re essentially doing is, you’re professionalizing the family. And because of that, it brings with it its own tensions because the head or the heads of the family didn’t typically run the company probably that way. And now they’re having to professionalize this with their kids. And their kids can go out and hire their own lawyers who can send a letter under the Business Corporations Act, either provincially or federally, compelling an audit, or compelling a shareholder’s meeting to be attended to, or compelling disclosure of things like salary, things like what were the officers and directors getting paid. Those kinds of things are basic remedies that a new shareholder like that will have. And they are set out in statute and they are very powerful tools to keeping in check the whole balance of this. And you know, some people can address some of these issues through a shareholder’s agreement but there are some fundamental rights at law that you just can’t prevent.

Suzana Popovic-Montag:   And overlay above that the family dynamics, that this is…it’s not just a business environment anymore. It’s a business environment with family members which adds a whole layer of complexity, I think, to the situation.

Ian Hull:   For sure. So the other two components of these rights that we mentioned, well there are sort of three components. The accountability, and that is generally not just the financial statements but the accounting that needs to be undertaken and the right of a shareholder to maybe, you know, compel a disclosure of the general ledger or something like that, where we get into the real nitty-gritty.

The next component is that concept of oppression remedies, and the availability of a shareholder to take steps in that world, a separate world in and of itself.

Suzana Popovic-Montag:   And that, Ian, is an interesting concept because we always sort of traditionally think about majority rules and has all the power and control. But under the statutes, both provincially and federally, as you say, there are remedies available to minor shareholders. So when you’ve got a minority interest, you still have rights and remedies available to you that you might not otherwise expect and those rights can be quite significant.

Ian Hull:  Absolutely. And the rights of the minor, now we’re using that in the corporate sense now. We usually use it in the estates sense, the not under age but the shareholders who hold smaller interests in the company. The oppression remedy rights are typically pursued by a separate action against the officers and directors of the company and against others who may or may not be part of, say there’s a conspiracy theory or something that’s developed. But that in and of itself is a lawsuit and it’s a lawsuit where you are governed by the provincial or federal statutes, depending on what your corporation has been incorporated under. And you are claiming all of the additional rights that you would claim because you are saying that basically the majority is controlling you improperly. And that, of course, is something to someone who previously had run the company as he or she felt at will, can be a very disruptive piece of litigation. And private, personal matters get raised in the litigation and private and personal things get said in the litigation. So it can be very divisive but it is an important tool that is available, so that there is no true tyranny of the majority when you’re running a company.

Suzana Popovic-Montag:   Ian, can you give some concrete examples of possible remedies that might be available when you pursue this kind of a remedy as an allegedly oppressed shareholder?

Ian Hull:   Well, one of the remedies that ties into our last sort of comment is the right to wind-up the corporation. And the wind-up rights of a shareholder is the most draconian step available but one that, of course, brings with it powerful results.

Suzana Popovic-Montag:  That was exactly the answer I was trying to elicit because it does show how powerful, as you say, this remedy is. So notwithstanding the fact that you may not have the majority interest, you can have quite an impact on the viability and continuation of a corporation.

Ian Hull:   That’s right. And this kind of litigation is not something that is just about getting more paper pushed and disclosing and disclosing, although that’s a very important part of it, getting access to the business records of the company. The secondary aspect of it is this hammer, and that is the wind-up rights that could get instituted in the context of that litigation. Now when anyone starts one of these beautiful estate freezes and coming back to the happy time when we estate freeze, nobody talks about the disaster on the other end that could come about. And there are, of course, fundamental steps that can be taken to prevent those disasters, one of which is the organizing of the family dynamics through things like family meetings, full discussion, full understanding of the new shareholders. But also, of course, is the corporate and the legal overlay of things like imposing shareholder’s agreements into the process so that when we get to log jams or we get to disagreement points, it doesn’t result in what is the third step, and that is, typically aggressive, contentious litigation, corporate litigation. And we, of course, have seen that with high profile family businesses that have entered into this kind of disastrous piece of litigation. But although there is no quick fix, there are options available.

So I think that sort of winds up what we’ll call our sort of 30,000 foot summary of estate freezes. There’ll be some more discussion on that and as I say, we’ll develop some of the concepts of what we do with the trust arrangement once that’s been created, but thank you very much.

Suzana Popovic-Montag:   Thanks to you, Ian.

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Listen to How Capacity Can Impact on Efforts to Create a Decision Making Tree

This week on Hull on Estate and Succession Planning, Ian and Suzana discuss how capacity and one's capacity can impact on efforts to create a decision making tree.

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

How Capacity Can Impact on Efforts to Create a Decision Making Tree - Hull on Estate and Succession Planning #151

Posted on February 12^th, 2009 by Hull & Hull LLP

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by Ian Hull and Suzana Popovic-Montag. These podcasts 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 151 of our podcast on Tuesday, February 10, 2009.

Ian Hull: Hi Suzana.

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

Ian Hull: Great thanks.

Suzana Popovic-Montag: That’s good.

Ian Hull: So continuing on with our discussion about the corporate issues and sort of some of the fall out of some of those expectations with clients, I thought I would react to a question that we got in and remind everyone that please feel free to obviously go to our daily blog. Our e-mail address is hullandhull@gmail.com and then our daily blog is at estatelaw.hullandhull.com. 

And one of the questions that was sent to us and I thought it was sort of an interesting starting point to where we’ve been directing our discussions is the whole question of really how capacity and one’s capacity can impact on efforts to create a decision making tree.   And what I’m getting at there is, is that our shareholders’ agreements that we’ve talked about and encouraged our clients to develop and work through create a decision making tree typically. And we can talk about how that tree is set up today but one of the overlying facts is that if you’ve done all this hard work to create an ability to have some consensus building, decision making impact from everyone approach, what happens when the head or the heads of the family does not have capacity or is starting to lose capacity? 

And so what I thought we’d do today is talk about first of all, let’s start with the decision making tree and what are some of the considerations you might put into your shareholders’ agreement. And then sort of overlay some of that comment on how we struggle with questions of capacity.

Suzana Popovic-Montag: And Ian, really within this forum when we’re talking about, you know, this openness, this communication and speaking with family, it sort of makes sense to segway these kinds of considerations as part and parcel of this whole planning, I think because while you’re demonstrating to individuals how it is that you’d like to see things unfold, you can also dovetail in these considerations of what you’d like to see happen if you can no longer be in control or you can no longer direct that process. So I think it really lends itself well to the whole forum while this is being discussed at the same time.

Ian Hull: So the first question is, who is going to make the decisions and how do we effect that decision making tree in the context of what happens if that person is (a) unable to maybe with lack of capacity or (b) isn’t in the country anymore, goes down to Florida for 6 months. The whole question of decision making and so forth and there are different models. And one of the models that can be effective is the transitional decision making tree where you put the President in, one family member is a President for 2 years and then the Board of Directors votes in whether or not the President should be removed and replaced by another family member. Or you have automatic revolving presidencies in the family holding company or the operating company, that kind of thing. Or you allow for some sort of Chairman of the Board role for the head or the heads of the family.  And you allow some super powers within that role which maybe discretion. For example, the head or the heads of the family can be the only one who decides ultimately whether or not the company may borrow. Or they may decide whether or not the company may sell shares and so forth. And then trickle down to the President who will have day-to-day operational decisions. Those are the kinds of things. Who are making the decisions, what decisions need to be made. All of that has to be carefully sort of considered in the context of what kind of business you’re running.

Suzana Popovic-Montag: Now how would Powers of Attorney or guardianship appointments fall into that model according to the way that you’ve just described that?

