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.

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.

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.

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.

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. 

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. 

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. 

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.

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.

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.

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. 

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. 

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. 

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.

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.

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. 

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. 

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.

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.

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.

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.

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