Tag: beneficiaries

19 Jun

Legal fees for probate – Playing it fair

Ian Hull Joint Accounts, Trustees, Wills Tags: , , , , 0 Comments

Not every estate requires probate, but it’s a near essential for many. And while lawyers retained to undertake the probate process on behalf of estate trustees are entitled to compensation, it must be fair and reasonable in the circumstances.

The main reason to seek probate is to gain the ability to deal with certain kinds of assets or certain kinds of third parties. In particular, if the estate includes real estate that is not held in joint tenancy, probate is usually necessary to transfer title to the property.

There can be a lot involved. The probate process involves a court application and the verification and valuation of estate assets, amongst other things. While it can be a straightforward process for many estates, it can be a complex undertaking in others. For example, the deceased may have owned property that needs an appraisal, or had multiple bank and investment accounts, or owned assets in foreign jurisdictions.

Legal fees will vary

For this reason, it’s never a “one size fits all” approach when determining a fair and reasonable legal fee for the probate process. Because it’s not always possible at the beginning of a matter to determine how long it’s going to take to do the job, many lawyers charge by the hour. However, others charge from 1.5% to 2% of the estate value to obtain probate. In Ontario, that can equal or exceed the probate fee (estate administration tax). While these amounts might also include fees for some of the estate trustee’s work, they don’t always. The courts have taken notice, and are requiring lawyers to have separate files: one for legal work and one for executor’s work. You can find an excellent discussion of these points and others relating to probate costs here: http://www.makeawillcanada.ca/truth-about-probate/.

Avoiding disagreements with beneficiaries over legal fees is important, not only for the administration of the estate but also as a matter of business – a solicitor would not wish to be seen as unfairly charging excessive fees. The way to avoid such allegation is through accurate docketing and providing a paper trail to justify actions taken – including a decision to incur professional fees in addition to any compensation for estate trustee work.

Thank you for reading.
Ian Hull

02 Mar

Hull on Estates #508 – Duties Owed By Drafting Solicitors to Disappointed Beneficiaries

76admin Archived BLOG POSTS - Hull on Estates, Beneficiary Designations, Hull on Estate and Succession Planning, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes Tags: , , , , , , 0 Comments

This week on Hull on Estates, Natalia Angelini and Nick Esterbauer discuss the recent decision of the British Columbia Court of Appeal in Johnston v Johnston Estate, 2017 BCCA 59, and the limitations of the duty owed by a drafting solicitor to disappointed beneficiaries.

 Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Nick Esterbauer.

24 Jan

Hull on Estates #503 – The applicability of limitation periods

Hull & Hull LLP Archived BLOG POSTS - Hull on Estates, Beneficiary Designations, Hull on Estate and Succession Planning, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Power of Attorney, Show Notes, Show Notes Tags: , , , , , , , 0 Comments

This week on Hull on Estates, Natalia Angelini and Noah Weisberg discuss the applicability of limitation periods to power of attorney accounting in the case of Armitage v The Salvation Army.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Natalia Angelini.

Click here for more information on Noah Weisberg.

04 Jan

The Need to Diversify

David Freedman Estate & Trust, Estate Planning, General Interest, In the News, Passing of Accounts, Uncategorized Tags: , , , 0 Comments

stocksnap_pchsij30cxHappy new year everyone!

I’m sure that we’re all a bit sluggish coming back from the holidays, but hopefully we’ll find the transition not too bad. By the way, did you know that Disney had a $67M life insurance policy on the life of Carrie Fisher?

I was reading through a bunch of recent cases on the weekend to catch up with recent developments, with the usual types of issues being raised (good news: nothing too major happened in the last couple of weeks). I enjoyed reading the Hon. Mr. Justice Bale’s short judgment in Mowry v Groome, 2016 ONSC 7850 (Ont. S.C.J). This was a contested passing of accounts but one in which the beneficiaries succeeded against the trustee for partial compensation for investment losses of about $165,000. Here there was a failure to diversify the estate’s portfolio in favour of retaining and renovating the deceased’s residence. It is a well-reasoned judgment that points out the need for a sensible investment plan – “[t]he whole purpose of diversification is to avoid the losses which can occur in the event of such unanticipated market events” as Justice Bale explained – rather than something more speculative.

Have a nice day!

David

29 Sep

Back to Basics II: Where are the Beneficiaries?