Ian Hull: Well I think that’s a good question. And I’m not sure that it would be sensible in a lot of cases to do just the blanket Power of Attorney. And sometimes a really well-drafted, refined Power of Attorney is very effective where you then don’t give blanket control away, but you give specific control away. And that helps you; I mean again, some of these considerations, you know, let’s look at basic corporate law. If you’ve got a corporation and you’ve got shareholders, what’s sufficient for quorum? What’s sufficient for lending powers? What’s sufficient for some of the core financial decisions you’re going to have to make in terms of participation? And you may want to tune the Power of Attorney document and fine-tune it to reflect on some of those issues that you know and you can anticipate.

So if you’re in a business where you are buying a lot of inventory and you are going in and out of lines of credit regularly, is there a reason to have you know a super power role of a CEO in there and so forth.

Suzana Popovic-Montag: That’s good. 

Ian Hull: So one of the other things that we struggle with and the question of the Power of Attorney ties into this as well is, are we looking for unanimous vote or are we looking for majority rules? Are we looking for, as I said earlier, some sort of super power rules? And those are the kind of considerations again we want to look at. Not as much on the capacity issue because if we fine-tune or create our Power of Attorney well enough, but in an Power of Attorney document we will often see more than one attorney. And does that make sense when you may have in your shareholders’ agreement the requirement for unanimous agreement? Maybe it’s a unanimous shareholders’ agreement in terms of voting on certain things, and yet on the Power of Attorney side, you are allowed joint and several decisions. And you might be splitting the decision making tree inadvertently because you’ve created a Power of Attorney document, the head or the heads of the family or someone within the shareholder group has become incapable, yet you haven’t corresponded it to the shareholders’ agreement. So careful consideration needs to be given to the nature and effect of your Power of Attorney and how it will impact on not just operations but how it will impact on the shareholders’ agreement itself.

Suzana Popovic-Montag: And then it sort of underscores the fact that even though there’s so much flexibility that we can build into these documents that are being drafted, the Powers of Attorney, the shareholders’ agreements, nonetheless you want to make sure that they work together well because that’s one of the main purposes of doing it and to make sure that they can co-exist, so to speak, if something were to happen when they have to be called upon.

Ian Hull: Absolutely. And so one of the other mechanisms to break a deadlock that is, and these are just sort of ideas that it depends on each individual situation, but one suggestion I’ve seen used effectively is a compulsory, mandatory ADR or arbitration clause. And one of the triggers on that could be issue by issue. So that if you have a group, for example, a family member. You’ve got parents who are able-bodied and two children and you provide for a deadlock clause in the Power of Attorney. So the parents unfortunately both lose capacity as they age and the children are left with the role as attorneys. You can set up; I’ve seen very effectively, an arbitration clause issue by issue. So you say you put in writing that it has to be…say there’s an issue that needs to be decided…you put it in writing to the other side. So the sister says look, I want to decide whether or not we’re going to go public. And the parents are both incapable, you’re both co-attorneys, you’ve corresponded it to the shareholders’ agreement and you say the mechanism is as follows: the person who has an issue or a problem must write to the other person, set out the issue and within 7 days you have to set up a mechanism or something like that that kicks in an arbitration or mediation process. And you can do it issue by issue so that it creates the tension really focusing on one issue as opposed to the global. Because most of the operational questions aren’t going to be problematic but if you can create sort of a side process with an issue by issue arbitration, mediation clause, it can be an effective tool. And also it gives people the threat that that clause could be used at any and all times and therefore we better behave and look for consensus before those clauses are enforced.

Suzana Popovic-Montag: That’s right.

Ian Hull: So that’s just a nice, you know, illustration of how we can use these break the deadlock clauses. 

So I think that’s really…I hope that we’ve answered the question that was asked talking about the capacity issues and how they overlay in the decision making tree and the shareholders’ agreement context. And we appreciate the question. We’re always looking forward to input at hullandhull@gmail.com.

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

You have been listening to Hull on Estates and Succession Planning by Ian Hull and Suzana Popovic-Montag. The podcast you’ve 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.

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Listen to Managing Estate Issues

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

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

Managing Estate Issues - Hull on Estates Podcast #140

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

Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You’re listening to episode 140 of our podcast on Tuesday, December 9^th, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

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

Ian Hull: And I’m Ian Hull.

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

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

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

Ian Hull: Terrific, thanks.

Suzana Popovic-Montag: That’s good.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Suzana Popovic-Montag: Right.

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

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

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

Ian Hull: Thanks very much, Suzana.

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

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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Listen to Guardianship in Canada

This week on Hull on Estate and Succession Planning, Suzana Popovic-Montag speaks with Rodney Hull about how the law has changed in Canada as it pertains to the appointment of guardians. Rodney suggests that today's laws (post-1994) are clearer than they were in the past.

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

Guardianship in Canada - Hull on Estate and Succession Planning - Podcast #142

Posted on December 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 & 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 142 of our podcast on Tuesday, December 9^th, 2008.

Hello there Rodney.

Rodney Hull: Hi Suzana.

Suzana Popovic-Montag: I’m very pleased to have Rodney Hull join me again this week to fill in for Ian Hull. We’re very pleased to have you and thank you for joining us, Rodney.

Rodney Hull: Thank you very much for having me.

Suzana Popovic-Montag: What I thought we might do a little bit today, since we have you sort of here in the hot seat is to get your thoughts, and I know we’ve talked a lot in the past about capacity litigation and this whole grey zone as to whether or not someone is capable or incapable and what happens if they’re no longer capable. And so I thought having you here, we’d have the opportunity to maybe talk a little bit about the change in the law since when you started practicing back in 1957 and we still called it like a committeeship, and how things may have changed since 1994 when the new Substitute Decisions Act came into place.

Rodney Hull: Well in the pre-1994 legislation, the first distinction was that they changed the fiduciary, the name of the fiduciary from a committee to what it is today, which is the…

Suzana Popovic-Montag: Guardian.

Rodney Hull: Guardian. And basically though the function of the guardian is the same today as it was then.  There is a far superior structure created by the new Substitute Decisions Act which gives a great deal more guidance to persons involved in committeeships as we used to call them. Before you simply applied, we did the same thing: we had psychiatrists and one would say this and one would say that, we would have doctors, we would have bankers, we would have investment people saying whatever their opinion was, and a committee was appointed for the person if it could be shown that the person was not capable of managing his or her affairs. Now it’s exactly the same but we have guidelines, much more direct, clear guidelines as to who we use, what we’re doing, we have referees, we have persons who are directed to make decisions as to whether or not there is the capacity to manage your own affairs. That’s clear, they’ve been set out. Before it was by guess and by God. The judge would listen to the evidence and it would be the judge that made the determination. Not a very satisfactory way of doing it, not because the judges weren’t every bit as good then as they are now or had less ability. It’s just that there is a scientific aspect to the appointment of guardians that I think we didn’t realize as much then as we do now, and that it isn’t basically simply a judicial function. It’s a function that involves almost all the aspects that one would put into ordinary daily living concepts.

Suzana Popovic-Montag: Right and you say that comes about because of the clearer definition that’s set out in our statute now.

Rodney Hull: That is correct. Yes, I think so. I think it gives us great guidance. It makes clear what we should be doing and the procedure is far, far more closely defined. Before it was, as I say, by guess and by God. You brought an application to have a committee appointed under the Act and of course the Children’s Lawyer would sometimes be involved, and the Public Guardian and Trustee was involved, as they are today.

Suzana Popovic-Montag: That’s right. And now that’s certainly from the financial perspective. So when we’re appointing someone to manage property, but how would you say, if at all, its changed in terms of having someone appointed for personal care?

Rodney Hull: That, of course, is probably the most difficult aspect to try and deal with.

Suzana Popovic-Montag: Yeah.

