Tag: Hull on Estates
In this day and age the priorities for one’s home are changing. Generally, people want to live a happier, healthier and “greener” lifestyle.
I recently came across the blog “Rethink. Reclaim. Remain.” written by Sam and Ryan McLaughlin, who are attempting to do just that. The parents of two, with one more on the way, are renovating their home while keeping three things in mind: “living happily, healthily, and considerately on this planet.”
One problem faced by many young families is how to fit everyone under one roof. The McLaughlin family sought to create the space they needed to accompany their growing family by building an addition to their current home using environmentally friendly and reclaimed materials.
The blog examines how to prioritize not only your time, but your resources. The McLaughlin’s wanted their home to reflect the ideas of sustainable living. To achieve this, they plan to repurpose and reuse viable components and materials. Their design plans incorporate both natural and reclaimed materials into the flooring, structure, finishes and furniture of the new addition. This includes reclaimed factory decking, exposed spruce joists, and reclaimed steel beams.
The environmental movement has seen a surge in recent years. The trend towards “going green” has spread from redesigning office spaces into remodeling homes. The McLaughlin’s blog is one family’s journey to transform their current home into an eco-friendly forever home.
Like every home renovation show on HGTV, not everything goes according to plan. The blog highlights some of the do’s and don’ts for Do It Yourself (DIY) home renovations and when it might be time to call in the contractors.
For those of you who are interested, I highly recommend reading the McLaughlin’s blog and checking out their renovation plans.
Thanks for reading!
We all love a good story. Places like Hollywood were built on that premise. And while there are thousands of great stories built around things like love, war, superheroes, and disasters, there are a surprising number of great stories built around an area you likely would never have considered for bedtime reading: estate planning.
Yes, you read that right. When you think about it, it’s not that surprising. When it comes to leading families, estate planning involves the planning and allocation of enormous wealth, and, in many cases, successful businesses.
Add in the human dynamic – from greed, jealousy, incompetence, and hatred to caring, generosity, kindness, and love – and there are many interesting stories out there.
And they don’t all end well. Take International Management Group (IMG) and Mark McCormack. Starting in 1960, McCormack built his sports agency into a powerhouse, representing the world’s top golfers – Arnold Palmer, Jack Nicklaus, Tiger Woods – as well as top players from many other sports.
Just as IMG had set up financing for a huge expansion in 2003, Mark McCormack died suddenly of a heart attack at age 72. Even though his sons were involved in the business, and his second wife inherited the shares, there was no true succession planning in place. Sadly, with a huge leadership vacuum and high debt, his widow was forced to sell to a buyout firm and the family lost a business more than 40 years in the making.
Contrast that with the story of Milton Hershey, of the chocolate bar fame. At age 61, and in good health, he transferred virtually all his wealth and company shares into a trust for the benefit of a school for underprivileged children. More than 70 years after his death, his company has expanded worldwide, the trust still owns the company, and his humanitarian vision for business and community is thriving.
Motivate your planning – read some stories
Creaghan McConnell Group – a firm of professionals in Toronto who help leading Canadian families and their advisors find and design their future ownership and financial security strategies – have written up these family stories and others on their website. The stories aren’t long, but they’re a fascinating read, and provide insights into how good planning can make a huge difference to future generations: http://www.cmgpartners.ca/cmg-insights-grid/
Thank you for reading.
A “power” is an authority to act, whereas a “duty” is an obligation. A duty of an estate trustee compels her to act, or prohibits her from acting in certain situations. A power, on the other hand, allows her to act in a certain way, subject to her discretion.
An estate trustee faces potential personal liability from unauthorized actions in the administration of an estate. Although, generally a will prescribes specific powers and duties for an estate trustee when it comes to the administration of the estate, there may also be a situation which the will simply does not contemplate.
As an estate trustee, or even as a beneficiary under such a will, how does one assess what an estate trustee can and cannot do?
The Trustee Act, RSO 1990, c. T23, as amended, is helpful in determining what an estate trustee’s powers and duties are, in the absence of a clear direction from a will.
