This week on Hull on Estate and Succession Planning, Ian and Suzana continue their discussion on what to expect in the early stages of estate administration.

Estate Administration - Hull on Estate and Succession Planning Podcast #94

Posted on January 8^th, 2008 by Hull & Hull LLP

Suzana Popovic-Montag:  Hi, and welcome to Hull on Estate and Succession Planning.  You’re listening to Episode #94 of our podcast on Tuesday, January 8^th, 2008.

Welcome to Hull on Estate and Succession Planning, a series of podcasts hosted by

Ian Hull and Suzana Popovic-Montag, that will provide information and insights into estate planning in Canada, from the offices of Hull Estate Mediation in Toronto, Ontario, Canada.  Here are Ian and Suzana.

Ian Hull:  Hi Suzana.

Suzana Popovic-Montag:  Hi there Ian.

Ian Hull:  How are you doing?

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

Ian Hull:  I’m good.  The holidays seem like a long time ago now.

Suzana Popovic-Montag:  Way too long.

Ian Hull:  They were way too short and it feels like they didn’t even happen.  But that’s okay.  We’re into a new year and having a great time moving through what is our mini series on what to expect, bringing some life to an estate administration.  So our last podcast we had some fun talking about this pre-probate stage.  And I think it’s worthwhile.  You were saying before as we were preparing for our podcast it would be worthwhile staying in this pre-probate stage because there are so many other issues that we could talk about before we get the fancy seal on the Court file.  And a lot of these issues are issues that can be dealt with on a homework basis, as you’ve described them and so have I.  So let’s talk about again where sort of we left off in our last podcast talking about what you called were testate estates or situations where there is a Will itself.  So let’s stay in that pre-probate framework and talk about that.

Suzana Popovic-Montag:  You know, one thing I wanted to mention, Ian, in terms of that is normally we have a situation where there’s a formal Will, a Will that’s been prepared by a lawyer . But that doesn’t mean that a hand-written Will prepared by the deceased and signed by him or her is not as equally a valid document.  And I know you talked about witness requirements and things like that during our last podcast.  But there are different requirements and rules that govern hand-written Wills, but they are equally effective at law.

Ian Hull:  Good point.  And we haven’t talked about that at all.  We’re sort of focusing on the conventional scenario but we can’t forget that less conventional scenario.  So why don’t we talk a bit about situations where you’re applying with a Will.  And you’ve got a fairly conventional scenario, or unconventional scenario - typewritten or hand-written.  One of the questions you’re going to be asked, and a bit of homework you can do, is get the details of who are all the estate trustees named in the Will that you have or you know about.  Are they alive?  Are they able?  Are they willing and competent to act?  Those kinds of details of where their addresses are, contact numbers and so forth.  This is just a good little homework exercise to follow through.

Suzana Popovic-Montag:  And another thing that you might want to consider is whether or not, and we’ve talked about these on previous podcasts, whether spouses are making elections under the Family Law Act for instance.  And if that’s the case, then there is case law that suggests that the Will is to be read as though that person has predeceased the deceased.  And so they won’t be entitled to be the executor of the estate and they won’t necessarily be entitled to gifts in the Will, as a general rule.

Ian Hull:  And you have, as usual, understated the importance of the case law because you did the Factum on the leading case on that issue.  And Reid vs Reid-Martin stands for that proposition that yes indeed, the surviving spouse has some problems acting as the estate trustee.

In terms of, you know, I guess another little detail point is you will need legal names of the estate trustees, addresses, occupations - you always have to note that in the probate application.  Other little details - you’ll want to get SIN numbers and dates of birth because sometimes they’re going to need that to open estate bank accounts.

Suzana Popovic-Montag:  I think you’ll also want to consider whether or not this is a situation where some of the named estate trustees may want to renounce.  And that’s the situation where someone decides I may be named, but I don’t necessarily want the job.  And in that case, they have to sign a formal document actually renouncing the appointment so that the other named estate trustees would have the authority to then continue with the administration.

Ian Hull:  Now that’s a very good point.  Alright, we’ve talked about situations where there is a Will.  Let’s turn now to situations where there is no Will, where we’ve got intestate estates, where you have to turn to the legislation in the different commonwealth jurisdictions that deal with situations where essentially the government tells you how the estate is going to be distributed.

Suzana Popovic-Montag:  And generally speaking, in those situations I think it’s usually the situation where you’re going to have that estate pass on to the next-of-kin, however that next-of-kin is actually defined.  And so the closest living relatives will be the ones who are, at first blush, going to be entitled to the estate.

Ian Hull:  So this is where I say you can do some of the most effective homework because this isn’t time you want to waste a lot with a professional across the table at hourly rates.  This is complex stuff that a professional is going to want to know almost to a level of detail that may seem almost irritating to the client.  And the reason why is, is that you used that term “next-of-kin”.  The term “next-of-kin” is a broadly defined term and one that…I mean, you’ve defined it perfectly…but one that has to be determined with great precision.  You have to make sure you don’t miss one possible next-of-kin or class of next-of-kin.  So to do that, you’re going to need some major information.