Rodney Hull: You know you…there are some people you don’t want to have the ability to pull the plug on you, that’s for certain. And we can all figure out who some of them are. But basically, I think the ones that are nearest and dearest to you are the ones that should have that decision. There is nothing worse, in my mind, than having no direction really, no written direction, but to have a gathering of 6 or 7 people around and there you are with one of these breathing devices in you, you hate it, your arms are tethered, you can’t tear it out, and they’re sitting around the table arguing whether or not it should be pulled out. We want Dad or Mom or Auntie so and so to have every chance to live and come back, even though the doctors say he or she is going to be a vegetable. That’s not good. But to be able to show the directing people that you have the authority to do it I think is very important. Finding that person is where the rubber hits the road.

Suzana Popovic-Montag: It’s so true and, you know, I wonder, from your experience, like I know certainly judges are reluctant these days to make those kinds of decisions, because those are such personal decisions that they don’t necessarily feel qualified in many cases to make that kind of a determination. Was it any different under the prior legislation?

Rodney Hull: Oh I don’t…I think myself that there was no clear authority to do it but the doctors looked after it pretty well.

Suzana Popovic-Montag: That’s true.

Rodney Hull: But everybody has become very conscious of taking on any responsibility that might involve you with bad feelings between people and I think that basically is how it was done. It was just done by guess and by God and sometimes oxygen didn’t get through, that’s all, sorry about that.

Suzana Popovic-Montag: It really seems to underscore, to me anyway, the importance of this planning, of planning during your lifetime, of telling people what it is you want and why it is you want it so that when these tough decisions have to be made, then you know at least you’ve got some guideposts.

Rodney Hull: You really don’t have to be too clear as to what you want. You don’t want to be going through a lifetime of pain and suffering and stuck with one of those things in your head backed up, and the pump going and you’re there, you’re not conscious. You don’t have to be a Rhodes scholar to figure that person doesn’t want to hang around very long.

Suzana Popovic-Montag: That’s for sure.

Rodney Hull: You know.

Suzana Popovic-Montag: So just in terms of some advice, Rodney, what would you say to people who are dealing with individuals who are sort of in this grey zone, where we’re just not sure if they are fully cognizant and capable or maybe they’re on the cusp of no longer having capacity? Any thoughts or any guidance for us in terms of dealing with those kinds of individuals?

Rodney Hull: Well I guess kindness is the only word that really comes on bidden to the lips. It’s a very difficult responsibility to take on; it’s a very difficult responsibility to pass on. So it just has to be guided by common sense and as I say, kindness, probably.

Suzana Popovic-Montag: Yeah. Well thank you very, very much, Rodney. It was a pleasure having the opportunity to podcast with you again, and to seek some of your thoughts and guidance to us, so thank you for joining us.

Rodney Hull: Thank you, Suzana, for having me.

Suzana Popovic-Montag: And just a quick reminder to everyone to feel free to provide us with any comments, any feedback, at hullandhull@gmail.com or feel free to visit our blog at estatelaw.hullandhull.com.

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 reminded to always speak with a legal professional regarding your specific circumstance.

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

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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.

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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.

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Listen to The Concept of Ethical Wills

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

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

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

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

Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You’re listening to episode 138 of our podcast on Tuesday, November 25^th, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

Ian Hull: Hi this is Ian Hull.

Suzana Popovic-Montag: And Suzana Popovic-Montag.

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

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

How are you today, Ian?

Ian Hull: I’m terrific, Suzana.

Suzana Popovic-Montag: That’s great.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Suzana Popovic-Montag: Thanks very much, Ian.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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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.

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Listen to The Law as it Affects Older Adults

This week on Hull on Estates, Ian Hull and Suzana Popovic-Montag discuss a recent consultation paper from the Law Commission of Ontario(LCO) titled: The Law as it Affects Older Adults. The LCO has initiated a project to develop a legal framework for the law as it affects older persons and will be essential in addressing the needs and experiences of this group.

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

The Law as it Affects Older Adults - Hull on Estates Podcast #134

Posted on October 28^th, 2008 by Hull & Hull LLP

Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You’re listening to episode 134 of our podcast on Tuesday, October 28^th, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

Suzana Popovic-Montag: Hi this is Suzana Popovic-Montag.

Ian Hull: And this is Ian Hull. And we are back on Hull on Estates for, I guess what you indicated at the outset, 134. So it’s been a continuing ride and always interesting. So please, we always look forward to hearing from you. And we encourage you to check out our daily blog. Suzana and I both do a podcast that is an audio and a video podcast plus we have our daily blog at estatelaw.hullandhull.com where we touch on daily issues of interest in the area of estates, not just legal but personal and other matters that we touch on. So please feel free to check us out and also send us a note if you have any comments.

Alright Suzana, well what we were going to talk about today was we thought was an interesting report that hasn’t seen the sort of mainstream media exposure that we think it might not ever see. But we’re going to do our best to put it through the back line of the internet world. And first of all, just by way of background, it’s a report written, a preliminary report written by the Law Commission of Ontario. And this is the successor, thank goodness finally, successor of the Law Reform Commission of Ontario. The Law Reform Commission of Ontario was established, worked intensely in the 70s and the 80s and the 70s in particular with things like changes to the Family Law Act and the Succession Law Reform Act in 1978 when Roy McMurtry was the Attorney-General. In those days, the law was really being pushed by this branch of the government, at that time, the Law Reform Commission. It was reinstated by Michael Bryant in, I forget the exact year, but within the last few years certainly, when the new Liberal government came in. Now they’re not so new but when they first came in, Michael Bryant had the vision to bring it back in. And it really is a source of pushing the law forward. We would not see the family law legislation that we did in the 70s and the 80s, nor would we have seen the changes to the Succession Law Reform Act without the Law Reform Commission then and we’re going to probably hopefully see some real positive impacts of this. So the thing we wanted to talk about was a consultation paper that came out in May of 2008. And again, may have gone below the radar screen for some but is a timely topic for Suzana and I as we are getting organized to head out to Vancouver for our trip for the Canadian Conference on Elder Law where we are speaking at it. That is the preeminent conference on Elder Law and one that we really enjoy speaking at. So in the course of getting ready for that, we have been working through some of the developments in 2008 and this May 2008 Ontario Law Commission of Ontario report was vital and its called “The Law as it affects Older Adults”.

Suzana Popovic-Montag: And it really seems to me, Ian, to be a timely report in the sense that there is so much more of an awareness of, you know, the elderly community and the fact that we have an aging society. And we, frequently when we speak about these topics, we talk about the statistics and they’re very interesting and especially as they get updated on a regular basis.

Ian Hull: Well we’re going to go through some of those statistics, because this report does it. But at 30,000 feet, the report, we want to get through this in this podcast and sort of just give people an idea of it. Its obviously available on the web, easily linked to. But the report really, and the introduction of it, gives us some interesting background facts that we’ll talk about in a moment here. But it really, it touches on sort of the fundamental issues of national and international policy reforms, what’s going on out there, what frameworks we’re working within.

Suzana Popovic-Montag: It also sets out sort of the stereotypes of ageism, paternalism and the law and how it affects the elderly population, as well as sets out an interesting discussion about how age is used as a decision-making criterion in a lot of the legislation that’s existing right now.

Ian Hull: And one area where we constantly struggle is participation in access to the legal system and to the services available for the elderly. When you get into situations of mental cognition and mental frailty, it is so difficult for elderly people to actually engage in the process of the system. So the report goes through a really interesting analysis of that.

Suzana Popovic-Montag: And apart from the legal ramifications or the legal implications of these kinds of discussions, the report also talks about the reality of the relationships that elderly people have with others, with their family members and with society as well. So it sets out some discussions on elder care, elder abuse and also recognizes the fact that older adults are caregivers to others as well.

It then goes on to talk about some secure and dignified living environments and it describes the difference between a retirement home and a nursing home and how the legislation applies to each of those different arrangements.

Ian Hull: So Suzana, coming back to your statistics, what, its always good to get a sort of framework of what we’re working with here and just how important this topic is to Canada over the next twenty years.

