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Listen to Administration of the Assets of the Estate

This week on Hull on Estates and Succession Planning, Ian and Suzana discuss things to consider when administrating the assets of an estate and point out burdens of being and executor.

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

Administration of the Assets of the Estate - Hull on Estate and Succession Planning Podcast #107

Posted on April 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 #107 of our podcast on Tuesday, April 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, how are you today?

Ian Hull: Just terrific, thanks.

Suzana Popovic-Montag: That’s good. We just want to take this opportunity before we get into the substance of our podcast to just remind our listeners that if they would like to leave us a comment, they can feel free to give us a call at 206-457-1985.

Ian Hull: And, of course, feel free to chase down our blog or send in a comment to hullandhull@gmail.com and the webpage hullandhull.com gets you a quick link to our blog which we’re posting almost every day on and had some interesting comments last week from our posts, so feel free to engage in the social media adventure.

Suzana Popovic-Montag: That’s great. Now I know, Ian, that you actually were podcasting solo last week because I couldn’t be here to join you and I thought you did a great discussion of your recent attendance at a seminar.  And so I thought what we might do is to, sort of, pick up from where we had left off at the end of our last podcast.

Ian Hull: Well, that sounds great. I do want to say one thing since that podcast was launched into the internet, I’ve had some interesting feedback that seminar was well received. Talked to a couple people that actually were at it and not particular, just what, of course, I said, which was hopefully helpful.  But some of the other speakers and the twists that were being put on the whole elder law scenarios that we’re going to be faced with more and more in society. So speaking of society, we have to refocus a little bit this week and talk about some issues relating to the administration of the assets of the estate and our ongoing slug through the burdens of being an executor.

Suzana Popovic-Montag: And we had at the last time spoken about the fact that we were looking at a situation where we suddenly had the Certificate of Appointment in hands, this probate document, and we were looking at some of the things that we take in terms of initial steps as an executor, once that document was obtained.

Ian Hull: So we’ve talked about this in the past and we’ve talked about personal effects, talked about the fact that we think it’s so important to make sure you document it, maybe take a video quickly of all of the personal effects or have some photos or whatever.  But once you’ve inventoried it, what do we do about getting the action steps to be taken to actually transfer or sell those personal effects?

Suzana Popovic-Montag: Well, Ian, in accordance with the terms of the Will the executor is going to want to deliver the individual personal effects directly to the beneficiaries who are named in there, and then obtain a receipt from those individuals, so as to have the protection of the fact that that gift or that bequest was made and that it was received by the recipient of it.

Ian Hull: And that receipt can’t go understated in the importance of that. We… I just had an estate that I recently administered and I personally made sure that the jewellery items that were delivered and they weren’t phenomenally expensive jewellery items, but they were very personal items and ones that, you know, the sort of chain of the ring from the deceased to you to the beneficiary is so very important.  And a lot of times, I’ll just say to clients, look if you’re the executor, don’t break the chain, so to speak. Once it’s in your hands, make sure that you’ve got full control of it and that you do not release it until you get a proper receipt.

Suzana Popovic-Montag: And then I guess, of course, there’s going to be personal effects that aren’t specifically spoken to and in those circumstances, an executor is going to want to arrange for the sale of those items.

Ian Hull: Absolutely. Now the sale of the items, too, can create its own spicy tension within the administration of an estate. One of the things that I tell my clients is that they want to quickly go on the internet, take a couple of minutes and search out what the sort of the star local sales avenues are. I mean, the classic one is Sotheby’s.  But not all of us have, you know, John Lennon pianos to put up for sale. But, you know, Sotheby’s has an operation in Ontario, Ritchies has an operation, Waddingtons is another one.  All of these houses are wonderful.  They do it so professionally and most of them will do sort of the gambit. If you give them – some of the stuff isn’t worth a lot but some of it is, they’ll often inventory it all for you and give you some help on how to deal with the stuff that is more modestly priced.  And then put in up for sale properly and by a third party, so you can’t get accused of messing up on the sale of selling that painting that sat over Grandma’s dining room table for 30 years, for a song. You’ll get the professional advisor telling you what its worth. They have some…like I know I just dealt with one from Waddington’s.  They have phenomenal internal resources like experts on Canadian art for certain periods that they’ll bring in and they won’t throw these things into the market, sort of, willy nilly.

Suzana Popovic-Montag: That’s great, Ian. And it’s something certainly to keep in mind because there’s always going to be these things that need to be dealt with. Another thing that I try to remind people of is the fact that once you’re in this stage where you’re actually liquidating or transferring assets, you want to consider also cancelling any insurance on those assets that you’ve maintained up until the time that that transfer is actually done.

