The Surviving Spouse – Hull on Estate and Succession Planning #96
Listen to The Surviving Spouse
This week on Hull on Estate and Succession Planning, Ian talks about an interview he did this week for a new website called Law is Cool and why he podcasts.
Ian and Suzana discuss the importance of preparing for the death of a spouse or for the welfare of your spouse upon your death. This preparation includes having a good idea of the assets you share and the importance of appointing a guardian for your children.
The Surviving Spouse – Hull on Estate and Succession Planning Podcast #96
Suzana Popovic-Montag: Hi, and welcome to Hull on Estate and Succession Planning. You’re listening to Episode #96 of our podcast on Tuesday, January 22nd, 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?
Ian Hull: I’m just great, thanks.
Suzana Popovic-Montag: That’s good.
Ian Hull: We’re moving along into ’08. I was listening to our last week’s podcast last night actually while I was walking my favorite animal in the world, Lola, our new dog. And I noticed that your voice isn’t as loud as mine in some of these, so you have to speak up. I should have told you this off-air, but I was just thinking of it now.
Suzana Popovic-Montag: Nothing like improvising, Ian. Thanks very much.
Ian Hull: So get closer to the microphone. Okay. So, you know, it’s been a fun week this week. I just got interviewed actually and it won’t be launched, I’m told, it’s a podcast and website called lawiscool.com. And I just got interviewed by these guys about an hour ago and it won’t be up into the podcasting world for some months, they tell me, because they are all volunteers and trying to pass their courses at the same time. But it was interesting because the first question that came to mind as we were off-air and talking about it was, you know, why the heck are we doing this, and what are we doing podcasting as a firm. And I told them a story the other day, it happened to me, was I was on a file and we were in a meeting with my client and across the room was the other client with their lawyer. And the client on the other side looks across the table and says, “I’ve listened to your podcasts, you know that, Ian?” I had a good laugh because I thought, that really is what we’ve been trying to do and that is, educate ourselves, educate others and have some fun along the way. And we certainly are not discriminating in terms of who we want to educate, whether it’s on the side of good or evil.
Suzana Popovic-Montag: Great story, Ian.
Ian Hull: Not that they’re on the side of evil, but the right or wrong. So anyway, listening to last night again, we really, I think, touched on a topic that was near and dear to many people’s hearts and that is, how you deal with funeral arrangements and things like that, some of this pre-probate issues. So I thought another one that can be particularly volatile and one that is worth talking about, what to consider, and that is, and we’ve touched on this briefly, but let’s really drill down on it, and that is, what about the surviving spouse? Now the scenario is whether you’re a surviving spouse or you’re the executor and you’re going to have to deal with the surviving spouse, what sort of pre-probate unique characteristics does that bring into the element? Obviously the first thing that comes to mind is the emotions. You’re a surviving spouse; you have lost your partner. It is, you know, difficult to organize a funeral at the best of times. Well, it’s also difficult to react to that horrible loss. So we thought we might talk a little bit about some of the things that, as a surviving spouse, you’ll want to keep your eye on the ball on before you get into the fancy seal stage in life in terms of the administration of the Will.
Suzana Popovic-Montag: And I think part and parcel of that is for you, as a surviving spouse, in that kind of situation, is you want to be able to, sort of, step back, notwithstanding the very emotionally charged atmosphere that you find yourself in and determine what kind of financial requirements you’re going to require going forward, see what it is that the will actually provides for you, and have the opportunity to speak with a lawyer to see what your options are in the circumstances.
Ian Hull: So one of the things that we tell a lot of our clients, and most of them don’t listen to us on, but this really comes back home to roost, is keep some meaningful summary, list, control, leads on your financial assets, so that your surviving spouse can determine really what he or she is going to need. You know, within a very short period of time, your surviving spouse is going to need to know what they’re going to be able to live on, what’s left, whether they’ve got to work more, work less, how they’re going to deal with it. And if you haven’t organized a financial advisor or you don’t know where the life insurance policies are kept, or all of that sort of simple stuff, it’s going to make it that much harder for your surviving spouse in a non-contentious situation to get up on his or her feet.
One of the classic questions that a surviving spouse has to ask is whether or not they got enough under the Will. And that comes back to my earlier comment and that is, make sure that you make it as easy as possible for your surviving spouse to find where the assets are and determine what assets are there. But at the same time, you also want to acknowledge the fact that once you figure out that there is $100.00 there or there is $200,000,000.00 there, your surviving spouse has some core legal rights that they’re going to want to consider quickly. And you can’t fix that. That’s just the way it works. It’s a community of property division, essentially an equal division on death, if you haven’t provided properly under the Will. So you’ve got to accept that and so it comes back to the same thing; get the documents organized to make it easier for a surviving spouse to make an educated decision as to whether or not what he or she wants to do after death.
