In a prior blog by Paul Trudelle, a partner at Hull & Hull LLP, he explained the decision of Rooney Estate v. Stewart Estate (2007). In Rooney Estate v. Stewart Estate, the court highlighted some of the roles the Estate Trustee and the estate solicitor and held responsible for including, among other things, arranging for the funeral and disposition of remains.
Arranging for the funeral and disposition of remains can be burdensome, especially if the estate trustee was related to the Deceased. This task becomes even more daunting when they are dealing with the expenses of a funeral in which case, fewer are in the mood to bargain. Regrettably, this leads many spending more then they have to.
I recently came across an interesting article, How to Cut Funeral Costs, which was published in The Wall Street Journal. Under this article, the author provides us with a few tips on how to keep costs reasonable when arranging a funeral service:
1. Learn your Rights: Funeral homes are prohibited from charging certain fees, and there may be a requirement that compels funeral homes to provide a written fee list upon request
2. Pre-plan: “Have a conversation with your family about what you want and what’s going to be meaningful to them.”
3. Consider pre-owned plots: Purchasing a pre-owned plot has always been a common practice; but the purchaser has moved out of the area where his plot is purchased.
4. Compare Funeral Home Prices: it’s worthwhile to shop around. Prices vary from one home to another
Thank you for reading,
Rick Bickhram – Click here for more information on Rick Bickhram.
One final note of caution arises from the Rooney (2007), CarswellOnt 6560 decision – a decision of the Ontario Superior Court of Justice that I have referred to in my blogs earlier this week. This caution refers to the release that the Estate Trustee seeks from the beneficiaries.
In Rooney, the beneficiary was provided with a form of accounts, and was told that if she signed a release, she could receive a distribution from the estate. (The court was critical of this practice.) The beneficiary did so.
Later, the beneficiary sought to compel a passing of accounts. The court allowed the Application.
The trustee had asserted that because of the release, the beneficiary could not compel a passing. The court stated “It is not an answer to say that the beneficiary approved of the accounts and gave a release. One of the obligations of the solicitor acting for the trustee is to ensure that all beneficiaries have competent, independent advice in reviewing the accounts. There is no suggestion by the solicitor that he advised the [beneficiary] to obtain independent legal advice when reviewing the trustee’s accounts which he had prepared.”
Additionally, the court noted that the account rendered by the solicitor to the estate was a blended account, and included both solicitor’s work and trustee work. “The solicitor was in the best position to know what charges related to which services. He was also in the best position to know what portions of his fee account should be paid by the trustee out of her compensation or by the estate. There is no evidence that he gave any advice about these distinctions to the beneficiary so that she could consider them.”
The court concluded by stating that “There is no evidence that the beneficiary executed the release knowing that double charges for the trustee’s work had been made against the estate. There is no evidence that the beneficiary knew the solicitor charged the estate more for legal and trustee’s services than would arguably be allowed on quantum meruit basis. In these circumstances, the release was not a fully informed one; it cannot be enforced against the beneficiary.”
What is an Estate Trustee to do to protect himself or herself? The Estate Trustee might send out accounts that are as complete and informative as possible, so that the release can truly said to be an informed one. Solicitor’s accounts might be included, and these accounts could specify the nature of the services provided. Beneficiaries should be advised to obtain independent legal advice.
In many cases, an Estate Trustee may wish to obtain a court passing in any event.
Thanks for reading.
Yesterday, I referred to the Ontario Superior Court decision of Rooney Estate v. Stewart Estate (2007), CarswellOnt 6560, which addressed the distinction between the role of the Estate Trustee and the role of the estate solicitor.
One of the responsibilities of the Estate Trustee is to prepare a set of accounts for the approval of the beneficiaries or the court, as may be required.
The decision expands on this requirement. Citing an article prepared by Rodney Hull, Q.C. (“Fundamental Principles and Concepts Relating to Executors and Trustees’ Accounts” (1983), Estates and Trusts Quarterly 146), the duty of an Estate Trustee in keeping accounts is said to include the duty:
1. To keep clear and accurate accounts of the estate, rendered at appropriate intervals to the beneficiaries;
2. To keep the accounts distinct from other accounts;
3. To retain supporting documents for all accounts;
4. To produce to any beneficiary the accounts when requested. Income or revenue beneficiaries are entitled to have accounts at reasonable intervals; accounts must be presented to residuary beneficiaries when entitled to possession;
5. To make all beneficiaries fully aware of their rights;
6. To disclose any and all breaches of trust;
7. To allow all beneficiaries adequate time to investigate the accounts;
8. To ensure that all beneficiaries have competent, independent advice in reviewing the accounts; and
9. To notify all interested beneficiaries of any court audit.
In Rooney, the court held that a release signed by a beneficiary was not a bar to compelling a passing of accounts. The beneficiary was not advised to obtain independent legal advice when reviewing the trustee’s accounts, and the accounts did not disclose that there were double charges for the trustee’s work made against the estate, or that the solicitor charged more for legal and trustee’s services than would arguably be allowed on a quantum meruit basis. As such, there was a breach of one of the obligations associated with keeping accounts. Furthermore, the release was not a fully informed one. Accordingly, it was not enforceable as against the beneficiary.
Thank you for reading.
The recent case of Rooney Estate v. Stewart Estate (2007), CarswellOnt 6560 serves to highlight the “distinct but complimentary” roles of the Estate Trustee and the estate solicitor. There, the court noted the responsibilities of each.
The court held that the Estate Trustee is responsible for:
1. arranging for the funeral and disposition of remains;
2. locating the will and instructing the solicitor to apply for the appropriate grant of appointment;
3. locating all the assets of the estate, including making arrangements to secure, preserve, and dispose of such assets in accordance with the terms of the will;
4. advertising for creditors and paying all debts of the estate including the filing of appropriate tax returns;
5. preparing a set of accounts for the approval of the beneficiaries or the court, as is required; and
6. distributing the estate.
The court noted that, generally, the role of the solicitor is to apply for a certificate of appointment for the trustee and to attend upon a passing of accounts. The Estate Trustee is entitled to pay these legal expenses out of the Estate.
The Estate Trustee can claim compensation for carrying out his or her duties. That compensation may also include reimbursement for professional help. However, the Estate Trustee cannot claim compensation for services provided by others whose services are charged to the estate.
Problems can arise where the solicitor performs work that falls within the Estate Trustee’s responsibilities. While this is permissible, the court will ensure that the estate is not being doubly charged. Further, the court will not normally allow a solicitor to charge solicitor’s rates for trustee work.
In the decision, the court cautions that the “solicitor should not perform trustee’s work unless instructed to do so by the trustee. If such a request is made, the solicitor should advise the trustee that he will render an account to the trustee personally for doing her work. Generally, the estate is not liable to pay this account; rather, it falls to the trustee to pay out of her compensation.”
Thanks for reading.