It is not unusual for an estate trustee to be given discretion with respect to the exercise of administrative powers conferred to manage the estate. However, she may also be given the authority to allocate estate property to the beneficiaries. That kind of power is referred to as dispositive power or discretion and may require an estate trustee to do such things as, divide income and/or capital between beneficiaries at a time of her choosing.
Generally, the powers of an estate trustee will depend on the specific nature of the estate. For example, if the estate consists of property that is to be administered as an investment, the estate trustee will likely be allowed a power of sale, a power to mortgage, and a power to lease. The estate trustee must have the power to keep the property intact as well as meet all financial claims of third parties. An estate trustee will also generally have the power to insure any real property, against loss or damage.
With respect to expenses related to the estate, the estate trustee who believes that an expense is properly incurred, may either pay for it directly from the estate property or pay for the expense personally and later recover the corresponding amount. It is important to note, however, that a court may later disallow an expense if it concludes that it was not properly incurred.
In exercising each power that the estate trustee might have, she must keep in mind that there are certain duties that limit her powers.
- If a power of sale is to be exercised, she cannot delegate it to a third party and later escape responsibility in the event that there is an issue, on the ground that she did not choose the purchaser.
- An estate trustee cannot sell a property to herself, a beneficiary, or a third party with the agreement that she will then re-purchase the said property.
- If the estate trustee sells the trust property, not only must she be honest, but also show a reasonable level of care and skill in her conduct, throughout the transaction. For example, she should not convey title until payment is received, and if she does do so and there is a resulting loss to the estate, there may be personal liability.
An estate trustee with significant discretion in administering the estate can certainly be put in a difficult position with respect to how such discretion is to be exercised. Unfortunately, there are few guidelines available on that end, short of exercising one’s own good sense.
Thanks for reading.
Find this blog interesting? Please consider these other related posts:
Estate Trustees’ Standard of Care
As estate litigators with decades of experience, we’ve seen it all when it comes to estate disputes. Our firm has dealt with thousands of cases and family situations. Not surprisingly, we’re often asked if there’s a bulletproof will that’s beyond challenge. Is there a way to guarantee that a will can’t be successfully attacked and your wishes thwarted?
The truth is a simple one: there is no 100% certain solution. However, while you can’t get a coat of armor for your will, you can build some thick layers of protection that can greatly reduce the chances of it being successfully challenged. Here are three ways you can help prevent will disputes:
- Make sure your planning is current
Times change, family situations can change, family wealth can change. In so many cases, a will drafted 20 years ago will not accurately reflect the true wishes of a testator or the true expectations of beneficiaries. But we’ve seen those situations time and time again – and that’s when conflicts occur.
Here’s your first layer of protection: make sure you will and estate plan are up-to-date and reflect your current situation and wishes. It sounds obvious, but it’s a trap many fall into. To get it right, you need advice from a lawyer or advisor with a deep understanding of your assets and your family situation. It’s worth the time, effort, and expense to ensure you capture your current wishes and situation in your planning.
- Talk it out
The most obvious step to take is often the most difficult to execute: talk to your family. Let them know your plans, listen to their concerns, explain your reasons, and adjust your planning as needed to minimize the chances of dispute after you’re gone. Even if you can’t resolve family conflicts entirely, your clear communication of your wishes – and your willingness to listen to the concerns of family members – will go a long way to minimizing a challenge to your will.
- Add a “no contest” clause to your will
This is truly a band aid solution, as it doesn’t address the true cause of conflict or attempt to resolve it. But in cases where you suspect that a challenge to your estate plans will be launched, adding a “no contest” clause to your will can be effective in thwarting it. With a no contest clause, when a beneficiary contests a will, it invalidates their inheritance, and the assets are distributed as though the beneficiary predeceased the testator. Such a clause has typically been upheld as enforceable by courts in Canada. However, there are exceptions, and great care and expert advice is needed when adding this provision to your will.
We discuss a few different angles of these issues in this article and Hull & Hull TV episode: http://www.huffingtonpost.ca/suzana-popovicmontag/family-will-conflict_b_3676914.html
Thank you for reading.
In this week’s episode Paul Trudelle and Jonathon Kappy discuss a possible culture shift in the courts of probate, and the minimal evidentiary threshold required to proceed with a will challenge as articulated in Seepa v. Seepa, 2017 ONSC 5368.
