Monday, January 26, 2015

To litigate or to mediate?

It's no surprise to any of us that estates can be minefields of disputes, upsets, and resentments. The usual way of resolving an estate dispute is to take someone to court and let the judge decide who wins and who loses. But those of you who have thought that there simply must be a better way of dealing with these disagreements are right; there is an alternative. That alternative is mediation.

Mediation is not particularly familiar to most people, since most of us have never had any reason to go through it, but there are good reasons for almost everyone caught up in an estate fight to consider mediating rather than litigating. Not all issues can be resolved this way, but if the people involved really want to settle an issue without fighting, mediation may be a good solution.

Toronto lawyer Ian Hull is a leader in the area of wills and estates law. Mr. Hull has recently posted on his blog, the Toronto Estate Law Blog, discussing the benefits of using mediation to resolve estate issues. Click here to read the article. I hope that knowing a bit more about mediation will prompt at least some of you to look into using that method of dispute resolution.

Sunday, January 25, 2015

Movies about older adults active in the dying process

As regular readers of this blog know, I encourage families to talk to each other about the tough topics that are part of estate planning. This is a lot easier when there is nobody in the family in immediate danger of passing away, but unfortunately an awful lot of people don't act (or speak) until there is a pressing need.

I recently found a post by Karen D. Austin, who blogs at The Generation Above Me, that I thought really needed to be shared. Ms. Austin has made a list (with clips) of films that feature older adults who are actively involved in the dying process. I haven't seen all of these films myself, but I plan to see as many as I can. They are works of fiction, not documentaries, and to my mind that is the perfect way to illustrate the emotions, twists of fate, and attitudes that come up when someone is nearing the end of his or her life.

As Ms. Austin says, "These works might help viewers prepare for the death of a parent, a spouse or another loved one." Perhaps they would work as a springboard into a conversation you need to have with someone while you still have the chance.

To see the list, please click here. It was originally posted in 2012 but was updated in December, 2014.

If anyone has seen any of the films mentioned on the list and would like to leave a comment about it for the rest of us, please go ahead.

My uncle hasn't contacted family for 20 years. Can he contest being left out of my grandmother's will?

Nothing illuminates a family estrangement like the death of a parent. Does a person who hasn't contacted his family for twenty years have a right to be included in his parent's will? A reader recently wrote to me about this. Her question and my answer are below:

"My grandmother's will was made up in 2013 and notarized when my grandmother was mentally stable. The entire estate goes to my mother, and 5 thousand to each of the grandchildren. My mother's brother is not in the will, he never attended any family events for the last 23 years. He also did not show up to my grandfather's funeral or visit him in the hospital before he died. My grandmother is dying and will not live long... a matter of days. My mother is giving me my grandmother's condo after all is settled with the funeral and further arrangements. Should I be worried about my mother's brother who will for sure try to claim money, even though he is not in the legal will, and has not even seen the family in over 20 years?"

The first thing I have to say about this situation is that when a family member doesn't see his parents or siblings for years, the separation doesn't affect his legal rights nearly as much as people want it to. Yes, it may feel unfair to share an inheritance with someone who doesn't appear to be affectionate, or loyal, or caring. But legal rights are not about how things feel to other people, so let's talk about various rights and obligations in a legal, not an emotional, context.

If your uncle is going to make a challenge to this situation, he will have to do so at the time the will is sent to the court for probate. If the will goes through the courts unchallenged, and your mother inherits the bulk of the estate, she can do what she wants with it. She can give parts of it to you if she wants to. Your uncle certainly has no claim on what your mother owns or what she does with it.

So, let's examine the possibility of your uncle challenging the will at the time of probate. You said that your grandmother had mental capacity to make a will. This may be where the challenge comes from. It's pretty common for a child of the deceased to claim that he was only left out because the other child trash-talked him to the parent and convinced or forced the parent to leave him out of the will. This is called undue influence, and it's effective when a senior is weakened or ill.

