READ OUR TRANSCRIBED PODCAST HERE
During Hull on Estate and Succession Planning Podcast #13, we discussed Estate freezes.
In our May 15, 2006 blog we mentioned the book Naked Conversations by Robert Scoble and Shel Israel. In our view, it is truly one of the very best books on the topic of blogging.
Without a doubt, an important starting point for the whole blogging process is to understand its underlying concepts. Blogging begins with the old-fashioned media known as the printed word. In Naked Conversations, the authors state that the book is all about how and why you should join the conversation of blogging; in addition, the book also tells you how to "blog smart" in order to succeed.
In describing the blogging phenomenon (at page 5), the authors talk about the fact that it is aptly described by the Author-philosopher Arthur Schopenhauer, who once observed that, "All truth passes through three stages: First, it is ridiculed; second, it is violently opposed; third, it is accepted as being self-evident."
The authors believe that, at this point, blogging has passed the denial and most of the anger phase.
Perhaps one of the most telling quotes referred to in the book is at page 7, where the authors’ cite G.W.F. Hegel and remind us, as Hegel did, that "Nothing great has been and nothing great can be accomplished without passion."
In the first Chapter of the book, the authors point out that perhaps the most telling acceptance of blogging in the corporate world arises out of the fact that Microsoft has embraced the technology. It is clear that the culture of blogging is huge in Microsoft generally and, as a result, a growing level of transparency has been created through the blogging process. The number of visitors that were attracted to the various Microsoft blog pages as of the founding publication of Naked Conversations in 2006 was somewhere between 10 and 10,000 per day.
We plan to continue a further comment on this great book in future blogs. As for other books about podcasting, we suggest you also consider:
- Podcasting for Dummies: A Reference for the Rest of Us, Tee Morris, Evo Terra, Dawn Miceli, Drew Domkus (For Dummies, 2005)
- Podcasting Hacks: Tips & Tools for Blogging Out Loud, Jack D. Herrington (O’Reilly, 2005)
- Podcasting Solutions: The Complete Guide to Podcasting, Michael W. Goeghegan and Dan Klass (Apress, 2005)
- Podcasting: The Do-It-Yourself Guide, Todd Cochrane (Wiley, 2005)
- Secrets of Podcasting: Audio Blogging for the Masses, Bart G. Farknas (Peachpit Press, 2005)
All the best, Suzana and Ian.
In general terms, the form of the accounts should provide all essential information to all persons interested or entitled to an accounting in the Estate or Trust. Generally speaking, the accounts should be prepared in a manner that is capable of being understood by a person of average intelligence, literate in English, and familiar with basic financial terms, who has read it with care and attention. Accordingly, Executors and Trustees preparing their accounts should be careful to avoid technical terms such as "debit" and "credit", which are generally not known to persons who are not familiar with bookkeeping and accounting practices.
One of the main problems encountered by Executors and Trustees in answering requests for information or providing explanations to beneficiaries is that the beneficiaries frequently do not read the accounts with the required care and attention which is essential if the accounts are to be understood.
On the cover of the accounts, a short statement of the purpose of the accounting, such as "The Trustees present these accounts for the approval of the Judge and to acquaint interested parties with the administration of the Estate and its proposed distribution", might well be added.
In Ontario, Rule 74.17 of the Rules of Civil Procedure sets out the specific expectations of this relatively precise art of accounting. It can be seen, therefore, that any accounting by Executors and Trustees has both a broad and a narrow aspect to it.
In the broad sense, it is an obligation whereby the Executor or the Trustee furnishes information to interested parties on an ongoing basis concerning the administration of the Estate or Trust.
In the narrow sense, the Trustee’s accounting relates to the accounts prepared by him or her at the close of his or her administration (or some appropriate intermediate stage) so as to reflect the transactions that have occurred, with a view to discharging the trustee from liability for his or her stewardship.
Usually, a Trustee informs the beneficiaries of the results of his or her administration on an interim basis. This statement usually sets out the income or revenue received, the expenses incurred and the net result of investments, together with a list of assets.
Interim reporting statements vary widely in the manner of their presentation and the detail of the information they contain. To a greater or lesser degree they are designed to demonstrate the performance of the trust and frequently resemble the form of corporate financial statements.
Some of the duties and obligations of an Executor or Trustee in relation to accounting to beneficiaries are as follows:
- 1. To keep proper accounts of the trust or estate, which should be clear and accurate and rendered at appropriate intervals to the beneficiaries;
- 2. The accounts must be kept distinct from other accounts;
- 3. Receipts or cancelled cheques and vouchers must be preserved to support entries on both the credit and debit side of the account;
- 4. To produce to any beneficiary the accounts when reasonably requested. In the case of income or revenue beneficiaries, accounts must be rendered at reasonable intervals without being requested by the beneficiaries entitled to such income or revenue. In the case of residuary beneficiaries, accounts should be presented when the interest falls into possession. These beneficiaries are entitled to inspect and investigate the accounts, vouchers and other documents of the trust or estate, including the will or trust deed. They are also entitled to such full and accurate information regarding the state of the trust property and the administration generally as is or ought to be within the knowledge of the Trustee. Thus, the accounts must be kept in such a manner that they will clearly show how all the monies or assets received have been disbursed or otherwise disposed of, and the ultimate distribution among the beneficiaries of the available Estate.
- It goes without saying, of course, that beneficiaries who are given general or specific bequests or devises and who have received these bequests in full are not entitled to any further accounting. If, for any reason, the Trustee cannot keep the accounts herself, she is under a duty to employ a competent person to do so, and these costs will generally be chargeable out of her compensation, as it is her duty to keep the accounts.