Suzana Popovic-Montag: And the numbers really are quite surprising, at least to me they are. The number of Canadians they say that are currently over the age of 65 is expected to double in the next little while and so where it was 4.2 million back in 2005, they’re predicting that its going to be 9.8 million in 2036.

Ian Hull: So with this growing demographic in Canada, we also enjoy a wide variety of diversity within our communities and of course that community is becoming elderly as well. So each of the cultural and unique aspects of the various communities in Canada play out with the elderly and this report really struggles with the different, and that’s why they touch on the international perspective, is because they really do touch on the importance of factoring in elder care, elder law in the context of a cultural nation that Canada is.

Suzana Popovic-Montag: And even within the grouping of the elderly, I think the report is really intuitive in that it recognizes that and sort of breaks it down into three different categories of what they call the young old, the middle old and then the frail old, recognizing the fact that even though someone may be over the age of 65, they can still be a very when they say young old in the sense of very vibrant, very self-independent, and functioning without the assistance of anyone. Whereas there are different gradations of what you’re capable of as you get older.

Ian Hull: And, you know, I think that’s a great illustration of the sort of level of analysis that this consultation report sends us through. It doesn’t just say people are getting old, we have to worry. They get into some really tough questions. And by grading it that way and breaking down the elderly category into sub-categories, identifying our immigrant population, identifying our diverse culture, identifying the fact that we deal with a predominantly female audience at some point in the statistics. This report really is throwing out all of the different variables to the sort of culture of the elderly and how we have to consider them and their place in society. So we also see a unique twist on it too because I think for the first time, certainly in any meaningful way, they throw out the option of considering how we are going to deal with the proportionate growth and also the trend among the fact that this, what we’ll call how you describe, this new categories of the young old, how we’re going to accommodate them in the work force because many of the young old aren’t prepared to simply quit work and in fact with this economic downturn, I’m told that the statistics are that the young old are going to be wanting to stay in or come back into the work force as they feel they have lost enough of their savings that has put themselves in danger. So its going to be an interesting economic tug on the whole economy.

Alright, so now that we’ve talked about sort of the background, and as I say, I think the summary that we started the podcast with really touches on the importance of the various issues. I just wanted to before we close talk about the one point that I thought was really well demonstrated and one that this consultation paper has thrown out to the community to address, and that is, some of the international and national frameworks. And where they started from, and I just think it’s, as a say, it’s a good starting point but its also a good finishing point, was that they looked at the United Nations Principles for Older Persons and they talked about five principles that the United Nations felt should be considered in pursuing elder law and elder care.

Suzana Popovic-Montag: And those five principles were: independence, participation, care, self-fulfilment and dignity, which I think really are five of the main things to keep in mind when you’re dealing with these kinds of situations. And I think very intuitive recognition by the United Nations of the fact that this really does summarize the nub of the issues.

Ian Hull: So they took those five principles and they’ve thrown those out as we have thrown them out, into the gauntlet of how we intend to deal with the law as it affects older adults and that consultation paper is out there, they’re looking for feedback and input and at the very least, it’s a good read and interesting sort of parameters that are set out to give us some food for thought and to see where this law and the important law of elder law will be developing over the next ten years. So kudos to the Law Commission of Ontario to get us thinking and asking really useful and intuitive questions as opposed to just saying there’s a problem, go fix it.

Suzana Popovic-Montag: And I guess that brings us to the end of this podcast. I’m Suzana Popovic-Montag.

Ian Hull: I’m Ian Hull. Thank you very much for listening. And again, please feel free to give us some feedback at hull.lawyers@gmail.com.

Suzana Popovic-Montag: And feel free to visit our blog at estatelaw.hullandhull.com. Thanks very much, Ian.

Ian Hull: Thanks Suzana.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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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.

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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.

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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.

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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.

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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.

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Listen to Fiduciary Accounting

This week on Hull on Estates, Ian Hull and Suzana Popovic-Montag discuss fiduciary accounting. Who is a fiduciary and what is a fiduciary's duty to account? They cite several cases that illustrate  fiduciary accounting rules:

• Re Taerk, [1975] O.R. 482 (C.A.).
• Re Silver Estate, (1999) 31 E.T.R. (2nd) 256.
• Roger Estate v. Leung, [2001] O.J. No. 2171.
• Fair v. Campbell Estate, 2002 3 E.T.R. 3rd 67, Langdon J.
• Fareed v. Wood, 2005 WL 1460361 (Ont. S.C.J.).
• McAllister Estate v. Hudgin, 2008 CanLII 42213 (ON S.C.)

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

Fiduciary Accounting - Hull on Estates Podcast #129

Posted on September 23^rd, 2008 by Hull & Hull LLP

Ian Hull: Hi and welcome to Hull on Estates. You’re listening to Episode #129 of our podcast on Tuesday, September 23^rd, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

Suzana Popovic-Montag: Hello there and welcome to Hull on Estates. I’m Suzana Popovic-Montag.

Ian Hull: And I’m Ian Hull.

Suzana Popovic-Montag: And we’re very happy to be back here on Hull on Estates.

Ian Hull: We sure are. We’re reminding our listeners, of course, as always, please give us feedback, and call in at 206-350-6636.

Suzana Popovic-Montag: And, of course, if you prefer, you can send us an e-mail at hull.lawyers@gmail.com, and I do refer you also to our blog which is estatelaw.hullandhull.com.

Ian Hull: So, Suzana, we are having the pleasure of doing a second take on this Hull on Estates because of technical difficulties, so this one will be absolutely perfect.

Suzana Popovic-Montag: Here’s hoping, that’s for sure.

Ian Hull: The joys of recording in the new age of technology.

Suzana Popovic-Montag: Now if only we could do that on our companion podcast, Hull on Estates and Succession Planning with the video component, Ian.

Ian Hull: No retakes. That’s right, don’t forget please to flip over to our other podcast which we do weekly, Suzana and I do it weekly, and it’s Hull on Estate and Succession Planning. We’re doing it with video streaming and YouTube streaming, as well, so you’ve got an audio or video component of that.  So we recommend that you and welcome you to take a look at that. Right now we’re in the depths of a discussion over Will challenges and what it means to the lay person and what’s involved. But today we wanted to talk about a different issue, and that issue is one of fiduciary accounting. One is, how far is the Court going to impose fiduciary accounting on us and who is the us?

Suzana Popovic-Montag: And I think this topic is actually quite a nice extension from the last Hull on Estate podcast that was done by Natalia Angelini and Chris Graham where they talked a little bit about a solicitor’s liability when dealing with Powers of Attorney and they sort of gave us a little bit of a segway into the whole attorney’s duty to account. 

Ian Hull: And really, it comes down to the question of, first of all, who is a fiduciary and we, as lawyers, are lumped into the fiduciary category easily, but there’s a broader group of fiduciaries that the Courts will impose an accounting obligation on, and that’s what we call the allied professionals.

Suzana Popovic-Montag: And when we talk about allied professionals, we’re speaking about individuals like the accountants who work with us with these financial planning situations, like the tax advisors, the insurance individuals and the financial planners who give advice and work with us and our clients in situations where we’re planning estates for our clients.

Ian Hull: So the question we wanted to raise today is the recent case law development, and talk a little bit about the history that has brought expanded, we think, the concept of the duty to account.  And first of all, let’s spend a minute on what the duty to account is. We’re talking about fiduciary accounting and it is an audit by the Court, much like an audit by CRA, the same kind of extensive review of your conduct. Now the CRA is a little different, obviously, but it is akin to it and it’s a formal audit before the Court.

Suzana Popovic-Montag: And that might be a little bit different than what people would normally be used to providing to their clients when they’re dealing with different industries other than necessarily ours. 