Suzana Popovic-Montag: And what you’re referring to there, Ian, is an equalization under the Family Law Act. In Ontario, and I think a lot of jurisdictions have similar legislation, that provides for a division of assets on death, in the event that the surviving spouse chooses not to take his or her entitlement under the Will. And one of the key things with these elections and particularly under our Family Law Act is the fact that it is very time sensitive and that a surviving spouse has only 6 months within which time to decide whether or not to take the entitlement under the Will, which means you have to determine what that actually amounts to, or if you’re going to take your election under the Family Law Act.
Ian Hull: So that time sensitivity can get extended by lawyers getting involved and getting judges saying, “Okay, you can have some more time”. But it’s there for a reason, and that is, is that people have to get on with their lives and they have to deal with the administration relatively quickly. So we don’t want to forget, again, it really does pay to be organized and to make things easy for your spouse.
Suzana Popovic-Montag: And another thing that I often will raise with people is the fact that spouse does not include a common-law or a same sex partner, and so that when it comes to these kinds of particular entitlements under the legislation, you want to make sure that you fit the proper definition of that, so that you can be entitled to it.
Ian Hull: And we, as lawyers, are always careful to make sure that strict deadlines aren’t missed, so we make a note of our 6 month election and I tell my clients to do the same, so that they are mindful of the fact that they’ve got to make some decisions fairly quickly and therefore it keeps the heat on them to track down assets and get organized.
Suzana Popovic-Montag: And another thing that arises in these kinds of situations is that if a spouse actually does elect under our Family Law Act, then he or she can’t act as the estate trustee, even if they’re named as such in the Will.
Ian Hull: One other claim that we’ve talked about before and we won’t go into great detail because we’ve spent a fair amount of time in recent podcasts on, though, is the fact that if there isn’t enough under the Will, you can elect under the Family Law Act as we talked about and we can equalize. There’s another issue is that even if you got under the Will a certain amount of money and you needed more, you can make a claim as a dependant under most of the common law jurisdictions, where essentially you go to the Court and say, “Yeah, that’s fine, I’ll take my $50,000 a year out of the trust, but that’s not enough, I need a little more”, and the way I can claim that is through the dependant relief provisions of the Succession Law Reform Act.
Suzana Popovic-Montag: And that’s also a time sensitive election, Ian, because that application, if you’re going to bring it, has to be filed within 6 months from the time you do get the certificate of appointment or that probate. So another thing basically for us as lawyers and for clients to diarize and to sort of follow up on.
Ian Hull: So the final sort of surviving spouse issue I would want to talk about is that of the question of custody of child, children, and guardianship of property for the children. And before we get into that, I need to go on my typical rant with clients that I do and that is; just stepping back when you’re drawing a Will, the decision as to who your guardian is going to be can be the roadblock to doing a Will. And there’s nothing more silly than to let that be your roadblock because you need a Will far more important than you need to pick who is going to be your guardian of your children. I know it’s an emotional issue and young parents can never understand this, so they put off doing their Will. And they just create more problems than it’s worth, because now, when someone’s died and say you’ve died with young children, the way it works is that at law, it really shows you it isn’t that important of a decision to make
Suzana Popovic-Montag: And you say that, I guess Ian, because you’re referring to the fact that when there is an appointment in a Will of someone to have custody of a child, that appointment is going to expire within 90 days from the date of death. And so, at that point, someone else or perhaps even that same person will actually have to bring an application to have permanent custody or guardianship determined.
Ian Hull: That’s right. And so you’ve fretted about this and you find out that it really is only a 90 day appointment and it’s subject to a further Court order. So you’ve fretted about not doing a Will and you’ve created more of a mess then by not doing a Will because of that. And in Ontario anyway, but most common law jurisdictions, talk about the fact that you need a guardianship of property for the child and that exists where you are trying to pass on assets. For example, in Ontario, for more than $10,000 to a child, you have to actually get a special guardianship order to administer that money that’s above and beyond $10,000.
So we get into those kinds of issues, and as I say, they can create log jams unnecessarily in almost every respect. So before we sign off, I was struck by a recent story that I saw and in terms of some frailties of the legal system and some of the craziness of it. Some years ago…this is a true story…to help fight crime, the founders and the mayors and the city council in Tacoma, Washington, a place that’s near and dear to me because my sister actually lives right near there, came up with a unique way of thwarting criminals. And this is a true story in Tacoma, Washington, if you can believe it. They passed an ordinance; the City passed an ordinance which, in part, reads as follows: “It is mandatory for a motorist with criminal intentions to stop at the city limits and telephone the Chief of Police as he is entering town”. Now I made an inquiry with the city hall of the Town of Tacoma, Washington and asked about this ordinance. And indeed it does exist. And they admitted on the phone that there is no record of anyone making such a phone call. So you can see how crazy law can be. And I thought that was a funny story that I ran into.
So we’ll work through this and continue to work through these administration issues in our next podcast. Thanks very much, Suzanna.
Suzana Popovic-Montag: Thanks to you, Ian.
Ian Hull: Bye.
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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