- 5. To make all beneficiaries fully acquainted with their rights;
- 6. To disclose any and all breaches of trust;
- 7. To allow all beneficiaries sufficient time to investigate the accounts;
- 8. To ensure that all beneficiaries have competent and independent advice in their investigation of the accounts; and
- 9. To notify all beneficiaries interested of any Court audit.
Our social media leads for today’s blog are, as usual, just suggestions:
Open-Source Podcast Players: amarok
Search Engines and Directories for Podcasts:
podcast 411 (reflects numerous directories)
vodstock (listing video podcasts and "vlog" directories as of Nov.10, 2005)
All the best, Suzana and Ian. ——–
Rules of Conduct – An Estates’ Perspective: “Competence” as Defined and Considered in the U.S. – Part III
Other areas dealt with in the Commentaries to the U.S. Model Rules of Professional Conduct that provide excellent guidance and assistance are discussions relating to:
- (1) lawyers for a fiduciary;
- (2) duties to beneficiaries;
- (3) the general nature of the duties;
- (4) the need for good faith, fairness and impartiality;
- (5) determinative duties to beneficiaries; and
- (6) anticipating and avoiding conflicts.
In the course of analyzing the ACTEC Commentaries, we also intend to consider the interplay of the Law Society of Upper Canada’s Rules of Professional Conduct. Many of the MRPC (Model Rules of Professional Conduct) are similar, if not identical, to the Law Society’s Rules of Professional Conduct.
Of course, while looking at the U.S. experience, we will also be keeping in mind the Rules of Professional Conduct in Ontario to serve as an illustration and a benchmark for this particular jurisdiction. Competence The MRPC Rule 1.1 provides that:
"A lawyer shall provide competent representation. Competent representation requires the knowledge, skill, thoroughness and preparation reasonably necessary for the representation."
In a future blog, we will undertake a comparison with the Law Society of Upper Canada’s equivalent comments on competence. Now, in an effort to provide a social media update, the following are some useful resources to look at. By including these references here, we do not "endorse" them, but hope that you find these as useful places to get more information. There is, of course, a wealth of information in addition to these resources, and this is not intended to be an exhaustive list at all:
Basic steps (this link has a great diagram and a description of the basic steps of how a podcast works)
Enhanced iTunes (making enhanced podcasts in iTunes)
Enhanced Windows (making enhanced podcasts using Windows Media Player)
All the best, Suzana and Ian. ——–
READ THE TRANSCRIBED PODCAST HERE
In Hull on Estate and Succession Planning Podcast #12, we continued with our discussion of trusts and, in particular, the concepts of the “prudent investor” rule and incentive trusts.
Rules of Conduct – An Estates’ Perspective: An Introduction to the ACTEC Model Rules of Conduct and the Commentaries- Part II
In addition to the basic themes of the Commentaries (see our June 9, 2006 blog), they also reflect the role that the trusts and estates lawyer has traditionally played as the lawyer for members of the family. In that role, a trusts and estates lawyer frequently represents the fiduciary of a Trust or an Estate and one or more of the beneficiaries.
In drafting the Commentaries, the authors have attempted to express views that are consistent with the spirit of the MRPC (Model Rules of Professional Conduct) as evidenced in the following passage:
"The Rules of Professional Conduct are rules of reason. They should be interpreted with reference to the purposes of legal representation and the law itself."
The editors note (at page 1 of the Commentaries) that a goal of the Commentaries is to encourage a full discussion between a lawyer and a client as to the scope and the cost of the representation. Furthermore, the duties of trusts and estates lawyers are also carefully considered and described. In the U.S. jurisdictions, many of the parameters of the duties of estates and trusts lawyers are set out by opinions rendered in malpractice cases, which provide some guidance regarding some of the ethical duties of the lawyer as well.
Ian is honoured to be a Fellow of the American College of Trust and Estate Counsel and, as a Fellow, he receives ongoing updates from the perspective of U.S. Estates Law. Interestingly enough, the similarities between the United States and Canada are considerable. For example, the leading decision of Banks v. Goodfellow (1870), L.R. 5 Q.B. 549 is used as a benchmark testamentary capacity case in most U.S. jurisdictions. Therefore, the starting point with regard to the U.S. law and its experiences are fairly similar to ours in many situations.
One of the recent massive undertakings that ACTEC has completed is the fourth edition of the Commentaries on the Model Rules of Professional Conduct.
These model rules were first published in 1993 and the Commentaries continue to assist U.S. courts. There are ethics committees and other aspects of the U.S. Estates Bar that use these model rules as a true "benchmark" for many of the pressing issues.
As the introduction to the Commentaries explains, they generally seek to identify various ways in which common problems can be dealt with, without expressly mandating or prohibiting particular conduct by trust and estates lawyers. The Commentaries are intended to provide general guidance to the trust and estates lawyers.
Ian and I intend to work through the Commentaries in some respect throughout the next little while in our Podcasts; however, we thought that it might be helpful to, in a written format through our daily Blog, walk through some of these interesting issues as well.
The basic themes of the Commentaries are:
-the relative freedom that lawyers and clients have to write their own charter with respect to a representation in the Trust and Estates field;
-the generally non-adversarial nature of Trusts and Estates practice;
-the utility and propriety, in this area of law, of representing multiple clients, whose interests may differ but are not necessarily adversarial; and
-the opportunity, with full disclosure, to moderate or eliminate many problems that might otherwise arise in an Estates practice. (See ACTEC Commentaries, page 1).
More will follow on Monday… All the best, Suzana and Ian.