Tag: estate planning
As we know, due to the COVID-19 pandemic, Ontario has passed emergency legislation allowing for Wills and powers of attorney to be executed and witnessed virtually, and in counterparts. This legislation will remain in effect for the duration of the declared emergency. Although Premier Doug Ford recently announced a plan for reopening Ontario, the timeline for doing so is still vague, and it’s unclear when the emergency will be declared to be at an end. Once the emergency is over, the normal rules for execution of Wills and powers of attorney, as set out in the Succession Law Reform Act, R.S.O. 1990, c. S.26, and the Substitute Decisions Act, 1992, S.O. 1992, c. 30, will once again govern how such documents may be validly executed.
Before coronavirus became such a pressing concern, there was some discussion in the United States, of allowing Wills executed electronically to be considered valid testamentary documents. According to this article in The New York Times, entitled “A Will Without Ink and Paper”, at the time the article was published in October 2019, some states already had laws to allow e-signatures on Wills, and others were looking to adopt similar laws this year.
In the US, the Uniform Law Commission has proposed the Uniform Electronic Wills Act, which is intended to serve as a model for states who wish to enact such legislation. The law would allow testators to complete the entire Will-making and execution process online, without a lawyer or notary present. There are already online services, currently serving states that already have laws allowing electronic Wills, which provide a platform for the creation of these digital Wills.
According to The New York Times article, the process of creating an electronic Will involves a testator creating a Will online, and then having a video-conference call with a notary. The notary will review the document, ask questions of the testator, notarize it, and send it back.
Although the concept of electronic Wills seems convenient, the costs may ultimately outweigh the benefits. As one lawyer quoted in the article states, signing a Will “is not like getting toilet paper delivered by Amazon instead of going to a supermarket…This is a solemn thing that people don’t do every day.” The “inconvenience” of consulting a lawyer, having a Will professionally drafted, and executed in the traditional way, will likely be worth the trouble for most testators, particularly when you consider that this is not a task that needs to be done repeatedly, at frequent intervals (like going to the grocery store to buy toilet paper).
The article mentions a number of points as to why electronic Wills may not be such a great idea. Without a lawyer’s involvement, there is a heightened risk for undue influence to go undetected. Testators with significant assets that may be structured in complicated ways, or who have unique family situations, such as a blended family, are not likely to be well-served by the creation (let alone the execution) of a Will online, without estate planning advice from a lawyer.
Desperate times call for desperate measures, and it is helpful to have alternate methods of executing Wills and powers of attorney in these unprecedented times. But when life goes back to normal, I think we can be comfortable with the return to the “old-fashioned” way of executing Wills and powers of attorney. Although some may consider the process to be cumbersome, the added protection for testators, and the comfort of an estate plan that takes into account each testator’s unique situation, is worth the price.
Thanks for reading,
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Does a testator have to sign his or her own Will to be valid? A little used provision of the Succession Law Reform Act permits a Will to be signed by some other person (an “amanuensis”) in testator’s presence and by the testator’s direction.
Our managing partner, Suzana Popovic-Montag, wrote several on this very topic.
With the logistical issues associated with execution of wills by video-conference, it may be that this manner of execution may become more widely used.
If this is to be done using presence by video conference, we have come up with some suggestions in our Hull e-State Planner Blog. (click here)
Note that the Substitute Decisions Act, 1992 does not specifically permit execution by an amanuensis for Powers of Attorney.
We continue in unchartered waters and we welcome any suggestions or comments.
We have blogged over these past couple of weeks about the novel issues which have arisen with the drafting and execution of Wills during the COVID-19 pandemic. Although we remain hopeful that there will be guidance and/or legislative changes from the government soon regarding how to address issues such as the witnessing of Wills for individuals who are in quarantine or self-isolation, a recent article from Dale Barrett in Lawyers Daily notes that it may not all be doom and gloom surrounding estate planning during the COVID-19 pandemic, as the recent significant drop in the stock market could make it an ideal time for certain individuals to complete an “estate freeze”.
