Tag: will

12 Jul

When is a Matter Truly Urgent?

Rebecca Kennedy Litigation Tags: , , , , , , , , , , , 0 Comments

During the COVID-19 pandemic, our Courts have unfortunately, but necessarily, been impacted. As a result, the Courts have, at times, had to restrict the matters that may be heard to only those that are urgent, as defined by the Notices to the Profession that have been published by the Court. For instance, the Consolidated Notice to the Profession, Litigants, Accused Persons, Public and the Media lists a number of matters that are to be considered urgent. With respect to civil and commercial list matters, this includes “urgent and time-sensitive motions and applications in civil and commercial list matters, where immediate and significant financial repercussions may result if there is no judicial hearing.” Discretion is also granted to allow the Court to decline to hear any particular matter described in the Notice as being urgent, if appropriate, or to allow a hearing that the Court deems necessary and appropriate to be heard on an urgent basis.

Despite the Notices from the Court, there may still be confusion amongst parties as to whether their matter qualifies as “urgent” or not. As The Honourable Justice Myers stated in the recent decision of Nicholas v. Ogniewicz, 2021 ONSC 4442, “Self-induced urgency is not ‘urgent’.”

In Nicholas v Ogniewicz, the issue was that there had been an agreement of purchase and sale with respect to real property, which provided that the purchaser would submit requisitions two weeks prior to closing. Unfortunately, the requisitions submitted by the purchaser were extensive, and as noted in the decision, it was apparent that several of the requisitions could not be physically accomplished before the closing date.

A week after the requisitions were received, the vendor asked for an urgent hearing date, pursuant to the Notice to Profession – Toronto, Toronto Expansion Protocol for Court Hearings during Covid-19 Pandemic, to resolve the validity of the requisitions.

Justice Myers described the current state of the civil list in Toronto as follows:

The civil list in Toronto is building a backlog of motion and application hearings. It is currently suffering unacceptably long timeouts for civil motions and applications due to the effects of the pandemic and a lack of resources. Truly urgent matters are being heard on an urgent basis. But no judge is sitting around waiting for them to come in. They are heard at a cost to other cases waiting in the queue or to case conferences that the judge may have to defer, or to parties waiting for the release of the judge’s reserved decisions that the judge was writing in her non-sitting time.

In the court’s view, in this particular case the time-sensitivity present was self-induced by both sides. It was also noted that no one was at risk of physical injury, the property was not about to suffer irremediable waste, no confidential information was at risk of disclosure or misuse, and no business was at risk of imminent failure or irreparable harm unless misconduct is urgently prevented. Ultimately, the court determined that the matter was not urgent as set out in the Notice to the Profession, and there was no basis for it to jump the queue.

Although there may be a light at the end of the pandemic tunnel, we must all still be mindful of the long-lasting consequences, including the heavy backlog that continues to exist, and will likely continue to exist for some time, in our courts.

Thanks for reading,

Rebecca Rauws

 

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15 Jun

Vacation Wills – Can you admit a foreign Will to probate in Ontario?

Stuart Clark Estate Planning Tags: , , , , , , , , , , , 0 Comments

Remember travel? Remember getting on an airplane and going somewhere (anywhere) else? Although you would be forgiven for thinking of these activities as science fiction due to recent world events, with the COVID-19 pandemic hopefully on its downward trend the idea of travel could again be creeping back into the collective consciousness.

Although the more common souvenirs to bring back from a vacation are likely a sunburn and some tacky items with the name of the destination emblazoned across it, as this is an estate blog it got me thinking of whether there may be any estate related souvenirs that you could bring back. Could you, for example, sign a new Last Will and Testament while on vacation, potentially adding a Will with an exotic destination name at the top to the list of items you bring back? Could such a Will later be admitted to probate in Ontario? Like any good legal question the answer is “maybe”.