Ian Hull: Geez, that’s a good point, you know.  I had an estate recently that had a bunch of art and the insurance on the art was almost an overwhelming cost to the estate and the beneficiaries were not happy that it took an extra month to cancel the insurance.  So that’s a really good point.

Suzana Popovic-Montag: And I think it sort of follows from the checklist that we’ve suggested that people maintain because it sort of brings you back to think about that and you can take care of it right at that time.

Ian Hull: Okay, so that deals with personal effects. What about cars and automobiles and that sort of thing?

Suzana Popovic-Montag: I think we’re looking at the same kind of situation there where there’s going to either be a transfer to someone who’s actually named in a Will or there’s going to be the arrangements made by the trustee to actually sell the vehicle.

Ian Hull: And again, I guess, your good advice on the insurances on that one as well.

Suzana Popovic-Montag: And so if we’ve looked at personal effects, we’ve dealt with automobiles, then those are usually the big items there.  Then we just are left with whatever’s ultimately left there and how we actually go about realizing those last things.

Ian Hull: And liquidating deposits and getting the, sort of, estate bank account established as quickly as possible is crucial.  And that, sort of, takes us into what we’ll start to call, I guess, the business side of the estate administration. The one side of many estates that we see the most problems in and that is, dealing with the accounting.

So first of all, setting up the bank account. You need your probate typically, to get a bank account opened. So you’ve got your probate certificate, you go to a bank.  You want, I tell my clients to go to a branch that’s convenient to you because you will be surprised how often you will have to actually deal directly with the bank. This isn’t always like us when people are alive, they can do internet banking, they can do, you know, cross-city branch banking, and so on.  You want to establish, I tell my clients anyway, to set up an account that is easy for you to get to.

Suzana Popovic-Montag: And once you’ve done that, you also want to think about setting up your bookkeeping mechanism because as an executor or a trustee, you’ve got to maintain very good records so that at the end of the day, if you’re called upon it, you can account to the beneficiaries of the estate or the trust.

Ian Hull: And it’s really at this time that I tell my clients to think about the end game now. You’ve been so careful so far, right from the moment of death or the moment you were told you had the job, you’ve been so careful.  This is really the turning point to maintain a level of almost perfection. You have to have receipts for everything, no money can go astray, obviously.  But your system is crucial.  And if you’ve got a situation where it is likely that you’re going to need to ultimately go to Court and pass the accounts, then now is the time to establish that system early, as opposed to remaking it at a later time when you don’t have all of the information at your fingertips.

Suzana Popovic-Montag: And so, Ian, in terms of advice, how do you usually tell your clients that they go about setting up this mechanism?

Ian Hull: Well, I think they’ve got to get good advice and accountants and lawyers know how to create estate format accounts. And it doesn’t hurt to (a) learn a bit about that and (b) set up a system that can be easily transferred into an estate format scenario.  Because the estate format accounting itself is – it can be something that is new to individuals who are not, you know, savvy on this form of accounts. It’s not rocket science, but it is a different form of accounts that you need to consider.

Suzana Popovic-Montag: And my clients are always surprised, Ian, by how different estate accounts are from normal financial statements. And I think that’s part of the education process that we provide to them about how these things are maintained.

Ian Hull: And I think, really, as I say, this is such an important turning point and starting point to the process, that I think it’s worth getting some initial advice on this and it may cost some money, but its all money well spent.

Alright, so now that we’re setting up the bookkeeping, we’re setting up the estate accounts. Let’s talk about, sort of, some of the long-term business aspects of administering this estate.

Suzana Popovic-Montag: In a situation where you’ve got a business that actually had been run by the deceased, in this instance, you’ve got to meet with the estate trustees and create, sort of, a plan going forward of how you’re going to either continue running that business or basically hiring individuals to do that for you as an estate trustee.

Ian Hull: Alright and that, of course, turns us at this point, we’ll wind up because it’s a good turning point in terms of how we will talk about the business side of things and let’s start focusing on some of the investment side that the – what people are going to expect you to be doing with the investments and what you’re expected to do on that front, depending on the estate itself. So I think that’s a good spot to wind up this podcast.

Suzana Popovic-Montag: Okay, and just another reminder to people who’d like to call in and provide us with their comments, to feel free to call us at 206-457-1985.

Ian Hull: And, of course, go to our webpage at hullandhull.com and work your way into it. Feel free to e-mail us at hullandhull@gmail.com and watch our blog. Thanks very much.

Suzana Popovic-Montag: Thanks to you, Ian.

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

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

Our theme music is UpTempo14 by Gary and is courtesy of the Podsafe Music Network.