An estate freeze at its most basic accomplishes exactly what the name implies, insofar as it “freezes” the value of an individual’s assets at a particular date and time prior to their death, with any “future growth” on the assets being attributed to someone else (often the individual’s children). The use of an estate freeze is often done as a tax planning tool, with the underlying rationale being an attempt to reduce the potential taxes associated with the deemed disposition of their assets upon their death, which is accomplished by “freezing” the value of the assets at their current value such that the growth is not as great as it otherwise may have been (assuming the asset would continue to grow in the future). Although the structure that is required to accomplish this is somewhat complicated and will require the involvement of professionals, in a very basic overview it is typically accomplished by having the individual create a new company that will ultimately hold the assets being “frozen”, with two classes of shares being created the first which is retained by the individual implementing the freeze and fixed at the value of the assets on the day the of the freeze, with the second class of shares being attributed any “gain” in value of the assets after the freeze attributed to someone or something else other than the individual carrying out the freeze (often ultimately benefiting their children). The implementation and steps required is more complicated and nuanced than the description above suggests, and will almost certainty require the involvement of professionals to ensure that the individual does not go offside complex tax rules, but you get the basic idea.
Although the availability and potential use of an estate freeze is not for everyone, the recent drop in the stock market associated with COVID-19 could create a potential advantage and incentive for people considering an estate freeze to do so now as they could potentially “freeze” the value of their assets at a lower value than they otherwise may have been able to. If you are considering an estate freeze you may wish to speak with a professional now about whether it may be an opportune time to do so and to ensure that it is properly implemented.
Thank you for reading and stay safe and healthy.
There are numerous resources available to estates and trusts lawyers to help them navigate their practice during these COVID-19 times. As there does not yet seem to be one amalgamated repository, I thought I would use today’s blog to highlight some sites that I tend to be frequenting:
The Law Society of Ontario
The LSO has created an easy to read list of FAQs. Certain questions that I have found particularly helpful include: the requirements regarding commissioning an affidavit, including affidavits of service; the use of virtual means to identify or verify the identity of a client; whether virtual means can be used to assess a client’s capacity; and, what are the best practices for using video conferencing in providing legal advice or services.
LawPRO is continuing to update avoidaclaim.com. Given that new claims reports continue to come in at pre-crisis numbers, lawyers must remind themselves that although the physical location of their practice may have changed, the level of service provided must not.
Hull & Hull LLP
If you are reading this blog, you are probably already aware of the comprehensive resources being provided by Hull & Hull LLP, which can be found here. If not, we are covering everything from estate planning to estate litigation, including the execution of wills and how to have litigious matters heard by presiding judges.
Ontario Bar Association
The OBA has set up a COVID-19 Action Centre. While helpful information continues to be provided, I find myself continually looking forward to their ‘mindful moments’ which arrive daily in my inbox.
Stay safe and wash your hands,
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We have previously blogged about NoticeConnect’s Canada Will Registry. The Will Registry allows lawyers and law firms to register their clients’ estate planning documents. Other lawyers are then able to search the Registry for the Will of someone who has passed away. The Registry alerts the lawyer who registered the Will of the search, and the lawyer can decide whether to disclose the existence and location of the Will.
On Tuesday, Premier Doug Ford released a list of essential businesses, which included lawyers, meaning that law firms may remain open during the shut-down of non-essential businesses in Ontario. That being said, we are still being encouraged to maintain social distancing, and many of us are working from home to try to help prevent the spread of COVID-19.
Working from home can present a unique set of challenges for solicitors with an estate planning practice, given the volume of original documents that must be stored, organized, updated, and maintained. Records may be kept partially, or entirely by paper records, which are physically located at the office, and inaccessible from home.
The Will Registry can be a helpful tool in organizing estate planning documents electronically, in order to reduce or eliminate issues with accessing records and information when working remotely.
NoticeConnect recently posted this blog setting out how the Will Registry can help professionals work from home. For instance, one of the tools mentioned is the ability to attach electronic copies of documents, such as Wills, to your registered records. This would allow you, and any staff who have access to your digital Will vault, to access and review estate planning documents. This may be helpful in a situation where a client contacts you seeking advice as to whether their Will needs to be updated; you would not be required to go into the office in order to review the client’s Will. There are also organizational tools, which can help with searching, sorting, and updating your records.
In these uncertain and constantly changing times, it is useful to consider any tools that may help us adapt and maintain our practice.