You can read more about this decision on our blog here.
Should you have any questions, please email us at firstname.lastname@example.org or leave a comment on our blog.
Tomorrow marks the end of World Alzheimer’s Month, a campaign to raise awareness and challenge the stigma surrounding dementia.
MP Lisa Raitt marked the occasion this month by making a member’s statement in the House of Commons. In her statement, she noted the 564,000 cases of Alzheimer’s disease in Canada, and the 25,000 newly diagnosed cases each year: one of which was her husband Bruce Wood in 2016 at the age of 56. Raitt stated that the diagnoses presents significant challenges, but that “living with dementia can be okay”.
Alzheimer’s Disease International states that the stigmatization and misinformation that surrounds dementia remains a global problem, and that 2 out of 3 people globally believe that there is little or no understanding of dementia in their country.
Canada appears to be making progress in addressing some of the issues surrounding Alzheimer’s disease. In June, 2017, Bill C-233, the National Strategy for Alzheimer’s Disease and Other Dementias Act, received Royal Assent. The Act requires the federal Minister of Health to develop a comprehensive national strategy to address all aspects of Alzheimer’s disease and other forms of dementia. Within 6 months, the Minister of Health must convene a conference with her provincial counterparts and other stakeholders for the purpose of developing the national strategy. The Minister is to report to Parliament within two years of the proclamation of the Act.
As another resource, the Alzheimer Society Canada website is an excellent tool for raising awareness and a better understanding of the disease, with detailed information about dementia and Alzheimer’s disease, and living with the disease.
Thank you for reading.
Let’s say that you are an estate trustee of a trust, or a beneficiary of a trust. The trust consists of investments. How can you be sure that the investments are performing adequately?
A new product from Asset Risk Consultants will allow you to make a quick check of the performance of the investment portfolio.
“Performance QuickCheck” allows you to enter information about the portfolio, and will immediately compare its performance to 130,000 portfolios having similar risk across five major currencies.
To conduct the check, users pick their currency (currently, British Pounds, US dollars, Euros, Swiss Francs or Canadian dollars), and the percentage of the fund invested in equities (allowing the comparison to be made based on the risk assumed by the trust: either cautious, balanced, steady growth or equity risk). The program then asks for the period over which the portfolio was held, and the percentage return over the period.
The program will then compare your investment return to other portfolios having similar risk.
For example, a Canadian portfolio holding 30% equities producing a 7% return for the period from June, 2016 to July 2017 will result in a smiley green face, indicating above average performance. However, a Canadian portfolio holding 80% equities producing a 7% return for the same period will result in a sad red face, indicating below average performance. As suggested by the website, trustees may want to ask their investment manager for a comment, or consider another investment manager. Beneficiaries may want to speak to the trustee, or legal counsel.
A more comprehensive report is also available, for a fee of £25.
Performance QuickCheck from Asset Risk Consultants is a great, easy to use, free tool to allow you to quickly ask and answer, “How am I doing?”.
Have a great weekend.
Today on Hull on Estates, Jonathon Kappy and Umair Abdul Qadir discuss vacant possession of real property belonging to an estate and the recent decision in Filippelli Estate v Filippelli, 2017 ONSC 4923.
You can read more about this decision on our blog here.
Should you have any questions, please email us at email@example.com or leave a comment on our blog.
The recent Court of Appeal of Alberta decision in Goold Estate v. Ashton, 2017 ABCA 295 (CanLII) addresses the issues of presumptions and the burden of proof surrounding lost wills and the presumption of revocation.
There, the deceased died leaving a holograph will. The holograph will revoked a prior formal will. However, the holograph will could not be found following the deceased’s death.
The court referred to the presumption of revocation: a will will be presumed to be revoked by destruction where the original cannot be located after the death of the deceased. The party relying on the presumption of revocation has the burden of proving (a) possession and control of the will by the testator; (b) continuing capacity to revoke the will; and (c) the absence of the will after death.