In Ontario the potential admittance of a foreign Last Will and Testament is governed by section 37(1) of the Succession Law Reform Act, which provides:

“As regards the manner and formalities of making a will of an interest in movables or in land, a will is valid and admissible to probate if at the time of its making it complied with the internal law of the place where,

(a) the will was made;

(b) the testator was then domiciled;

(c) the testator then had his or her habitual residence; or

(d) the testator then was a national if there was in that place one body of law governing the wills of nationals.” [emphasis added]

In accordance section 37(1)(a) of the Succession Law Reform Act, a foreign Will can be admitted for probate in Ontario so long as it complied with the internal law of the place where it was made at the time it was signed. As you would presumably be presently located in the destination on which you were on vacation, so long as the Will complied with the laws of the jurisdiction where you were on vacation at the time it was signed it could theoretically later be admitted to probate in Ontario making your vacation Will a valid Will in Ontario.

In considering your potential vacation Will it would be wise to remember that just because you “can” do something doesn’t mean you “should”, with a vacation Will likely being in the same category as a vacation tattoo as something that should be very seriously considered and thought through before it is done.

Thank you for reading.

Stuart Clark

24 Mar

Pour Over Clauses – Facts of Independent Significance

Stuart Clark Estate Planning Tags: , , , , , , , , , 0 Comments

Yesterday I blogged about the general use and availability of “pour over clauses” and whether you can leave a bequest in a Will to an already existing inter vivos trust. Although the answer to that question is “it depends”, as cases such as Quinn Estate v. Rydland, 2019 BCCA 91, have shown the court is generally reluctant to uphold these kinds of bequests due to the potential of amendments being possible in a way that contradicts statutory requirements, such that any individual considering a potential bequest to an already existing trust should proceed with extreme caution.

In ultimately refusing to uphold the bequest to the inter vivos trust in Quinn Estate the court provides an excellent summary of the typical arguments that are used to try to uphold “pour over clauses”, and why, in their opinion, they should not be available to save the bequest. One of these potential arguments is the doctrine of “facts of independent significance”.

The doctrine of “facts of independent significance” in effect provides that subsequent and independent facts of “significance” can have an effect on the interpretation and/or administration of Wills notwithstanding that such subsequent facts may not otherwise meet the formal requirements to amend or alter a Will. Examples that are often cited to are clauses such as those that would provide that property is to be divided “amongst my partners who shall be in co-partnership with me at the time of my decease” or to the “servants in my employ at my death“. As both of these classes of individuals can change after the Will has been executed, such that the individuals who may ultimately receive the gifts may be different at the time of death versus when the Will was executed, this can be seen as a potential exception to the general rule that the Deceased’s intentions must be clear at the time the Will was executed and cannot be altered unless in compliance with the strict statutory requirements.

In the case of pour over clauses, the potential argument to utilize the doctrine of facts of independent significance would appear to be that as the court allows certain bequests to be upheld notwithstanding that the circumstances surrounding the bequest could change after the fact, the potential of an inter vivos trust being varied after the signing of the Will should not automatically void the bequest.

The court in Quinn Estate ultimately rejected the potential use of the doctrine of “facts of independent significance” to save pour over clauses. In coming to such a decision the Court of Appeal notes:

Applying the doctrine to validate a pour-over clause would also differ in character to the existing applications recognized in the Anglo-Canadian jurisprudence. The traditional applications of the doctrine validate de facto amendments to the will only with regard to limited “facts”. The terms “partner” and “car” are inherently limited. A trust document recognizes no such limit. Extending the doctrine to pour-over clauses would grant testators unlimited power to amend the disposition of their estate without following the strictures of WESA. In my view, this is not an extension the common law should permit.” [emphasis added]

Although the Quinn Estate decision was a decision of the British Columbia Court of Appeal, as the Ontario statutory regime also does not appear to specifically contemplate the use and availability of “pour over clauses” it is likely that the same concerns referenced by the British Columbia Court of Appeal would be present in any attempt to uphold the use of pour over clauses under the doctrine of facts of independent significance in Ontario.

I will blog tomorrow about the concept of “incorporation by reference” as it relates to pour over clauses. Thank you for reading.

Stuart Clark

23 Mar

Pour Over Clauses – Can a Will leave a bequest to an already existing trust?