Doreen So Estate & Trust, Estate Planning, Executors and Trustees, Trustees, Wills Tags: , , , , , 0 Comments

As a second part to Tuesday’s blog, our very own Ian Hull was also a presenter at the recent Law Society of Upper Canada Practice Gems: Probate Essentials 2016 program on September 20, 2016.  Ian and our associate, Laura Betts, wrote a paper on various issues surrounding the obligation to locate and notify the beneficiaries of an estate and what may be done when a person cannot be located.

Estate trustee's have an obligation to locate and notify the beneficiaries of an estate.
“Issues may arise when a named beneficiary is simply unknown to the estate trustee and the family…”

These issues may arise when a named beneficiary is simply unknown to the estate trustee and the family, or they may arise when a class of beneficiaries are named and the exact identities of the deceased’s “cousins”, for example, may be unknown.

In a previous blog, Laura has outlined the obligation of an estate trustee to identify the beneficiaries of an estate with tips on how an estate trustee may conduct his/her “reasonable inquiries”.

As a tip for will drafting solicitors, Ian Hull suggested during the program that it will be helpful to include the known occupation and location of a beneficiary on the face of the will (e.g. Doreen So, lawyer, City of Toronto).

The Ontario Office of the Registrar General may also be a helpful resource to estate trustees as it is responsible for issuing birth, death, and marriage certificates in Ontario.

Thanks for reading.

Doreen So

07 Jun

Hull on Estates #470 – Rectification Revisited

Hull & Hull LLP Archived BLOG POSTS - Hull on Estates, Hull on Estate and Succession Planning, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes Tags: , , , , , 0 Comments

This week on Hull on Estates, David Smith and Nick Esterbauer discuss the equitable doctrine of rectification and situations in which Ontario courts may be willing to rectify wills and life insurance beneficiary designations.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on David Smith.

Click here for more information on Nick Esterbauer.

29 Apr

Posthumously-Conceived Children

Nick Esterbauer Estate & Trust, Support After Death Tags: , , , , , , , , 0 Comments

photo-1454908225854-b200322cd05a

Last month, an amendment to Minnesota’s Uniform Probate Code came into effect to limit the rights of children conceived after the death of one or more parents.

The addition under 524.2-120 of the Code states as follows (at Subdivision 10):

Notwithstanding any other provision of this section and subject to section 524.2-108, a parent-child relationship does not exist between a child of assisted reproduction and another person unless the child of assisted reproduction is in gestation prior to the death of such person.

The exception at section 524.2-108 provides that a child conceived before and born after death, who survives for a period of 120 hours, shall be treated as if living at the time of death of the deceased.  However, the update in the legislation clarifies that a child conceived after death does not constitute a child and would not, therefore, be entitled to related rights to inherit on intestacy or as a member of a class of beneficiaries created under a will.

In many other jurisdictions, including Ontario, there is limited clarity with respect to the rights of individuals conceived after death of a parent.  While the Succession Law Reform Act specifies (under the definition of “child” at section 1) that a child conceived before and born after death will be treated as if he or she had been living at the time of death of a parent or other family member, the same cannot be said of posthumously-conceived children with any certainty.

In certain circumstances, a surviving spouse may have the right to use genetic materials, being sperm or ova of the deceased spouse, to conceive a child in accordance with the terms of the Assisted Human Reproduction Act.  However, there is no legislation in Ontario that explicitly provides or denies children conceived after death status as a child, as if conceived or born after death.  Case law in other jurisdictions suggests that inheritance rights to a parent’s estate and entitlement to death-related benefits may be more likely to attach to a child conceived after death if (1) a genetic relationship between the deceased parent and child exists, (2) consent is given to the posthumous use of genetic materials for conception, and (3) the evidence available suggests that the deceased agreed to support a child conceived using the preserved genetic materials.

As rates of assisted reproduction continue to increase, it will be interesting to see how this area of estate law develops in Ontario to address the issue of rights of posthumously-conceived children.

Thank you for reading and have a great weekend!

Nick Esterbauer

12 Apr

Can an Estate Trustee settle claims on behalf of an estate?

Stuart Clark Executors and Trustees Tags: , , , , , 0 Comments

You are the Estate Trustee of an estate currently involved in a dispute with the deceased’s former business partner. In the context of such a dispute, the former business partner puts forward what you believe to be a reasonable settlement proposal which you are inclined to accept. Before accepting such a proposal however you ask yourself whether you, as Estate Trustee, unilaterally have the authority to seKU273L0WTWttle such a dispute on behalf of the estate, or if you are required to involve the beneficiaries of the estate as part of any settlement?