If this is where your uncle chooses to make a challenge, I think he will find it extremely difficult to succeed. The fact that he hasn't been around for years will work against him, as he will have no personal knowledge of whether or not your grandmother had testamentary capacity, or of the relationship between your  mother and your grandmother. Your brother would have to rely on evidence from other parties, such as your grandmother's doctor, in the hopes of finding that she was debilitated by dementia, prescription drugs, illness, or some other factor that weakened her.

If the lawyer who drew up the will did a decent job, he or she would have made careful notes in the file about your grandmother's ability to understand what she was signing (yet another reason that home-made wills are easier to challenge),  When I've made wills for seniors who anticipate that one of their kids is going to be unhappy with the will, I've sometimes enlisted the help of the senior's family doctor by getting a doctor's letter backing up my assessment that the senior had all of his or her faculties when the will was done. Your grandmother's lawyer may have done something similar.

Additionally, the will was not made on your grandmother's deathbed but was made more than a year ago, which suggests that if she didn't like the arrangement she had made, she could have changed it.

Assuming that your grandmother did have the proper mental capacity when the will was done, she has the right to dispose of her estate as she sees fit, within certain parameters. She is not allowed to ignore anyone who is financially dependent on her. This generally includes a spouse, a minor child, or an adult child with a handicap that prevents him from earning a living. Obviously your uncle doesn't fall into the first two categories. Nothing you've said would suggest that he falls into the third category either, particularly since it would be hard to show you're financially dependent on someone with whom you've had no contact for twenty years.

Therefore, your uncle would also have a pretty impossible time claiming that he is automatically entitled to a share of your grandmother's estate. The exception to this rule exists in British Columbia, where an adult child left out of a will can contest the will on fairness grounds.

I can't say for sure that your uncle won't try to launch a lawsuit to challenge the will, though it seems to me he doesn't have much of a chance. However, any estate fight is an expensive, ugly, upsetting test of endurance, even when you win. I might suggest that if he is determined to get something, your mother might consider going to mediation with him to work something out. It would probably be cheaper for her in the long run, not to mention less upsetting and less time-consuming.

Wednesday, January 21, 2015

Top Ten Reasons Why Estate Planning Should Top Your New Year's Resolutions

Did you make any New Year's Resolutions this year? If you're one of the millions of people who like to get organized and set priorities at the beginning of each new year, take a look at this article by Ontario lawyer Donna Neff. She gives ten good reasons why estate planning should be on your list of must-do plans for this year.

Thursday, January 15, 2015

Where does probate take place if you live in one province but have assets in another?

If you live in one province but have assets in another province, where does the probate of your will take place? A reader recently asked me about this, as you'll see below.

"I have accounts in Alberta but I live in British Columbia. Since the bulk of my assets are in Alberta, does my will get probated there, or does it have to be probated where I live?"

This is an excellent question, given the difference in court fees charged by these two provinces. It is much less expensive to probate a will in Alberta than in BC. For example, the probate fee on an estate worth $500,000 would be $7,200 in BC and only $400 in Alberta. Many Canadians move valuable assets to Alberta to take advantage of the lower probate fees.

The general rule is that a will is probated (assuming it is in need of probate at all) in the province or territory in which the deceased ordinarily lived. Keep in mind though that a probate order granted in BC only covers the assets you own in BC. According to what you've told me, this will mean the BC order will cover your home and other assets in that province, but not your assets in Alberta. Your estate will pay BC probate fees only on the assets listed on your BC application for probate.

To deal with your Alberta assets, your executor will have to apply for a separate court order in Alberta, after he obtains the BC order. This is called a re-sealing of probate. While it is not quite starting over from scratch, the paperwork is very similar in scope to the BC paperwork. Though he may attempt to do this on his own, your executor would probably hire an Alberta lawyer to handle the application. Your estate will pay Alberta probate fees on the assets in Alberta.

I take it that you haven't talked through your estate plan with a lawyer local to you, but it would probably be a good idea. You may hear ideas that will save your estate taxes, expenses, and time.

This arrangement is not unique to BC and Alberta. Re-sealing is required between all provinces and territories.

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