Stuart Clark Estate Planning Tags: , , , , , , , , , , , , 0 Comments

Trusts are generally divided into two categories; “inter vivos” or “testamentary” trusts. Inter vivos trusts are broadly defined as trusts that are established by a settlor while they are still alive, typically pursuant to a deed of trust, while testamentary trusts are established in the terms of a Will or Codicil. Generally speaking there is no overlap between an individual’s Will and any inter vivos trust, with any inter vivos trust existing separate and apart from the settlor’s “estate”. But does this have to be the case? Could you theoretically, for example, leave a bequest in a Will to an inter vivos trust that you previously established, thereby potentially increasing the assets governed by the trust upon your death, or must a trust which governs estate assets be a “testamentary trust” established by the Will? The short answer is “it depends”, although any individual considering such a bequest should proceed with extreme caution.

A clause in a Will that provides for the potential distribution of estate assets to a separate inter vivos trust is often referred to as a “pour over” clause, insofar as the assets of the estate are said to “pour over” into the separate trust. The availability and use of “pour over” clauses in Ontario is somewhat problematic.

The fundamental issue with the use of “pour over” clauses that allow a bequest to be made to a trust is that the formalities that are required to make or amend a trust are much lower than the formalities that are required to establish a Will, with trusts often containing provisions that will allow for their unilateral amendment or revocation after their establishments. The statutes which establish the parameters that are required for a Will to be valid are very strict, with a Will only being able to be later amended or altered if it too meets very strict criteria. The potential concern in allowing a distribution from a Will to a separate trust that can easily be amended after the execution of the Will is that it could create the scenario in which an estate plan could be altered after the Will was signed in a way that would not meet the strict formal requirements that would otherwise be required for a Will to be altered or amended.

In Ontario the formalities required for a Will to be valid is established by section 4(1) of the Succession Law Reform Act. A Will that has been signed in accordance with the formal requirements of section 4(1) can only be altered or amended by a Codicil that itself has been signed in accordance with the formal requirements of section 4(1), or if the alterations to the Will meet the requirements of section 18 of the Succession Law Reform Act. Unlike alterations and/or amendments to a Will, an alteration or amendment to a trust does not need to meet any formal statutory requirements for it to be valid, with the only requirements being those stipulated in the trust document itself and/or under the rules in Saunders v. Vautier. As a result, an inter vivos trust to which a bequest was directed using a “pour over” clause could theoretically be changed numerous times after the signing of the Will either with or without the involvement of the testator, thereby bringing into question whether the bequest actually represents the deceased’s testamentary intentions at the time the Will was signed.

In Quinn Estate v. Rydland, 2019 BCCA 91, the British Columbia Court of Appeal upheld the lower British Columbia Supreme Court decision, 2018 BCSC 365, which found that a “pour over” clause which purported to distribute certain estate assets to a trust that was settled by the Deceased during his lifetime was inoperable, with the funds that were to be distributed to the trust instead being distributed on an intestacy. In coming to such a decision the court appears to place great emphasis on the fact the trust in question could be amended unilaterally after the fact and in fact was amended in such a fashion after the execution of the Will.

The court in Quinn Estate provides an excellent summary of the considerations to make when determining whether a “pour over” clause can be upheld, including the concepts of “facts of independent significance” and “incorporation by reference”. I will discuss the concepts of “facts of independent significance” and “incorporation by reference” as they relate to pour over clauses in my remaining blogs this week.

Thank you for reading.

Stuart Clark

02 Feb

When will a Beneficiary’s Interest in an Estate Asset be Void for Uncertainty?

Rebecca Kennedy Estate Litigation Tags: , , , , , , , , , , , 0 Comments

Something that surely no testator or beneficiary wants to see is the failure of a gift made in a Will. Unfortunately, circumstances can arise where the language of a Will may be ambiguous, or where events occurring during the estate administration expose uncertainty in a term of the Will that wasn’t necessarily apparent at the time of drafting or execution.

In Barsoski v Wesley, 2020 ONSC 7407, the estate trustee sought directions from the court regarding a clause in the deceased’s Will that allowed the deceased’s friend (the “Respondent”) to live in the deceased’s home during his lifetime, or such shorter period as the Respondent desires. Upon the earlier of the Respondent advising that he no longer wished to live in the home, or the Respondent “no longer living” in the home, the house and its contents are to be sold, and the proceeds added to a gift to another beneficiary of the Deceased’s Will, a charity, St. Stephens House of London (“St. Stephens”).