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Listen to "Family Cottage Cases of Ownership Transfers"
Read the transcribed version of "Family Cottage Cases of Ownership Transfers"

In this week's episode of Hull on Estate and Succession Planning, Ian and Suzana share a few stories involving cases of ownership and the family cottage.

Click "Continue Reading" for the transcribed version of this podcast.

 SFamily Cottage Cases of Ownership Transfers - Hull on Estate and Succession Planning Podcast #75

Posted on August 28^th, 2007 by Hull & Hull LLP

Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You are listening to Episode #75 of our podcast on Tuesday, August 28^th, 2007.

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: So, you know, having some fun with this whole cottage issue and talking a little bit about solutions instead of just about problems.  You know one thing that arose recently on a file that I thought was interesting and something that we’ve talked a little bit about this, but a real life example of what’s happened was we were in a situation where it was a relatively friendly transition of the family cottage. And lo and behold, what happened was, as we were going to deal with it, the actual title documents hadn’t been looked at for a long time. The father had died.  I’m sorry, the mother had died about thirty years ago and the father had lived in the cottage and shared it with his kids and grandkids and enjoyed it. And then the children and the grandkids came up with a solution as to how to deal with the cottage before the father died. And father was happy with the solution. And then they went to deal with it and this was a property that was north of North Bay and it was particularly problematic in terms of the title holding. And it hadn’t been dealt with for thirty years prior and had never been dealt with. So interesting enough, and that’s fine, the lawyers stepped in and they figured out, smart real estate lawyers figured out how to, you know, transfer the one property and part of it had be severed.  And there was a whole bunch of interesting legal issues. But what happened was, in the interim, when the kids, they had gelled with the solution, and then the delay which was partially the process in the system, in between the delay which took about eighteen months to clear up some of the title problems, two new kids were born into the loop.  And one of the kids had gone offside on the deal.  

So we had to go back and rework the deal, revisit almost all of the issues that we thought we’d resolved. And then ultimately, we came up with a solution.  But, I just thought it was an interesting point to make in the sense that when you go into these things, often people roll their eyes when the lawyers say, well let me see what’s involved, per se.  Do you own all of the property you’re owning?  Or who owns it and does your great-grandfather still have some estate that we have to deal with to transfer it in? Because when you go to move on these things, it’s like anything in a business deal or on any transactions. They, no matter what, life is transaction based.  And when you’ve got a deal, you wanna crystallize the deal, move forward. And then when you hit a stumbling block like this and you can’t give people the tangible result that they thought they had achieved, things loosen up. 

And in this case, things loosened up to the point where it wasn’t destructive, but it was harmful.  Because again, some of the hard feelings and things were raised again. We were just reinventing the wheel in some level. So I’ve, you know, I wasn’t involved in the early part but we learned a good lesson that it’s really important to get a handle on the true ownership interests of, in this example, the cottage property, what properties exist where, what slices of land are appropriately to go where and who owns them and what’s the history behind them. And you can do that by working concurrent with the plan.  When we get the family together and we want to work through the transition, we often will say, well let’s start from ground zero here, make sure we’re at the right spot, the starting spot, leave that to the lawyers and we’ll deal with that concurrent with our efforts to work with you in terms of the solution. 

Suzana Popovic-Montag: Ian, that’s a great story and it sort of brings to mind a story that I’ve encountered as well in the past where the ownership is not by the individuals but by corporations and private corporations owned by the individuals. And, you know, we know with family companies, people sometimes get lazy with the formalities that are required in these kinds of situations.  So directors, you know, they’re not always in place, the by-laws are not always up-to-date and the resolutions aren’t necessarily in place. So that, at the end of the day, when some form of transfer of ownership has to take place, it really can become a nightmare procedurally and at law, where by, you know, like you say, the possibility of actually losing an otherwise simple, deal can really become a reality.

Ian Hull: And one interesting thing on this, just to follow up on that too was, in the situation that I was involved with, was one of the brothers actually owned a sliver of the land and that brother had died without kids. So it added a whole twist on it and it was, everyone knew he was dead and everybody knew he had no kids.  But what we had, it added a whole twist in terms of regularizing things.  And again, it just comes back to doing your homework, if you’re gonna start the process, start early. And one of the things that I often will say to my clients, if they’re in the business of wanting to transfer, whatever it is, say it’s the cottage, the family business or whatever, start the succession plan the day you buy the business or the day you start the business or the day you buy the cottage. And start thinking through that, if that’s the goal, one of your goals, even if it’s a modest property, you never know.  I mean, people who bought cottages in Ontario and Northern Ontario in the early ‘60s and late ‘60s, early ‘70s, had no idea what these cottages would be worth today. And so you want to factor in that possibility of a transition.  Because if you buy the cottage now and you set it up in some elaborate trust arrangement for tax driven reasons, that may not be what you want to do ultimately in the sense that maybe you’ll save some tax, but you may not achieve your goal of succession. 