As to the second point, in order to rely on the presumption of revocation, the party relying on it must show that the testator had capacity to make or revoke a will. On the evidence, it was not clear as to when the will was revoked and when the testator lost capacity. There was evidence that the testator did not have capacity for a significant portion of the time during which the holograph will was under the testator’s control. The party relying on the presumption was therefore not able to discharge the burden on her to establish that the testator had capacity at the time of the revocation of the will. The Court of Appeal upheld this analysis.
Once the presumption is found to apply, the presumption can be rebutted by showing, on a balance of probabilities, that the testator did not destroy the will or intend to revoke it. The judge below found that, even if the presumption did apply, the presumption had been rebutted. The court considered:
- whether the terms of the will were reasonable;
- whether the testator continued to have a good relationship with the beneficiaries of the lost will;
- whether personal effects of the deceased were destroyed prior to the search for the lost will being carried out;
- the nature and character of the deceased in taking care of personal effects;
- whether there were any dispositions of property that support or contradict the terms of the lost will;
- statements made by the testator which confirm or contradict the terms of the lost will;
- whether the testator was of the character to store valuable papers, and whether the testator had a safe place to store them;
- whether the testator understood the consequence of not having a will; and
- whether the testator made statements to the effect that she had a will.
The judge below found that there was sufficient evidence to establish, on a balance of probabilities, the absence of an intention to revoke the holograph will. The Court of Appeal would not interfere with these findings of fact.
For other discussions of lost wills, see What Does One Do When There’s a Lost or Defective Will? and Saving Lost Wills?
Thank you for reading. I presume that you will have a great weekend. Don’t rebut my presumption.
There are a few holdovers from the Mad Men era of 50 or 60 years ago, when men were the primary breadwinners and wealth managers – and women looked after the home and family.
On the home front, even though almost four out of five women work outside the home, they still do more housework than men. Yes, men are getting better, but as Maclean’s magazine puts it, this evolution is happening “at a glacial pace”:
Perhaps more importantly, the money management part of the 1950s has also been slow to change – with some significant differences in financial literacy and financial confidence between men and women. According to research from Sun Life Financial: https://www.sunlife.ca/static/canada/GRS%20matters/GRS%20matters%20articles/2015/Bright%20Papers/Mind%20the%20retirement%20Gap_Unretirement%20Paper_E%2006-15_June%2011.pdf:
- 46% of women say they lack sufficient knowledge about how much retirement income they would need, versus 37% for men
- 35% of women say they lack sufficient knowledge about how to select investments, versus 26% for men; and
- 32% of women say they lack sufficient knowledge about government programs (such as CPP/QPP, Old Age Security), versus 24% for men.
RBC has also studied the issue and reached a similar conclusion, with only 48% of women feeling confident in their knowledge of wealth and money topics, versus 65% of men: https://www.rbcwealthmanagement.com/ca/en/research-insights/gaining-perspective-on-women-in-wealth-transfer-and-overall-wealth-planning/detail/.
Too often, this lack of knowledge and confidence means that in a male/female relationship, investment, wealth and estate planning falls to the male, with the female less involved. And that’s problematic. With high marital breakdown rates and a longer female lifespan, 90% of women will be solely responsible for their finances at some point in their life. And many women will inherit money twice – once from their parents and once from their spouse. Inheritances are major financial events that can involve a number of decisions and planning changes – and knowledge and good advice is critical.
A couple of changes are needed:
- Get involved – sooner not later. Women not currently active in long-term wealth planning for themselves and their families need to get involved. It’s their future, and, at some point, it’s likely to be a future on their own. Now is the time to get involved to ensure it’s a secure one.
- Get a financial advisor who truly meets your needs. Wealth advisors historically have not been good at catering to the advice and planning needs of women. Studies have shown that in the U.S., 70% of women change financial advisors after their spouse has died. In Canada, the number is 80%. Clearly, many women are not happy with the advice they’re getting. If you’re involved with your finances, and your current advisor is catering to your male partner and not to your concerns, don’t wait until there’s a death in the family to take action.
This article in the Globe and Mail spells out the issues well. It’s worth a read: https://www.theglobeandmail.com/globe-investor/investment-ideas/financial-advisers-have-trouble-talking-to-women/article22726458/.
Thank you for reading!