Ian Hull: So, let’s take the example of a dutiful family solicitor. She has looked after the Jones family for 20 years. Now the Jones family has transitioned over those years and the husband has passed away at the ripe old age of 92, and the surviving spouse at 88 is sort of left holding the bag financially. That surviving spouse then turns to her solicitor, her long-time solicitor, one whom she’s trusted for many years, and says to her, will you look after things; I don’t want to worry about paying hydro bills, I don’t want to worry about paying when my kids need money, I want you to deal with it, I want you essentially to be the one who looks after my money, because from an administrative standpoint, it’s too much of a headache. Not that I, I’m capable of doing it mentally, but I’m just administratively, I never did it before, my husband always did it and I’d just like you to look after it. That lawyer, whether he or she is acting under a fiduciary environment, may well be required to pass their accounts in a formal Court audit.

Now let’s take a few minutes and talk about why I have come to that conclusion. The first thing is this, there are sort of three components. One is the recent, relatively recent, but the developments that have arisen out of the statute law; the second is a discussion of the case law developments that I’m talking about; and the third is the reality of the social and legal trends that our society faces when they’re talking about imposing obligations on lawyers and fiduciaries.

Suzana Popovic-Montag: And if we turn to the first one of those, Ian, the statutes, we can start with Section 42 of the Substitute Decisions Act which is here in Ontario and I know the provinces across Canada have similar legislation as do other jurisdictions as well. And what this section specifically provides for is the fact that a Court may order, either an attorney and/or a Power of Attorney or a guardian, to pass their accounts, to prepare accounts either for the entire tenure or for a certain portion of the tenure time during which that individual was acting as a fiduciary. And the language in the statute is very discretionary and broad in that it can provide for the requirement that these accounts be prepared and timing and other limitations can be imposed on a fiduciary for that as well. 

Ian Hull: Okay. There are two other statutory considerations; that’s Section 49(3) of the Estates Act and the Rules of Civil Procedure, both of which tie into our general theme that the Courts have an expansive role, from a statutory standpoint, to impose a duty to account on almost just about everyone before you go into this. 

Now let’s just talk about, go through the case law review. We start with the case of Re Taerk. All of the cases we’re going to refer to will be in the show notes with the sites. But the Re Taerk decision, is a Court of Appeal decision in Ontario of 1975. And that decision starts us off on the basic proposition that as we understood the law and relatively recently understood the law, that a duty to account in a fiduciary accounting environment only arises as a result or consequence of that particular fiduciary, the recipient of this Power of Attorney actually signing a cheque or actually doing active duty, so to speak.

Suzana Popovic-Montag: And then one of the next cases that we sort of tend to turn to is the Re Silver decision which said, you know, yes you do have this duty to account, and the fact that probate hasn’t necessarily been obtained, doesn’t preclude you from being required to do so.

Ian Hull: The next case, the Leung Estate, is really a reiteration of the basic principles of fiduciary accounting and worth mentioning today, just so that we continue to emphasize the importance of what the different kind of accounting that’s going to be required of a fiduciary. 

Suzana Popovic-Montag: And just in terms of a quick recap, the requirements are, of course, that the attorney has to be prepared to prepare the accounts, they have to be kept distinct from their own individual accounts and separate accounts, they’ve got to maintain vouchers, prepare their accounts in actual Court format and disclose all transactions that have happened and particularly, transactions that may eventually somehow amount to perhaps a breach of trust as well.

Ian Hull: So the next case is the Fair and Campbell. And we’re doing this in a chronological order to come to the crescendo of the last two cases that I think really, Suzana and I are of the view that have really expanded this duty to account. Fair and Campbell essentially said that you’ve got to write the cheque before you have the duty to account. You have to actually be an attorney, do something. 

Now, the Fareed decision, it is a decision of the Ontario Court and it talks about the obligation, in this case a solicitor, who acted much like my earlier example, as the family solicitor, touched the financial affairs of the particular individual at a fairly high and intense level, i.e., paying the bills and things like that.  And the Court talks about the obligation on that solicitor that he had a duty to account for all transactions, once he assumes the duties. And this was all transactions, this wasn’t, it was a big departure from the test that you have to cut the cheque to be expected to have to account.

Suzana Popovic-Montag: And then that leads us, of course, to the McAllister decision, which is a recent decision from August of this year, where the Court said that a grantee did not have to keep accounts in this situation because the mom was, in fact, capable. 

Ian Hull: But what the Court said, and again, the Court seems to be flip-flopping on whether you have to sign the cheque or not sign the cheque.  But what the Court said was they will be expansive. In Fareed it was a different fact situation than in McAllister obviously. McAllister was between daughter and mother. But the Court said this, they will expand the obligation to account to a fiduciary, i.e., lawyers, allied professionals, financial advisors, under a two-prong test.

Suzana Popovic-Montag: And the first prong there being that the Court is going to look at the extent of the attorney’s involvement in dealing with the grantor’s money and their finances.

Ian Hull: So that comes back to how active are you paying the hydro bills, are you really involved with the finances, whether you are an attorney, per se or not, but are you actively involved?

Suzana Popovic-Montag: And the second is, has the applicant raised sufficient concern to the Court so that the grantor’s affairs would warrant an accounting? 

Ian Hull: So I call this the “smell test”. Does the conduct of, in that case the mother and daughter, pass the smell test? Is the Court going to look at this situation and say, you know what, this is a little fishy. I do want to have the chance to look at the books at a level that you may be surprised that I’m allowed to ask in that you thought you were acting on the old Re Taerk basis that, hey, if I don’t sign the cheque I don’t have to account.  Well the Court is saying you impose this and they will expand it, looking at this two-prong test.

Suzana Popovic-Montag: And so we do see, Ian, based both on the statute and the case law, the fact that in certain circumstances, the Court will impose these obligations even if we wouldn’t necessarily expect them and that’s by virtue of the broad language and I think, in many cases, the actual facts at issue.

Ian Hull: So we just want to keep our heads up and watch out so we don’t get faced with another possibility of another audit, and almost as painful an audit as a CRA audit would be, and that is an audit in the fiduciary environment.

Suzana Popovic-Montag: Well I think that brings us to the end of this podcast, Ian. I do remind our listeners to feel free to leave us a comment at 206-350-6636. 

Ian Hull: Or e-mail us at hull.lawyers@gmail.com. Thanks for listening.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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

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

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

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

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

Posted on September 23, 2008 by Hull & Hull LLP

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Suzana Popovic-Montag: Thanks, Ian.

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

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

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Or, listen to the audio version of Will Challenge Litigation - Part 5

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 process of will challenges in closer detail. What makes a good case? They talk about the five different grounds upon which a will can be challenged:

1. Lack of testamentary capacity
2. Existence of suspicious circumstances
3. Will not having been properly executed
4. Existence of undue influence
5. Possibility of fraud

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.

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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.

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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.

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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.

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Listen to Estate Planning for the Newly Separated Spouse

This week on Hull on Estates, Ian and Suzana bring us up to date on what has been happening at Hull and Hull over the summer. Jordan Atin appeared on Canada AM to talk about how to avoid The Family War. They have also added two books to their recommended reading list:

Duct Tape Marketing by John Jantsch

Endless Referrals by Bob Burg

Ian and Suzana then discuss issues to consider in estate planning for the newly separated spouse. They talk about the two different types of claims that can be made: Equalization and Claim for support.

A new Hull and Hull breakfast series will take place on Wednesday, October 8, 2008 and participants are encouraged to attend either via webcast or in person. You can also contact Hull and Hull by leaving a message or question with any of the following:

Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

Estate Planning for the Newly Separated Spouse - Hull on Estates Podcast #125

Posted on August 26^th, 2008 by Hull & Hull LLP

Suzana Popovic-Montag:  Hi and welcome to Hull on Estates. You’re listening to Episode #125 of our podcast on Tuesday, August 26^th, 2008.

Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada.  Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and wills. Now, here are today’s hosts.

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

Ian Hull: And I’m Ian Hull. And I want to welcome everyone and remind you to please give us your feedback. Call-in number is 206-350-6636, that’s 206-350-6636.

