Tag: Covid-19 Pandemic
On March 30, 2020, Noah Weisberg blogged about the estate trustee’s duty to invest during COVID-19, a time when market fluctuations have become the norm. Today, I consider how pandemic-induced changes in the housing market may impact an estate trustee’s management of real property held by an estate.
Real properties – including primary residences, cottages, and vacation properties – are often some of the largest assets an estate trustee will deal with during the course of their administration of an estate. Unless otherwise stated in the deceased’s will, the estate trustee has a fiduciary duty to sell the estate’s real property for its fair market value and is expected to do so in a timely manner.
However, the exact timing for the market and sale of real property can depend on many factors. It is common for a will to grant an estate trustee the discretion to choose whether to sell or retain assets. As it pertains to real property, this power allows the estate trustee to hold onto a property until such time as they can achieve the best possible sale price on behalf of the beneficiaries. At the same time, the estate trustee needs to be mindful of the costs incurred by the estate in having to maintain the property. Beneficiaries of the estate may also put pressure on an estate trustee to sell the property and convert it to money sooner rather than later.
Like most industries, the real estate market has been impacted by COVID-19. An estate trustee should be attentive to whether recent changes in the housing market make it an ideal or inopportune time to market a particular property for sale, while also bearing in mind the factors described above.
If an estate trustee decides to list a property for sale in today’s uncertain housing market, there are a few things they can do to help protect themselves against future claims from beneficiaries. First, the estate trustee should have the property appraised for its fair market value by a professional appraiser who is an independent third party. For added protection, the estate trustee may want to have the beneficiaries sign off on the property’s price. The estate trustee should also make an effort to keep the beneficiaries apprised of each step of the sale process. Lastly, the estate trustee should take care to keep detailed records of all advice received and steps taken in the event that they need to justify their actions at a later date.
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The COVID-19 pandemic has forced the legal profession to alter the ways in which we practice. The need to keep litigation moving forward has brought to the forefront alternative processes and the importance of technology. Files are continuing to move forward during the pandemic via virtual proceedings, such as virtual courtrooms and virtual mediations. While some are embracing these platforms, others are more wary. In Arctoni v. Smith, 2020 ONSC 2782, Justice Myers considered whether an examination for discovery should proceed by videoconference, or if the plaintiffs were allowed to wait until the physical distancing restrictions are lifted and conduct the examination in-person.
The plaintiffs objected to a videoconference examination because they maintained that:
- They needed to be with their counsel to assist with documents and facts during the examination;
- It is more difficult to assess a witness’s demeanour remotely;
- The lack of physical presence in a neutral setting deprives the occasion of solemnity and a morally persuasive environment; and
- They did not trust the defendants not to engage in sleight of hand to abuse the process.
Justice Myers noted that the simplest answer to this issue is that “It’s 2020”. He went on to say that “we now have the technological ability to communicate remotely effectively. Using these technological methods is more efficient and less costly than personal attendance and we should not be going back.”
While the court endorsed the use of technology, it acknowledged that legitimate concerns exist. One of which is that technology can be abused. It was noted, however, that the possibility of abuse may still exist even if parties are in the same room. While it is important to remain vigilant against the risk of fraud and abuse, a vague risk of abuse is not a good basis to decline the use of technology.
Furthermore, the suggestion that the use of videoconferencing creates “due process” concerns was rejected as the court noted that all parties have the same opportunity to participate and to be heard. All parties also have the same ability to put all of the relevant evidence before the court and to challenge the evidence adduced by the other side.
With regards to the plaintiffs concern that they needed to be with counsel to assist with the documents and facts, Justice Myers stated that there are other ways in which counsel can convey information to their colleagues during an examination. For instance, Zoom offers “breakout rooms” in which counsel can privately meet with their colleagues and clients.
Case law depicts that there are many fears associated with assessing the credibility of a witness via video technology but these fears, by those who have never actually used the technology stated Justice Myers, may not be as significant as they seem. While solemnity and personal chemistry may be lost in remote proceedings, it is not yet known whether, over time, solutions to these shortcomings will be developed as familiarity with these processes grows.
Justice Myers emphasized that, in 2020, the use of readily available technology is “part of the basic skillset required of civil litigators and courts.” He went on to say that those who are uncomfortable with technology should obtain necessary training and education.
The court concluded that proceeding remotely does have its shortcomings; however, in this case, the benefits of doing so outweighed the risks. The plaintiffs main concerns could be resolved by creative alternatives or by increased familiarity with technology. By proceeding remotely, the litigation, which had been going on for years, would not have to be delayed. Consequently, Justice Myers ordered that, unless the plaintiffs chose to waive their opportunity to conduct the examination for discovery, the examination should proceed by videoconference.
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Ian Hull and Celine Dookie
This week on Hull on Estates, Noah Weisberg and Nick Esterbauer discuss continued accounting obligations during the COVID-19 pandemic and procedural considerations relating to fresh and pre-existing applications to pass accounts.
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