The deceased died in June 2017. Confusion arose when it became apparent that the Respondent was not actually living in the home on a full-time basis. This first came up around December 2017 and continued for a couple of years. The home was in London, but the Respondent continued living and working full-time in Toronto following the deceased’s death, and seemingly up until 2019. He then started a full-time job in Sault Ste. Marie in 2019.

The Respondent’s evidence was that he was using the home as his primary residence in that he spent time at the home on weekends 1-2 times per month, and used it as his address for his driver’s license and for CRA purposes. He stated that he planned to live in the home full-time after he retired around July 2021.

St. Stephens, as the gift-over beneficiary of the home, took the position that the Respondent had not been living in the home, and therefore it should be sold pursuant to the terms of the Will.

The court first considered whether the Will gave the Respondent a life estate or a licence to use the home subject to a condition subsequent, concluding that the proper interpretation was that it was a licence with a condition subsequent. The condition subsequent in question was when the Respondent was “no longer living” in the home. The court outlined that a “condition subsequent is void for uncertainty if the condition is ‘far too indefinite and uncertain to enable the Court to say what it was that the testator meant should be the event on which the estate was to determine’”. Accordingly, the court concluded that it was impossible to define, on the terms of the deceased’s Will, what it meant to “live” in the home.

The question of whether, on the facts, the Respondent’s use of the home constituted him “living” there is an interesting one. However, due to the court’s conclusion that the terms granting the Respondent an interest in the home were void for uncertainty, it was unnecessary for the court to make any findings of fact on this particular question.

The estate trustee, who was also the drafting lawyer, gave evidence (that was ultimately inadmissible) that the deceased had been considering some changes to her Will prior to her death. The changes would put time restrictions on the Respondent’s use of the home, including that he would be required to move into the home within 90 days of her death, and not be absent from it for more than 120 days. These additional terms may have provided sufficient certainty for the beneficiary to know what he had to do in order to maintain his interest in the home, and for the estate trustee to administer the estate. Although this evidence had no impact on the court’s decision, it can serve as an important reminder that if one wants to change their Will, one should do so as soon as possible to ensure the Will reflects their wishes at the time of their death.

Thanks for reading,

Rebecca Rauws

 

These other blog posts may also be of interest:

24 Sep

Corporations and Estates – What happens when a Will gifts an asset that is actually corporately owned?

Stuart Clark Estate Planning Tags: , , , , , , , , , , , , , , , , , 0 Comments

The use of privately held corporations to manage an individual’s assets or business interests seems to be an increasingly common strategy and tool. Although the use of privately held corporations offer a number of potential advantages to the individual both during their lifetime and as part of their estate planning, it does raise a number of novel issues for the administration of the estate which may not exist if these assets had been directly owned by the individual. Such potential issues manifested themselves before the Ontario Court of Appeal in the relatively recent decision of Trezzi v. Trezzi, 2019 ONCA 978, where the court was asked to determine the potential validity of a bequest in a Will of property that was not directly owned by the testator personally but rather owned by them through a wholly owned private corporation.

As privately held corporations are often wholly owned by a single individual owner the individual in question would be forgiven for thinking that any assets that are actually owned by the corporation are their own. Such a misconception could carry with it some significant legal issues however, as it ignores the important fact that at law the corporation and the individual owner are two distinctly separate legal entities, and that although the individual owner of the corporation can exercise almost absolute control over the corporation as the sole shareholder, and could through such control likely direct the corporation to take any action regarding any asset the corporation may own (subject to any obligations of the corporation), they do not personally “own” any asset that is in fact owned by the corporation. Such a distinction is potentially important to keep in mind when a person who owns assets through a private corporation is creating their estate plan, as they should be mindful of whether any specific asset which they wish to bequest is owned by them personally or through the corporation.

In Trezzi the testator left a bequest in their Will to one his children of all equipment and chattels that were owned by a construction company that was wholly owned by the testator. This bequest was challenged by certain of the residuary beneficiaries, who argued that as the equipment and chattels in question were not actually directly owned by the testator, but rather the corporation, the testator’s bequest of such items had failed and that the items in question should instead continue to form part of the corporation and be distributed in accordance with the residue clause to their potential benefit.