Suzana Popovic-Montag: Or you can feel free to give us an e-mail at hull.lawyers@gmail.com and of course you can visit our blog, our daily blog, at estatelaw.hullandhull.com.

Ian Hull: Well Suzana, we are going to cover a few topics today on Hull on Estates. One of them is our post-Olympic wrap-up, more or less, our summer wrap-up. We’ve had a busy summer here at Hull & Hull. Been working through some new technology on Hull on Estates and Succession Planning. For those of you who are interested, we’re trying to launch and certainly will have up shortly if its not up by the time this podcast is launched, is our other podcast is going to be on YouTube and we’re trying to do it in the format of video and audio. So we’re having some fun with that and trying that out this summer.

We’ve also had a busy summer, our associate counsel Jordan Atin spent the week on Canada AM in early August, having some interviews and dealing with the age-old question of how to avoid the family war. We had a great summer dealing with some of the media. Actually generally at Hull & Hull, one of the things that we were able to do was have an interesting interview with the magazine called CARP. And that’s the Canadian Association of Retired Persons. We were good enough to be quoted in the August, 2008 edition and it was all about the family feud. We talked a lot about some of the different problems that arise in the context of the family feud and the author really dove into, Jennifer Walker was the author of the article. And she talked about the fact that boomers are set to inherit a trillion dollars over the next years, in the next decade from their parents, and dealt with how to plan your estate the right way to avoid the battle royale. So we’ve been spending a lot of time this summer trying to get out our message of equal isn’t always fair and ways to somehow make your intentions clear.

Suzana Popovic-Montag: We’ve also done a lot of reading as well, Ian, as you know. And we’ve added to our recommended reading heading under our web page some of the great books that we’ve come across over the course of the summer, including Duct Tape Marketing, which talks about the world’s most practical small business marketing guide, by John Jantsch as well as Endless Referrals: Network your everyday contacts into sales, a great book by Bob Burg.

Ian Hull: So you can hit our web page under the links and we continue to update our recommended reading list. We’ve got quite a few books on there now. I know I also finished up Blink this summer, The Power of Thinking Without Thinking, by Malcolm Gladwell. And that was one of those books that I read in the spring and then had to re-read parts of it in the summer when I had some more time because it was a terrific book.

So for today’s podcast, we’re going to talk about sort of in brief, some issues to consider in the context of estate planning for the newly separated spouse. We know that historically here in Ontario, we work with a community of property regime. And that regime is consistent throughout many, many, well all provinces and many, many states in the United States. And it is coming into vogue in many other European countries such as in the UK for sure. So this community of property, basically the concept is that a newly separated spouse is entitled to sit down and do the math and the spouses are supposed to equalize their net worth at the end of the day, based on the increasing value during their relationship. Now that’s the historic sort of framework that here in Ontario we are always working from. But we wanted to talk a little bit today about the nature of the claim, who can make that claim and maybe some protective steps that can come about that.

So Suzana, when we’re dealing with the nature of the claim, there are sort of two types of claims that a newly separated spouse may want to consider. The first is what I’ve talked about, and that is the idea of an equalization.

Suzana Popovic-Montag: And the second, of course, is a claim for support under, here in Ontario, the Succession Law Reform Act. And that claim arises in situations where someone, namely a dependant, someone who fits within the definition of that term dependant, can demonstrate that they have not been adequately provided for by the deceased, either in his or her Will, or by virtue of an intestacy.

Ian Hull: And so if we’ve got these two core claims, the equalization claim itself, of course, is made through what is a relatively cumbersome process of sitting down and creating sort of a list of all of your assets and liabilities, looking at the value of those assets and liabilities as at the date of marriage, and then looking at them as at the date of separation. And when we talk about the newly separated spouse, of course we don’t want to forget that a separated spouse could be permanently separated by death, of course. So that calculation comes into our world fairly regularly. And it’s interesting when you do that calculation, how much of a difference the detail makes. And one of the things that we like to tell our clients is that if you are in a situation, whether you are happily married or you about to be newly separated, there is a lot of good reason to keep careful records of your own personal records, because then you can really sit down if you’re forced to this because of an untimely death on a more positive note, sit down and calculate this, you will have your record. So it’s worth holding on to some bank records and holding on to your personal affairs records as best you can.

Suzana Popovic-Montag: And when you talk about records, Ian, I think you’re referring to lists of, for instance, assets and liabilities, as of the date of marriage, so that when it comes to doing this cumbersome calculation at the end of the day, you’ve got a listing of everything that you own, both personal and real property wise, together with mortgages or a listing of all other liabilities that you’ve incurred prior to marriage.

Ian Hull: So that’s the way you make a claim, and you do it, in our jurisdiction, under the Family Law Act. And making a claim as a dependant is done almost similarly. You bring an application into the Court and you put to the Court your circumstances, your financial circumstances. And you apply to the Court for support.

Suzana Popovic-Montag: And one of the things that we try to keep in mind when we’re dealing with newly separated spouses is that whether or not someone has actually been married does matter for the purposes of an FLA or Family Law Act election, whereas a spouse is defined differently under the Succession Law Reform Act.

Ian Hull: And its defined more broadly, which of course is sensible and picks up on things like same-sex relationships, things like common-law relationships. If it’s a relationship of three years of some permanence, the right to pursue a claim is eliminated if you’re in a common-law situation under the Family Law Act but you’re saved, so to speak, or preserved, under the Succession Law Reform Act. So that’s an important, sort of, stepping stone into the process. 

Now one of the things that people often ask us is how important is a domestic contract in both these claims, in the family law context and in the dependant’s relief context? And we want to sort of carefully look at the contract in each situation. In the family law context, obviously if the claim is, if the contract is created in the right environment, I mean by a properly, independently advised situation with lots of disclosure, these contracts when you go to elect, can be very cumbersome and can be very strong and enforceable.

Suzana Popovic-Montag: And you can sort of contrast that to a dependant’s relief situation when you’re making an application for support where, at least here in Ontario, the existence of a domestic contract is one of the factors that a Court will take into consideration when determining whether or not support ought to be awarded. And so we’ve come to sort of view domestic contracts and support situations as not quite as iron-clad as they are in a Family Law Act situation but certainly of persuasive effect for a judge.

Ian Hull: And the culture really is that the domestic contracts, done properly, are seen by the Courts as sensible contractual relationships within a marriage situation or, of course, in situations when you pass away. Most family law contracts will also include a clause to say that you can’t make a claim against the estate. But the culture in a dependant’s relief case, whether you’re married or not married, is very different because the Act simply says you can apply, you can enforce the contracts or you can ignore the contracts. And its funny, I mean the Act expressly says, Section 62 says the Court should take into account the contracts and Section 63 says you can ignore the contracts, or vice versa, I haven’t got them right in front of me, that’s the theme. So the whole concept is that your entitlement can be limited and the last point is that we want to watch very carefully on any of these types of claims, is that we want to press on with some vim and vigour because you have very strict limitation periods. Under the Family Law Act the claim to make an election under the Family Law Act is 6 months from death.

Suzana Popovic-Montag: And under the Succession Law Reform Act its 6 months from the date that probate has been granted.

Ian Hull: So that’s just a summary review of some of the family law considerations in a newly separated spouse. We want to remind everyone that our next Breakfast presentation will be on Wednesday, October 8^th, 2008, that’s the Hull & Hull Breakfast, which we hold 3 times a year. We do it by way of web cast and we do it by way of personal attendance or phone-in. So please feel free to join us in any one of those forums. And if you have any questions about that, you can hit our web page or, of course, call or send us an e-mail at hull.lawyers@gmail.com.

Suzana Popovic-Montag: Or just pick up the phone or leave us a message on our comment line at 206-350-6636. Thanks very much, Ian.

Ian Hull: Thanks Suzana.

This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances.

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

Our theme music is Upper Structure by DJ AKid  and is courtesy of the Podsafe Music Network.