Thanks for reading and stay safe!
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Most of us are used to meeting our clients in person. With that option on hold for now, we are having to adopt new practices, like “virtual” meetings. How can we make virtual meetings work for estate planning where communication is so important?
Like many of you, we are turning to technology.
Remote meeting software, like Skype and Zoom, allow us to communicate, see and hear our clients and vice versa. And yet, there can still be a disconnect in trying to ensure that both parties understand one another.
There is now software that can help with that communication. Hull e-State Planner, which we created, is cloud based software that can be accessed from home and shared with your client via Zoom or Skype. It’s a visual platform so you and your client can literally be on the same page – even in different locations.
The client’s family tree and list of assets are displayed on the screen.
You can drag and drop assets, creating legacies and bequests, while the client watches their plan being developed.
While discussing their instructions, you can show the client the different implications of their decisions.
At the meeting, you can give the client a graphic summary of their Will.
Once the meeting is over, you can automatically generate the Will and Powers of Attorney in Word format.
We have found that virtual meeting software, when coupled with Hull e-State Planner, can help make those estate planning meetings much more efficient and effective.
As well, we also understand there has been a financial impact to your practice during this time. In what we hope may help a little, we have decided to waive all Hull e-State Planner fees, for the foreseeable future until things settle down.
We’d be happy to have you join us for a Free Webinar where we will show you how we are using virtual meeting software and Hull e-State Planner together and our thoughts on getting Wills signed up.
The Webinars are:
Click on the date to sign up for the Webinar.
Wishing you and your loved ones good health,
In our blog on March 18th, we gave some ideas for getting formal wills executed when the lawyer couldn’t be present to witness. In today’s blog, we have a few more options for our clients to consider if getting a Will executed immediately is necessary.
As we all know, holograph Wills are valid in Ontario. To qualify as a valid holograph Will, the document must be in the handwriting of the Will-maker and signed. The Succession Law Reform Act speaks to being “wholly” in the Will-maker’s handwriting. However, case-law supports the validity of a handwritten portion of a document, even if the entire document is not in the Will-maker’s handwriting. To the extent any part of the document is not in the Will-maker’s handwriting, that part will be excluded from the otherwise valid holograph document.
We have several clients who are in isolation making it impossible to have two witnesses execute our drafted Will. For a simple but, emergency situation, we are recommending that a holograph Will be done. We have a few key provisions to be included as a bare minimum:
- Identifying the document as a Will;
- Revoking prior Will;
- Appointing an executor;
- Simple dispositive provisions;
- Executor’s power to sell; and
The key instructions are:
- The entire document must be handwritten by the Will-maker; and
- The Will-maker must sign the document at the end.
Proof of handwriting will be necessary if the holograph Will must be probated. One option that may come in handy is to have the Will-maker video the writing and signing of the document.
We also strongly recommend that the client come in to sign a formal Will as soon as possible.
Click on the link to see a sample Client Holograph Will Instruction sheet for use in these kinds of situations.
In Monday’s blog, we’ll discuss the novel idea that our colleague, Mary Stokes raised. Can a client use a simple holograph Will to incorporate the terms of a comprehensive formal Will which can’t be properly signed because of a lack of witnesses?
Hope you are all safe and healthy,
Like many of you, we are struggling to figure out ways to get our clients’ Wills executed during this period of social distancing.
Ontario has very strict rules on how a Will has to be executed in order for it to be valid. Unlike many other Provinces, Ontario does not have “substantial compliance” legislation that allows a Court to validate a Will that has not been duly executed.
These rules cannot be changed except by legislative action. The Succession Law Reform Act would have to be amended. The Law Society of Ontario is not able to give permission to override these requirements.
The key requirements are that:
- The Will-maker must sign or acknowledge his/her signature in the presence of two witness; and
- Both witnesses must sign in the presence of the Will-maker and each other.
The “presence of” requirement is generally regarded as having to be in the same room and be able to see one another signing the Will.
We have almost always resisted sending the Will out to be executed by the client without our presence for fear that it would not be executed properly. However, under the current circumstances, we are adopting a process for our clients who need to have their Wills signed.
Protocol for Remote Execution
Firstly, we explain to the client the strict rules for signing the Will and that the Will won’t be valid unless these rules are followed exactly.