The Court of Appeal in Trezzi ultimately upheld the bequest in question; however, in doing so, noted that the language was potentially problematic and encouraged counsel to be more careful when drafting in similar circumstances (even including potential precedent language to follow from the Annotated Will program). In upholding the bequest the Court of Appeal was in effect required to do an interpretation application for the Will, noting that they placed themselves in the position of the testator and considered what his intention would have been when including the provision in question. The court ultimately concluded that it would have been the testator’s intention with such a provision that the executor was to wind up the corporation in question, with the assets being distributed to the beneficiary in question as part of such a process. In coming to such a conclusion the court states:

While it is true that Peter, as the sole shareholder of Trezzi Construction, did not directly own the corporation’s assets, that does not complete the analysis. In substance, Peter’s shares in Trezzi Construction became part of the estate, and Peter effectively directed his executors to wind-up the company and to distribute its assets in accordance with his will, even though he did not own those assets directly. As already noted, the key question thus boils down to whether this was indeed Peter’s subjective intention in his will…” [emphasis added]

Although cases like Trezzi show that under certain circumstances a bequest of assets which are not directly owned by the testator but rather through a corporation can be upheld such a result cannot be guaranteed, as the Court of Appeal in Trezzi was required to resort to the rules of construction and place themselves in the position of the testator to uphold the bequest in question. As a result, a testator would be wise to take extra care when dealing with an estate plan that includes the potential bequest of assets that are corporately owned to ensure that the ownership of such assets is properly described and the executor is provided with any necessary authority and direction to deal with the corporately held assets on behalf of the estate.

Thank you for reading.

Stuart Clark

15 Sep

Hull on Estates #597 – Pour Over Clauses

76admin Hull on Estate and Succession Planning, Hull on Estate and Succession Planning, Hull on Estates, Podcasts, Wills Tags: , , , , , 0 Comments

This week on Hull on Estates, Jonathon Kappy and Stuart Clark discuss Quinn Estate v. Rydland2019 BCCA 91, and the concept of “pour over clauses” more generally and whether you can leave a bequest in a Will to an already existing inter vivos trust.

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 Stuart Clark.

10 Sep

Substitute Decision-Making Disputes: The Best Interests of the Incapable is Key

Rebecca Kennedy Power of Attorney Tags: , , , , , , , , , , , 0 Comments

I have previously blogged about Vanier v Vanier, a decision of the Ontario Court of Appeal relating to a dispute amongst attorneys, in which the Court of Appeal agreed with a statement by the motion judge that the attorneys had “lost sight of the fact that it is [the incapable’s] best interests that must be served here, not their own pride, suspicions, authority or desires”. Unfortunately, it is often the case that in disputes amongst family members over the management of an incapable family member’s care or property, the incapable’s interests may be overshadowed by the fight amongst the other members of the family.

The recent Ontario Superior Court of Justice decision in Lockhart v Lockhart, 2020 ONSC 4667, appears to be another similar situation.

The applicant, Barbara, and the respondent, Robert, are children of Mrs. Lockhart. Mrs. Lockhart was 89 years old at the time of the decision. A number of years before, she had contracted bacterial meningitis and had suffered some long-lasting effects that impacted her cognition. Mrs. Lockhart’s husband predeceased her on October 2, 2018. Prior to his death, he had made personal care and treatment decisions for Mrs. Lockhart when she was not able to do so herself. After Mrs. Lockhart’s husband’s death, Barbara was unable to locate a power of attorney for personal care for Mrs. Lockhart; accordingly, Barbara and Robert proceeded to make personal care decisions on Mrs. Lockhart’s behalf, jointly.

However, in December 2018, Robert arranged to have Mrs. Lockhart sign a power of attorney for personal care and a power of attorney for property naming him as her sole attorney (the “2018 POAs”). Barbara was not aware of the 2018 POAs, and was not involved in their preparation or execution. Barbara did not even become aware of the 2018 POAs until April 2020 when Robert revealed them to her in the midst of a dispute between Barbara and Robert relating to Mrs. Lockhart’s care. Barbara subsequently challenged the validity of the 2018 POAs on the basis that, among other things, Mrs. Lockhart was not capable of granting them.