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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.

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

Comments? Send us an email at hullandhull@gmail.com, call us on the comment line at 206-457-1985, or leave us a comment on the Hull on Estate and Succession Planning blog.

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Listen to Developments in Will Changes.

This week on Hull on Estates, Ian and Suzana discuss developments in will changes. They reference cases from Key Developments in Estates and Trusts Law in Ontario ed. 2008.

Comments? Send us an email at hull.lawyers@gmail.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.

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The Formal Passing of Accounts - Hull on Estate and Succession Planning Podcast #113

Posted on May 20, 2008 by Hull & Hull LLP

Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #113 of our podcast on Tuesday, May 20^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.

Ian Hull:    Hi, Suzana.

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

Ian Hull: I am fantastic. Looking forward to lucky 113 on our podcast efforts.  And we finished off last week reminding our listeners to please feel free to contact us.  And the best way is to jump on our webpage at hullandhull.com and we have an easy navigation to our podcasts and our other sources we have on the webpage.

Suzana Popovic-Montag: And we had a couple of comments this week, Ian. People were looking for the article that we had referred to during our last podcast from The New York Times and I just want to remind people that they can actually find that link on our webpage under the News and Links icon at the very bottom of the page. We have started what we call sort of our recommended reading list, and it’s what I kind of call behind the doors, you know “the Oprah’s Book Club”. So there’s actually a link to the article there and so for anyone who’s interested, please feel free to go there.

Ian Hull: That’s great. And we’re going to try to build that link up a little bit. I had a great meeting the other day with one of Canada’s leading social media new members, and a great guy, Bob Berman, who is a lawyer up in Yorkville who does family law.  But he and I were talking about that and developing our own reading lists on our own webpages and he and I were sharing some books. Right now, I know, I’ve just finished “Blink” and “Tipping Point”, which were both excellent books and we’re going to put those on the link page.  And we’re also, I know, Suzana you and I are just starting through “Ground Swell”, which really now seems to be one of the “must reads” in the social media world in terms of getting a handle on marketing and working through the social media network. So that’s another great book.

Alright, we left off last week talking about accounting issues and I was speaking to a great friend of mine up in northern Ontario the other day, about this very topic.  And she’s a lawyer there and she said to me, “You know, Ian, one of the things that amazes me is that I’ve been doing this practice of law for many, many years, and I have never had to formally pass my accounts”. And we talked about yesterday, the last podcast, how we had talked a little bit about the informal expectations and the way you can resolve the question of your ongoing obligations to account as a trustee informally. We’ll give some more ideas on that as we work through, but the point sort of struck me that here’s a lawyer that’s been practicing for 20 years in a busy estates practice.  And most people just don’t force their hand of going to Court and having what is called essentially a Court audit, where the judge essentially has to go through line by line. Now having said that, in our practice, we see a lot of it, and it’s one of those things that this lawyer pointed out to me was that she wished that she had more or had seen a bit more of it because it is becoming more and more prevalent. One is, is that people are expecting this standard of good record keeping and if you don’t have it, they’re pushing you on to Court. And number 2 is, is that we can’t forget that where there are minor children’s interests or interests beyond the scope of able-bodied adults, we have to pass our accounts in any event. 

So we thought, Suzana and I thought it would be a good exercise to go through some of the details and specifics of what happens when one passes their accounts, when they have to actually draw that short straw and go to Court.

Suzana Popovic-Montag: And as we were discussing during our last podcast too, Ian, and I think that with the increasing size of estates that are out there now and this huge transfer of tremendous wealth, we are dealing with bigger estates and more at-risk, so to speak, when you are the executor of an estate, and different kinds of beneficiaries.  And so it’s not surprising that we will probably see more and more of the formal passing when a trustee ultimately says, “Well what’s the downside, why wouldn’t I get the Court, you know, seal of approval on my administration, why would I forego that opportunity if I don’t have to?”

Ian Hull: Well that’s for sure and so let’s talk a little bit about what the process is. Now, we’re going to talk a bit about some of the Ontario centric steps, but I know certainly across Canada and in most of the jurisdictions in the United States, the process is almost identical, in that you go to Court and you file what is called a Notice of Application to pass your accounts. It’s a formal bound copy of a couple of very important things. One are the accounts themselves that you want the Court to audit; the other is a copy of the Will or the trust that is involved, the kind of core document. And number 3 is you file what you hope to be the final Order, the final result you look to achieve.  So you give everybody sort of the information, you give them the basics of the documents that you need to work from and then you say this is where I want to land, I look forward to your comments, so to speak.

Suzana Popovic-Montag: And as part and parcel of that Notice of Application, it’s going to certainly quantify the period of time during which the accounts are being passed and it’s also going to refer to the compensation, specifically that the trustee is looking for, as well as the legal fees to which he or she is seeking, on basically on an unopposed basis. And then there is, certainly in Ontario, there is provision for the costs and what that amount would be for anyone who has actually reviewed the accounts.  It’s usually either half or three-quarters of the amount that the executor would otherwise be entitled to.

Ian Hull: So we have this application and the form of it is basically we’re going to the Court to say, “We want our accounts passed” and we say it in a more legalistic way, but that’s the long and the short of it. The second part of it, though, is in the Application material, is in the Affidavit of Verification. And this Affidavit, you have to, as the executor, swear to the truth and accuracy of the accounts attached.  So that someone, basically the information you’re putting to the Court, sticks to you from an evidentiary standpoint. The form of that Affidavit is, there’s sort of two approaches: One is a very straightforward, one sentence long that says, “I attach the accounts and I swear them to be true and accurate”; and the other is one where, if you’re looking and you’re seeing a fight on any of the issues, you may want to flush out your position a little bit in some of the facts.

Suzana Popovic-Montag: And that’s, I think, more the unusual circumstance but one that we certainly see and I think it ultimately helps a Court who is dealing with the situation know the facts up front and know what’s sort of coming down the pipes before the parties actually show up in Court to argue those issues.

Ian Hull: So this expanded Affidavit of Verification, the form of the first one is obviously simple enough to do.  Obviously you hope that the accounts are accurate and true, prepared typically by a third party, someone who has a specialty in estate format accounts, but the comprehensive Affidavit in support will typically tell the story. So, for example, say you have an estate that has a large amount of assets in it and you are looking for significant compensation. You may want to, in the Affidavit of Verification, set out some of the detail of your work. Sometimes, for example, the Court likes to see copies of your dockets that you kept track of your efforts over the years in administering the estate, so that they have a sense of the time. They also may want to put a sense of the complexity and the background in it. This is just one example of what you can do to expand your Affidavit to help tell a better story to the Court, and also, quite frankly, to sell it to the other side.

Suzana Popovic-Montag: And that’s particularly so, I think, when you’ve got beneficiaries of an estate who are not familial members. So when you have, you know, third parties who wouldn’t know necessarily the extent of the work that the executor is doing, like a charity for instance, or another beneficiary who is far removed from the process, and it can only help to have all that information put to them sooner rather than later.

Ian Hull:  So if you’ve got your package ready, another thing that you want to keep in mind is, I think, I always tell my clients, is that watch your timing. This process takes a lot of time.  In the grand scheme of things, it may not be a lot of time if you’ve administered an estate for many years, but in Ontario and in most other jurisdictions, there is a substantial amount of time that people have to respond. For example, when you send out your Notice of Application in Ontario, and you serve everyone who has an interest in these accounts, what we call a financial interest, they have at least 45 days to respond.  So you’re looking out, you prepare the materials, take some time, then once you serve it you’re still looking at another 45 days minimum to have the accounts audited by the Court.

Suzana Popovic-Montag: And if the beneficiaries actually reside outside of Ontario, you’re looking at 60 days as the minimum service requirement. And that basically gives the parties hopefully enough time to review the accounts, to seek advice if they need to do so, and at the end of the day, ultimately the expectation or the hope being by the trustee, that they will consent to the accounts.