Suzana Popovic-Montag:  And you start, of course, with full legal names of all the family members that you know of, their addresses, their actual relationship to the deceased and their respective dates of birth.

Ian Hull:  And I will often just say to the client before they come to see me, listen, put together as best you can a family tree.  Show me where and when people were around and what sort of lineage, how it works.  So that you can start to get a bit of a visual as to what is going on, because the lawyer is going to be the one to fill in the blanks per se.  Now just because this is a bit of a complex area, at this point, let’s just talk a little bit about what happens when it’s not a straightforward situation.  Where the next-of-kin are a bit more distant.  Well, for example, you have situation where an elderly couple is married for 50 years, they have no children.  They have brothers and sisters but they never had kids.  And the brothers and sisters have kids.  So you’ve got different generations sort of swirling around.  And depending on who died first, and so on, who are the next-of-kin and so on.  What we’ll often do in situations were there is some uncertainty is we’ll hire a good trace or heir searcher to help us fill in the blanks.  And these people are fascinating.  Some of them they will go to cemeteries to chase down information, look at headstones, back it up and so forth.  And I guess what some…and some people might have heard of…are heir searchers who are not quite so clean in that sense that they usually will want a big piece of the action once they find these heirs, from the estate.  And what will happen is, is that for example if there is someone in England who is a beneficiary, a long lost beneficiary.  And so some of these heir search firms will take a fee, a fixed fee, a reasonable contingency fee or not so reasonable contingency fee.  We’ve seen some tremendous fees that come out, you know, which are just outrageous at some level.  But there are some really terrific heir searchers.  They’re needed.  They have a skill search that is unbelievable…what they can.

Suzana Popovic-Montag: It really is, Ian.  It really…I’m always astounded by the fact that they’ve got resources at their hands that we wouldn’t even necessarily expect.  And notwithstanding the fact that sometimes they can be very expensive, the truth is that estate trustees have a duty in these circumstances to locate family members, to locate the people who are entitled to the estate, to distribution of the estate.  And you don’t want a situation where you’ve possibly paid out the estate to the wrong family members.  And so it’s sort of a cost of doing business.  I know it sounds kind of crude but it is the term that we use when we say to the clients who are trying to administer these estates that it’s really, really important that this job be done properly.

Ian Hull:  And now, chasing down blood relatives is an expertise that these guys have.  The other expertise that we have, as lay people, that we need to employ in all this, is that you need to ascertain the nature of the relationships that the deceased entered into during his or her lifetime.  Not just the typical “I got a brother or a sister” or something like that, or a second cousin.  You want to make sure that we’ve nailed down all the relationships.  Say, twenty years ago, they had a relationship that you know about.  Maybe there were children out of that relationship you need to investigate.  There may be expanded relationships and situations where you have common-law spouses, where you have same sex spouses.  All of these matter for the different types of claims that can be made against the assets of the estate.  They may not be what we called “heirs at law” but they may be obvious claimants.  So it’s worth making the extra effort at the outset and ultimately if you don’t have the resources or the information, you can get your professionals to help you seek out these people and so forth.  But that is an important early step.

We don’t want to forget that, certainly in Canada, the nature of the relationship is crucial if you are a married spouse or you are not a married spouse as well.  Because you have special entitlements as a married spouse and you have other special entitlements if you’re a common-law spouse.  Different types of claims.  There are what we call the preferential share you would get if you were in a married spousal situation.  For the common-law, it’s different and the type of claim there is differently structured.  It’s structured by a dependants’ relief claim or something of that nature as opposed to what the statutes allow for as a preferential share in the claim.  So anyway, we don’t want to get in too deep on the claims side.  But it just shows you, it illustrates why this is important to chase down this information.  And we’re not suggesting this because we want to add work to the process or add layers of complexity.  We’re suggesting it because we want to solve problems at the outset.

Suzana Popovic-Montag:  And just to sort of tie this podcast up, Ian, I think another thing we want to keep in mind is the fact that we also have to determine whether or not there are any children born outside of the marriage.  And that matters for the same kinds of reasons in terms of the distributive share that people will be entitled to on an intestacy.

Ian Hull:  Absolutely.  I forgot about that.  So that’s very helpful.  Alright, so I think that’s a good start.  We will continue to work through this pre-probate stage and the homework and the preparation for our ultimate goal, and that is, to administer the perfect estate.  So we’re looking forward to many more talks and discussions about this in the year of ’08.  And the neat thing about ’08 is, we hope to hit 100 podcasts in ’08.  So that’s going to be an exciting day, probably not as exciting for everyone else, but you and I.  It will be a neat day to hit.  I don’t know how much celebration there will be involved.  It certainly won’t be champagne because we typically podcast early in the morning.  So we’ll try not to drink before noon in ’08.  That’s my new rule.

Suzana Popovic-Montag:  Well, thanks very much Ian.  And I do look forward to our next podcast.

Ian Hull:  Thanks a lot.  We’ll see you.

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

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This week on Hull on Estate and Succession Planning, Ian and Suzana  talk about the first, pre-probate stages of administering an estate.