The court found that the 2018 POAs were of no force and effect, and were void ab initio. The court was also asked to determine which of Barbara and Robert would be authorized to make decisions on Mrs. Lockhart’s behalf under the Health Care Consent Act, 1996 (the “HCCA”). Each of Barbara and Robert took the position that they should have sole decision-making authority.

Notably, the court stated specifically that “[t]his dispute has less to do with Mrs. Lockhart’s interests and more to do with a power struggle between two siblings.” Given this outcome, and the facts leading to the litigation, I found the solution arrived at by the court interesting. The court determined that both Barbara and Robert are authorized to make personal care, health care, and treatment decisions under the HCCA, on behalf of Mrs. Lockhart, jointly. It appears that the court was satisfied that both of Barbara and Robert would exercise that authority in Mrs. Lockhart’s best interests, notwithstanding the dispute between them that lead to litigation. Other than the major disagreement between Barbara and Robert that lead to the litigation, the court found that “it appears that they have, in the main, come to decisions that have been in Mrs. Lockhart’s best interest and have kept her safe.” This historic ability to make joint decisions seems to have been sufficient for the court to decide that Barbara and Robert should continue doing so going forward.

Thanks for reading,

Rebecca Rauws

 

You may also enjoy these other blog posts:

08 Sep

Older Adults and Capacity to make Decisions: Protection vs. Autonomy

Rebecca Kennedy Elder Law Tags: , , , , , , , , , , , , , 0 Comments

As we age, many of us begin to experience the normal consequences of aging, including some memory loss. Unfortunately, many of us may end up suffering from Alzheimer’s and related dementias. As a result, capacity has become a bigger problem among seniors.

There are ways to manage decision-making for a senior who has lost capacity to make his or her own decisions about care or property. If the person executed a power of attorney, their attorney can step in. If there is no power of attorney, a guardian can be appointed by the court. However, the imposition of a substitute decision maker can be a significant restriction on an older adult’s liberty, and some seniors may resist that imposition.

An article in The Walrus earlier this year considered this issue, and the impact a finding of incapacity can have on a senior’s autonomy in Canada.

One of the concerns discussed in the article is that “some seniors find that, once declared incapable, they are unable to challenge the decision.” In Ontario, we have the Consent and Capacity Board, which is an independent tribunal that, among other things, reviews various determinations regarding an individual’s capacity. However, this is apparently a rarity in Canada. The only other similar body is located in the Yukon.

Another issue raised by the Walrus article is with the lack of a standardized system for assessing capacity. The person doing the assessment can vary (doctor, nurse, social worker, etc.), as well as the tests conducted. This is made even more complicated by the fact that there are differing levels of capacity for different tasks (e.g. making a Will, managing property, getting married, granting a power of attorney for personal care).

Unfortunately, the lack of attention paid to the issue of aging and capacity appears to be systemic. As cynically, but perhaps also realistically stated in the Walrus article: “It can seem like a great deal of attention is paid to other institutions that house vulnerable segments of the population, such as children in daycares. But there’s no future in aging; there is next to no potential that a senior might one day cure cancer or be the next prime minister. Reform in elder care may be desperately needed, but it hasn’t been forthcoming.”

There is a fine balance to be struck between restricting seniors’ autonomy, and protecting vulnerable people. A collaborative “supported decision-making model”, as discussed in the article may be one way of doing this. I hope that as more attention is drawn to these issues, there will be greater awareness, and increased progress and reform for our seniors.

Thanks for reading,

Rebecca Rauws

 

You may also enjoy these other blog posts:

23 Jun

Hull on Estates #592 – Dealing with the Body: Issues on an Intestacy

76admin Hull on Estate and Succession Planning, Hull on Estates, Hull on Estates, Uncategorized Tags: , , , , , 0 Comments

This week on Hull on Estates, Natalia Angelini and Doreen So discuss the estate administration issues surrounding the disposition of the body, where there is no will, in Re Timmerman Estate, 2020 ONSC 3424 (CanLII) and Re Timmerman Estate, 2020 ONSC 3425 (CanLII).

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 Doreen So.

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