Ian Hull: So we’ve got it out there, we know it’s going to take some time. In our next podcast, we’re really going to flush out what our, I mean, you can never say typical in our world, but what are traditionally the areas of objection. But the procedural step is once you serve the account on those with a financial interest is you will then…they have an opportunity to file what is called a Notice of Objection, so a complaint, formally with the Court. And this is done either typically not in Affidavit form, but it is filed through the form of the Court and there they set out the nature and extent of the objections. So in our next podcast, I think it would be helpful for us to just take a little bit of time drilling down on some of the, what we call the low-hanging fruit issues, the issues that are often criticized in a passing of accounts so that we can help get better prepared for that inevitable day and hopefully have done our work before, to sell the Volkswagen to the beneficiaries.

Suzana Popovic-Montag: Well, thanks very much, Ian.  I look forward to our next podcast, and I remind our listeners who are interested in providing us with some feedback on this or any other podcast, to feel free to visit our webpage at hullandhull.com and leave us a message.

Ian Hull: Thanks very much, 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.

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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.

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Personal Liability - Hull on Estate and Succession Planning Podcast #104

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

Suzana Popovic-Montag:  Hi and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #104 of our podcast on Tuesday, March 18^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.

Ian Hull: Hi, it’s Ian Hull here solo this week. We – Suzana and I couldn’t get organized to get this podcast as a team, so you’ve got me alone. We’re going to deal with a couple of issues – I’m going to deal with a couple of issues that I think should be interesting. So don’t forget then for Hull on Estates and Succession Planning that you can, of course, call in and we are happy to receive your calls and to do what we can to answer your questions. Our call-in number, 206-350-6636.

Now before I start the podcast, it is in its own way appropriate that I’m doing this solo because Suzana wouldn’t give herself the credit that she deserves. In the last issue of the Canadian Lawyer, that’s the March 2008 issue, we had some really interesting topics dealt with and one of them was a whole section on developments in technology and a lawyer’s role in technologies. Hull and Hull was very honored to be placed on the list of the author Gerry Blackwell’s list of Top 10 blogs, Toronto Estate Law blog, which we do daily during the week. One of the lawyers in the office does it. It is rated as one of the Top 10 law related blogs.  And the author sort of goes in to describe the various blogs and there’s some really interesting blogs that are out there law-related. Michael Geist is one, and that’s MichaelGeist.ca. He’s a University of Ottawa law professor and he has a fascinating blog that I have been following. There’s a great blog that I was privileged to be recently interviewed on their podcast and that is lawiscool.com. And it was launched last year by a group of Canadian law students, and it’s another – the author describes it as an impressive example of the many heads approach that the law blog that we do and that is, is that there are various bloggers. They’re a good group and a really interesting group actually having got to know them.  And as I say, having been interviewed by them. There’s a neat blog out of Kelowna, BC called Rule of Law, and that’s rulelaw.blogspot.com. The sole practitioner, Stan Rule, has been blogging it says in the article since 2005. Considering and covering British Columbia Wills and trusts and estates law and elder law. And I’ve been following this blog for sure over the years and he has several posts, some days are more than one even and I highly recommend the blog.

So carrying on with our news and events summary, also in the March issue of the Canadian Lawyer is a great article on new frontiers where law firms – it talks about law firms starting to explore cutting edge potential of the virtual worlds, talking about social media, web 2.0 technologies. And the interesting part of this article, again it’s in the Canadian Lawyer and it’ll be up on our website, is of course, that we have our one and only Suzana Popovic-Montag heavily quoted throughout the article. And she talks about the shift that’s happening where there are some networking opportunities, of course, that come outside of the typical ones and one of the other individuals who was interviewed talked about it being something outside of the typical golf game, which of course, I try to play badly. But Suzana goes on to talk about the presence that she wanted the firm to have out there.  And as a co-starter and co-founder of all of this technology at our firm here, she’s been spearheading the efforts. Really been a great source of information and enthusiasm and as she says, even in this firm, at the start, there was some resistance from everybody but it started to pick up and it’s picked up throughout the legal profession.

She describes podcasts as internet radio which I like that, that’s a neat way of putting it.  And she really does focus on some of the future steps and one of them that we’ll be announcing in due course is our efforts to get onto Second Life. We had been working over that over the last few months and no doubt, you will hear more about that as we proceed.  So kudos to Suzana, and it’s really a real tribute to her efforts.  Enthusiasm from me in this project is only part of the starting gate and she’s the one who’s held the process together. So it’s nice to see her get some publicity. So that’s the Canadian Lawyer magazine which is published monthly, and a great source which we’ll throw on our webpage.

Now just turning to, because this is a solo effort, I want to keep this reasonably well within our timeline. As Suzana described in her article, she calls our 10-12 minute podcasts treadmill time, so I’m going to keep that in mind. We were talking about and we continue to talk about the role as estate trustee once you are appointed. Our last few podcasts anyway have really been focusing on the pre… before you even get probate, some of the steps you want to take. And I thought I would just step back and take a deep breath and look at the job from the standpoint of a lawyer, because one of the things that I think people forget, is the extensive personal liability that is attracted to being an executor. And I say that because when you start as an executor, and we’ve talked about how we start right from the moment of the time of death, funeral plans and arrangements and right through to administering the assets of the estate, you become personally liable.

And personal liability is an incident of the office of a trustee. So when you’re carrying on the business of a trustee, it is personal liability. And that is created at both levels. One is on the case law level, but the other is on the taxing authority level.  And in Canada and throughout any of the Commonwealth jurisdictions, many hundreds of years of case law, the Courts have said that if you mess up as a trustee, you’re personally liable. There is no protection behind a corporation or anything like that which many people like to use in business. And, for example, in Canada, the CRA, the taxing authority here, has specific provisions in the legislation that allows Revenue Canada to look to a trustee from a personal liability standpoint if there has been some misdeeds. Now what they will typically do and without scaring people, it is as I said in some podcasts before, you can’t go below zero. So your personal liability is something that is, in some respects, protected… well, it’s limited to a certain extent. But as a trustee and in the common law, you are personally liable. So, you know, you want to step back.  You are putting your own personal assets at risk when you take on the job.

And one of the classic scenarios where personal liability comes out and stings a trustee with great surprise and horror, in some cases, is when you have real estate. And recently and certainly most of the…in the U.S. and Canada, the whole growth industry in litigation has been with respect to environmental litigation. So as a trustee, certainly in Ontario, if you take on the duty of a trustee and you are administering contaminated land, it’s something to worry about because again, like the taxing authority and like the case law, you can create personal liability for managing what may have been, say, a polluted site. And ultimately, someone like the Ontario government, could come and say “clean up the site”. And if the value of the property isn’t enough to pay for the clean up, you can create new problems. So you… also create those problems when you enter into third party contracts. For example, say you hired an individual to do the clean up.  You create some, again, personal liability. You’re entering into the contract as an estate trustee, but from a government authority’s standpoint, you can be creating personal liability.

So it just seems to me that one of the things that we like to consider, as we have throughout, is obviously looking at avoiding liability. And to avoid this liability, and in a sense to sort of wrap up my comments here is, is that now that I’ve got you convinced that there is extensive personal liability, my suggestion to my clients is typically to make sure that you have undertaken adequate consideration of the nature and extent of the assets. The standard of care is going to be held against you as very high in your administration of the assets, so I remind my clients that before you jump into the pool, make sure there’s enough water.

So, anyway, I hope that’s been helpful. Again, well done on Suzana’s part in her Canadian Lawyer publicity.  And I remind everyone to feel free to call in at: 206-350-6636. And don’t forget to check out our blog, which is probably easiest to get to when you go to hullandhull.com, you will find the site right on the left-hand corner on our web page and it’ll click you right into our blog. So again, well done Suzana, and thanks 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 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.

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