So talking about succession with family cottages, let’s talk a little bit about some of the basic ideas of just what we can do, transferring the cottage on your death and what steps can be taken.

Suzana Popovic-Montag: Well Ian, during our last podcast, we talked about, you know, those situations and what you would do in the situations where you were really concerned about the tax consequences of the transfer. But if the tax issues aren’t necessarily a concern for you or you’ve somehow already covered the tax liability through perhaps life insurance or some other arrangement, then you’ll likely choose to transfer your cottage or your vacation property on your death.

Ian Hull: Yeah, and that’s the likely scenario.  I mean, you know, the elaborate schemes of doing things during lifetime and things like that that we talked about before are useful and they’re worth considering. And even some of the creative schemes of passing on partial ownership and so on. But what 90% of estate planning is death-based in the sense that it’s triggered on the death. And so let’s start to flesh out some of what are the more conventional ways because there are so many ways that transfer options are available. Each with different potential benefits and really depending on your family’s current situation and future situation and prospects.  So let’s start with, let’s just talk through some of these options that are available upon death.

Suzana Popovic-Montag: Well, one of the ones that easiest comes to mind, Ian, and one that probably most people are familiar with is the concept of joint tenancy. And what joint tenancy means is that you can decide to hold your property jointly with someone else, for instance, your children or your grandchildren or some other family members who then are the joint beneficiaries of that property. And so then on your death, there’s an automatic transfer of that property to the surviving joint tenant or tenants.

Ian Hull: Now once that’s property transferred though, it passes directly to the other joint tenant on your death.  And, of course, there’s this benefit in Canada of the no capital gains are triggered necessarily depending if it goes to, for example, a spouse. If you have a joint tenancy with your cottage and it transfers to your spouse, then there’s a rollover on the tax payable. If it goes to a joint tenancy with a child, then there is no rollover available and you will crystallize part of that gain at that time. But another nice benefit is the fact that you’ll avoid probate fees likely when you pass through this joint tenancy process. 

Suzana Popovic-Montag: Now if we put on our litigators’ hat, though, Ian we certainly know that this option which is very frequently used, can however have some very complicated results or exceptions to it that often do lead to disputes.

Ian Hull: And we’ve certainly, on previous podcasts, talked about how the Supreme Court of Canada talked about joint accounts.  Well, in some ways, this is a similar scenario. And that is, what comes right down to it when you get into these disputes, is the court wants to know who really owns the asset.

Suzana Popovic-Montag: And that fundamentally is based upon what was intended at the time that the property was transferred.

Ian Hull:   And another, I guess, not to be naysayers, but another downside of joint tenancy arrangement is that if any of the joint tenants pre-decease you, their interest automatically, of course, passes to the other joint tenants. Which means that their children or other beneficiaries may not receive any of their interest in the vacation property.  And the classic illustration is if you have three children and you put your cottage in the name of yourself and the three children and your spouse having died, say a couple of years earlier. Three healthy adults and yourself.  they’ve got their own kids, you think this is gonna be a perfect estate plan. Well, if that person then tragically dies before you and you’re looking at a situation where a whole string of their children may not take the cottage.  And then you sit, you know, when you talk about these things, you say, oh gosh, nobody would do that to the grandchildren and to the nieces and nephews. But if it’s been a long period of time and certainly, in my experience, is, is that not that they’re estranged, but they’re distant typically. And so, you know what, the linkage to them and the importance of preserving their Mom or Dad’s, you know, inheritance that way on a gratuitous basis without being properly setup legally, it wanes.

Suzana Popovic-Montag: That’s for sure, Ian and we certainly can attest to that. You can also choose to give away your vacation property or your cottage property in your Will by either an outright gift or even a trust.

Ian Hull: And in most cases, the beneficiary of the property will have to wait until the Will is probated and you pay probate tax and capital gains tax on the receipt of that gift.

Ian Hull: But there’s exceptions to all of these taxes and you really need to sit down with a lawyer and determine if gifting by Will is the right answer. Alright, well, why don’t we, we’ve got some other suggestions to talk about and we’ll save them for our next podcast, that start to sort of flush out these options of transferring the cottage property on death.

Suzana Popovic-Montag: That’s great, thanks Ian.

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

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

Our theme music is UpTempo14 by Gary and is courtesy of the Podsafe Music Network.