We also remind them of who cannot be a witness:
- A Beneficiary (even a contingent beneficiary);
- The married spouse of a Beneficiary; or
- A person under age 18.
A person who is named as an executor, but not a beneficiary, can be a proper witness.
We’ve created this Client Will Signing Checklist document that we send to the client and ask them to complete during the Will signing and send back to us. Here is a link to the document.
Some firms are asking their clients to video the Will execution process in such a way that all three parties, the Will-maker and the two witnesses are visible. The client can send a copy of the video for the lawyer’s files. Of course, this is not required, but may put you more at ease when you see that they did it correctly.
The Affidavit of Execution can be prepared and sworn after the signing.
Once we are able to interact in person, we are recommending that our clients come in to re-sign their Wills at our office, just to be on the safe side.
Thank you for reading.
Coinbase co-founder and CEO Brian Armstrong recently blogged about the future of cryptocurrency, predicting that it will reach 1 billion users by the year 2030 (up from about 50 million at the start of this decade). With the anticipated increased uptake of cryptocurrency, we can expect that more and more people will hold these types of digital assets on their death. The question then arises: how should cryptocurrencies be dealt with in one’s estate plan?
By way of background, cryptocurrency is virtual currency that uses cryptography to verify financial transactions and control production of currency units in a decentralized, peer-to-peer exchange network. Cryptocurrency runs on Blockchain technology, which allows for blocks of information about transactions to be recorded and stored on a distributed ledger. When a transaction takes place, a block is added to the blockchain and there is a corresponding change in balance in the buyer and seller’s cryptocurrency wallets.
A cryptocurrency wallet or “crypto wallet” contains a person’s public and private keys – the former is used to receive cryptocurrency and the latter is used to spend/send cryptocurrencies to other wallet addresses. The crypto wallet is the only means of accessing one’s digital currency. There are different types of wallets that can be used to store and access digital currency, such as online accounts, mobile apps, external hard drives, or simply paper.
Because cryptocurrency is an intangible asset with little to no paper trail, special estate planning considerations should be made to ensure that the value of these digital assets is not lost on death and can be distributed to the intended beneficiaries.
First, the cryptocurrency owned by a person should be expressly referred to in their will to ensure that their executor is aware that these digital assets exist. A testator should then provide sufficient detail for their executor to be able to locate and access the testator’s crypto wallet. Specifically, the testator should describe what type of crypto wallet they have, where it is stored, and provide any other information that may be needed to access the crypto wallet. Instead of listing this sensitive information in the will itself, which becomes part of the public record through the probate process, a testator should include it in a memorandum to their will.
Thanks for reading!
Goss Estate (Re), 2020 ABQB 121 (CanLII) is the most recent case to discuss the applicability of the Rule Against Perpetuities.
As stated in the case, “Cases involving the Rules Against Perpetuities are rare, however the Rule is alive and well in Alberta…”.
The case notes, dramatically, that the common law doctrine limits “the grasp of the dead hand … on the hand of the living.”
Simply put, the Rule provides that “No interest is good unless it must vest; if at all, not later than 21 years after some life in being at the creation of the interest.”
In Goss Estate, the Rule was applied and the trust created by the testator was found to be invalid. There, the deceased left a will that provided that the residue of the estate was to “be retained in trust for future generations of children and grandchildren”, with only the interest on the capital to be paid out. There was no ultimate residual beneficiary named.
Although Alberta has a “wait and see” rule that provides that if an interest may vest during the period, the trust is not necessarily invalid, such a provision did not apply in Goss as the court found that the interest was incapable of vesting within the perpetuity period.
In conclusion, the court found that the trust was invalid. As there were no named residual beneficiary, the estate passed on an intestacy, to the testator’s two children. With respect to the trust that was intended, “While [the testator] had somewhat noble ideas about how to deal with his estate, perpetual trusts have been unenforceable since 1682”.
For other blogs on the Rule Against Perpetuities, see Stuart Clark’s blog, Rule Against Perpetuities – It’s not so scary, and my blogs, Property Rights and the Rule Against Perpetuities and Hollywood, and the Rule Against Perpetuities.
As always, thank you for reading.