Trustees often run into difficulties when they pay themselves compensation prior to passing their accounts. They are said to have "pre-taken" compensation, meaning having paid themselves compensation prior to passing their accounts. Fortunately for guardians of property (and attorneys), section 40 of Ontario’s Substitute Decisions Act allows guardians to pay themselves compensation at intervals during the guardianship before passing their accounts:
(2) The compensation may be taken monthly, quarterly or annually.
Amounts taken monthly or quarterly could be divisions of a calculated "annual" amount, but this provision contains no element requiring equal divisions. Regardless of how the property guardian takes compensation, any payment is subject to court approval. Clients applying for guardianship should always be advised specifically of this point: if the court later disagrees with the compensation taken, the guardian may have to repay such amounts. This holds true even where the Management Plan pursuant to which the guardian is managing the incapable person’s property authorizes the compensation the guardian has taken.
This raises another important consideration for lawyers in the application for guardianship stage. Any compensation taken, or claimed later on a passing of accounts, should not be inconsistent with the provisions of the Management Plan. Because the right to compensation is statutory, as are the prescribed percentages (though subject to discretionary reduction by the court), there is no need to declare an intention to take compensation in the Management Plan. But if the Management Plan contains a provision disclaiming compensation, for instance, no compensation should be taken during the guardianship.
Have a great day,
Christopher M.B. Graham – Click here for more information on Chris Graham.
Although one of the perils of running an estate blog over the past month has been (with apologies to CNN) the risk of over-reporting on the estate of Michael Jackson, the media frenzy has nonetheless served to shine a light on certain aspects of estate planning that otherwise go unnoticed.
A clause appointing a guardian for one’s child(ren) is not always one that younger testators choose to put in their wills. This may in part be due to the statistical unlikelihood of both parents dying before a child reaches the age of eighteen. In such a tragic eventuality, and as Natalia Angelini noted in her recent blog on the subject, the ultimate decision on guardianship is in the court’s discretion.
A recent article posted online by the Canadian Press comments on the difficulty that couples may encounter in trying to agree on a guardian for their child(ren). Some will want a friend; others will insist on a family member. Complicating any decision may be such considerations as the likelihood of the proposed guardian relocating to a foreign jurisdiction or remarrying someone who, in hindsight, may not prove to be a good parent to the children.
It is always a good idea to plan for any statistical anomaly. The Courts will typically respect the choice of the testator and assign great weight to his or her wishes. The alternative of leaving the decision completely unfettered by such wishes is not one that any parent of a young child would want to contemplate.
David M. Smith
The sudden death of Michael Jackson has sent a shock-wave of sadness across the globe. I expect it will be some time before you can tune in to various media without seeing coverage on it.
I find myself drawn in to the discussion, which one of my colleagues also blogged on last week. His commentary focused on the expected complex administration of Jackson’s estate, given both his sizeable assets and debts. This blog focuses on one aspect of the human element of the tragedy, sparked by Jackson’s Will.
As noted in a recent New York Times Article, in his Will Diana Ross is appointed as the guardian for Jackson’s children if his mother is no longer willing or able to fulfill that role.
In Ontario, a custody or guardianship appointment by Will is not determinative of the issue. It only has a temporary effect, in that any appointment for custody or guardianship expires ninety-days after such appointment becomes effective (i.e. ninety-days from the date of death in this case) (see section 61(7) of the Children’s Law Reform Act).
However, if the appointee applies to the court for custody or guardianship within the ninety-day period, the appointment expires when the application is disposed of. While each case is usually fact-specific, I would expect that a testator’s wishes set out in his/her Will is a factor a court would give significant weight to when considering such an application.
In Jackson’s case this issue is already a live one, with potentially several people vying for custody and/or guardianship. It will be interesting to see who ends up being the primary caregiver(s) of his young children.
Have a great day,
With the remarkably cold January (and now February) we have experienced, it is sadly inevitable that there may be seniors who fall victim to the elements. However, a recent web posting regarding a 93 year-old WWII vet who died of hypothermia in his own home after the power was cut off is simply tragic. The tragedy was compounded by the fact that there was no reason for him to be in arrears on his utility payments: he left an estate of over $500,000.
Clearly this story raises at least two issues: (i) whether the cutting off of power in the deep of winter can ever be an appropriate remedy for non-payment of bills and (ii) whether this gentleman was in need of assistance from a substitute decision- maker.
Stories such as these should be rare and, thankfully (hopefully?), are. However, there are many vulnerable seniors who are at risk in the winter months. For those who are in need, incapable to manage their property or care for their person, and who do not have a Continuing Power of Attorney for Personal Care (and Property), there is doubtless a positive moral obligation for concerned family members to seek guardianship. Such a step is likely to be perceived as threatening by such a person in need of assistance. However, in circumstances where lives may be at risk, there may simply be no other option.
David M. Smith
Listen to Guardianship in Canada
This week on Hull on Estate and Succession Planning, Suzana Popovic-Montag speaks with Rodney Hull about how the law has changed in Canada as it pertains to the appointment of guardians. Rodney suggests that today’s laws (post-1994) are clearer than they were in the past.
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This week on Hull on Estates, David Smith and Natalia Angelini talk about the duties an estate trustee he or she is charged with from the moment of a testator’s passing. Duties include locating the will, making funeral arrangements and being responsible to see the intentions of the testator preserved.
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The Interrelationship Between a Guardian of Property and a Trustee Under a Testamentary Trust – Hull on Estates Podcast # 133
This week on Hull on Estates, Rick Bickhram and David M. Smith discuss the complications that can arise when an incapable person is both the subject of a guardianship order and the beneficiary of a testamentary trust.
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Listen to Appointing a Guardian
This week on Hull on Estate and Succession Planning, Ian and Suzana talk about appointing a guardian for your children. They also discuss Ian’s appearance on BNN’s Strictly Legal with Michael Cochrane.
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Comments? Send us an email at firstname.lastname@example.org, call us on the comment line at 206-457-1985 or visit the blog at http://estatelaw.hullandhull.com/
Over the Christmas break, a news story out of Winnipeg captured national headlines. Samuel Golubchuk is 84 years old and on life support in Winnipeg’s Grace Hospital. He apparently suffered a brain-injury from an earlier fall and part of his brain was removed at the time. Tragically, Mr. Golubchuk cannot walk, speak, eat or breathe on his own. His treating physicians say Mr. Golubchuk has no chance of recovery and that his quality of life is negligible. They want the right to remove him from life support. The news stories don’t indicate whether Mr. Golubchuk left a power of attorney or end-of-life instructions.
Mr. Golubchuk’s family has gone to court to resist any attempt by the hospital’s doctors to remove him from life support. Mr. Golubchuk’s family claims that removing life support would violate Mr. Golubchuk’s orthodox Jewish belief and amount to an assault as it would hasten his death.
In early December, the family was granted a temporary court injunction while a local judge considered the case. In January, the family returned to court and presented two opinions from New York doctors. According to the family’s doctors, Mr. Golubchuk was not beyond hope.
The family has maintained throughout that it is a matter of self-determination and the right to live in a free and democratic society without an outside party making decisions for you. The hospital, on the other hand, maintains that it is up to the treating physician to make a judgment call as to whether or not life support should be removed.
As far as I can tell, the judge hearing the case has still not decided what will happen to Mr. Golubchuk. However, it is clear that the courts struggle with life and death decisions as much as guardians or family members do. There are simply no easy answers. In the end, I think it is difficult to say how any one of us would act or react when confronted with the ultimate decision.
Keep thinking and thanks for reading.