An Estate Trustee’s authority to settle claims on behalf of the estate is established by section 48(2) of the Trustee Act, which provides:

A personal representative, or two or more trustees acting together, or a sole acting trustee, where, by the instrument, if any, creating the trust, a sole trustee is authorized to execute the trusts and powers thereof may, if and as they may think fit, accept any composition or any security, real or personal, for any debt or for any property, real or personal, claimed, and may allow any time for payment for any debt, and may compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing whatever relating to the testator’s or intestate’s estate or to the trust, and for any of these purposes may enter into, give, execute, and do such agreements, instruments of composition or arrangement, releases, and other things as seem expedient without being responsible for any loss occasioned by any act or thing done in good faith.” [emphasis added]

While an Estate Trustee has the authority to settle any claim on behalf of the estate without the involvement of the beneficiaries, this does not necessarily mean that the Estate Trustee will be insulated from liability for their decision to have done so. The Trustee Act provides that the Estate Trustee shall not be liable for any loss associated with the settlement so long as the settlement was entered into in “good faith”. To this effect, whether or not the Estate Trustee will later be liable to the beneficiaries for any settlement will turn on whether any such settlement was entered into in “good faith”, with such a determination often being made within the context of a later Application to Pass Accounts. If the court concludes that the settlement was entered into in “good faith”, the Estate Trustee will not be liable to the beneficiaries. If the court concludes that it was not entered into in “good faith”, the Estate Trustee may be liable to the beneficiaries for the settlement.

In order to reduce any concern that the beneficiaries may later take issue with any settlement, many Estate Trustees will reach out to the beneficiaries to seek their prior approval. While such a route is often the safest option for the Estate Trustee to take, it is not necessarily mandatory, and the Estate Trustee may unilaterally enter into any settlement on behalf of the estate so long as they are prepared to justify any such settlement to the beneficiaries on a subsequent passing of accounts.

Stuart Clark

29 Mar

Hull on Estates #460 – Obligations of Trustees Pertaining to the Rule in Saunders v Vautier

Hull & Hull LLP Archived BLOG POSTS - Hull on Estates, Hull on Estate and Succession Planning, Hull on Estates, Podcasts, PODCASTS / TRANSCRIBED, Show Notes, Show Notes Tags: , , , , , 0 Comments

This week on Hull on Estates, Jonathon Kappy and Noah Weisberg discuss the duties trustees owe to beneficiaries as it relates to the rule in Saunders v Vautier.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Jonathon Kappy.

Click here for more information on Noah Weisberg.

10 Mar

Is Discrimination a Restriction on Testamentary Freedom?

Lisa-Renee In the News, Litigation, Public Policy, Wills Tags: , , , , , , , 0 Comments

Last year, Spence v. BMO Trust Company, 2015 ONSC 615 was one of the most significant estate cases of 2015.  In Spence, the testator made a Will that unambiguously and unequivocally disinherited one of his daughters.  The disappointed daughter applied to the Ontario Superior Court of Justice for an order setting aside the Will on the ground that she was disinherited solely because she had a child with a white man.  A third party swore an affidavit corroborating the Applicant’s evidence that her father disinherited her for reasons that were racially discriminatory.  Justice Gilmore accordingly set aside the entire Will on the basis that it was contrary to public policy against racial discrimination.  The Respondent BMO Trust Company appealed the decision.
FamilyThis week, the Ontario Court of Appeal released its long awaited ruling in Spence v. BMO Trust Company, 2016 ONCA 196.  The Court of Appeal overturned Justice Gilmore’s decision, stating that the principle of testamentary freedom to choose one’s beneficiaries is generally immune to judicial scrutiny.

In reaching its decision, the Court of Appeal appears to have significantly restricted the scope of the public policy doctrine in estate cases.  Simply put, a Will that does not impose any conditions that, on its face, offend public policy appears to be valid regardless of the testator’s intentions.  Thus, the Court in Spence found that the testator was free to disinherit his daughter even if his intention appeared to be racially discriminatory.

It remains to be seen whether the Applicant will seek leave to appeal to the Supreme Court of Canada.

To hear an interesting discussion about the earlier decision in this case check out Hull on Estates podcast #404

SUBSCRIBE TO OUR BLOG

Enter your email address to subscribe to this blog and receive notifications of new posts by email.
 

CONNECT WITH US

CATEGORIES

ARCHIVES

TWITTER WIDGET