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Monday, October 19, 2020

Widow in four-year battle with Apple to get access to deceased husband's account

Most of you have heard of digital assets by now, though I suspect many readers still think they don't own any digital assets. If you have a Facebook or Instagram account, air miles, email, or passwords (not to mention the hardware on which those sites are accessed) then you own digital assets. I urge you to read a new story from CBC news that talks about Carol Ann Noble of Toronto by clicking here. 

Mrs. Noble's husband died four years ago. Despite the fact that Mrs. Noble is the executor of his estate and the sole beneficiary of his estate, she is still battling with Apple for access to an account that was in her husband's name. They are making it expensive and difficult for her - and for many others - to deal with assets that often have sentimental as well as financial value.

One of the biggest problems is that corporations such as Facebook, Apple, and Google, are American and are therefore not bound by our rules of claiming estate assets. There are other complications of course, such as privacy laws and the fine print of the "terms and conditions" we all click on when we open online accounts.

This isn't going to go away any time soon. There is a lot that has to be done for the law and procedures to catch up with changing technology. But there are some things you can do to reduce the chances of you or your family getting caught up in one of these protracted legal battles, such as:

1. In your will, give your executor the specific power to deal with digital assets. Make sure it covers everything from stored photos to email. Also ensure that it gives the power to do anything from delete to take over the accounts/assets.

2. Also ensure your Enduring Power of Attorney contains a similar provision.

3. Record your passwords where your spouse or executor can find them. Your will is not the place to do this, since some places will require you to change your passwords from time to time and you don't want to keep changing your will. Just use something simple from a yellow post-it note to a spiral-bound notebook. Keep your household situation in mind, as you do not want to make your passwords readily available if several people use or have access to your computer. Use your best judgment about where to keep your passwords. One of the places you can record these is in our planning workbook called "For My Family With Love." Click on the title to see/purchase one. 

Saturday, October 17, 2020

Telling off those not-so-loved-ones in your will

Wills do have a lighter side. In this recent blog post, Peter Meitanis of wrote about using your will to tell off or insult people who are... well, not your loved ones. Click here to read this entertaining post about airing your grievances in your will.

This method of getting the last word is not done often in modern wills. We tend to concentrate on making wills that are legally valid, clear, and comprehensive. We avoid adding extraneous material that could end up being inflammatory. But that doesn't take away the amusement I feel when reading some of the unique last words found in Mr. Meitanis' article. Enjoy.

Tuesday, September 29, 2020

Don't draft wills for clients if THIS seems like a good idea to you

I'm really ticked off. Last week a client came to see me for a second opinion on her will, which had been drawn for her by a lawyer here in town. 

The client has several children, one of whom is a disabled adult who will always need someone to manage money for them. The lawyer prepared a will in which nothing was left to the disabled child ("A"), but the share that would have gone to A was instead to be paid to another one of the children ("B"). There would be a verbal agreement that B would take care of A, but nothing in writing. The client was told by the lawyer that there was no other way to deal with the disabled child's share.

The client signed the will but thought that it "didn't feel right". She talked to friends and did some research, and suspected that there were other things that could be done for her disabled child. And of course she is right. There are plenty of other things that can be done. The method chosen by the lawyer who drew the will was one of the worst choices available. It leaves A in very vulnerable position. Imagine, for example, that B passed away and his estate passed to his wife. There goes A's inheritance. With no written agreement in place, there is nothing for A to rely on to recover anything.

The reason I'm ticked off is that the lawyer who drew this will has been around long enough to know better. He advertises his will-drafting services and presumably draws up plenty of wills. He should not tell the parents of disabled adults that there is "no other way" to protect their children's inheritance. We've all run into clients who think that legal solutions such as trusts are too complicated and refuse to work with them, but this client wasn't one of those. To the lawyers and law students reading this post, if you think the solution advised by this lawyer in this case is a good idea, you need to stop drafting wills today. Right now. 

I have prepared a new will for this client using a combination of two trusts. She will put the first $100,000 into an Income Support Trust (unique to Newfoundland and Labrador, specifically created to avoid cutting a beneficiary off provincial benefits) and the balance into a Henson-style trust. The client has now created safe trusts for her child and has created legal rights for A that will endure even if child B passes away.

I'm proud of the client for seeking a second opinion. Many consumers don't do that even when their gut tells them things don't seem right.

Friday, September 25, 2020

Contract to name someone as residual beneficiary upheld by BC court

The Supreme Court in BC has given us another really interesting decision. In this one, known as Munro v. James, there was a contract in which one party agreed to name the other as a beneficiary of her estate, then didn't do so.

The Plaintiffs were Fonda Munro and Bruce Boughy. They made a contract with the Defendant, Jessie James. The terms of the contract were that Munro and Boughy would live on James' farm, manage it, look after the animals, etc. and in exchange, James (who was 85 years old at the time) would give them her entire estate in her will. There were other terms as well, such as the requirement that the Plaintiffs pay the sum of $100,000 to James upon the sale of their previous home and farm, which they did. Munro and Boughy moved to the James property and took up the tasks involved in managing the farm.

Eleven years later, James changed her mind about the contract. She said she was unhappy with the Plaintiffs' management of her farm. She notified them that she was naming someone else as her beneficiary and gave them 3 months notice that she was terminating the contract. She changed her will, naming a friend, Leslie Brown, as the beneficiary. The Plaintiffs then took James to court, relying on the contract.

The court said that James had breached the contract, and that since the Plaintiffs had substantially performed their side of the contract, James must do the same. Because James had said she was not happy with the quality of the Plaintiffs' management, the court made a thorough, careful examination of that issue, and concluded that they had held up their end of the deal. 

Then the court turned its attention to what would be an appropriate outcome for the situation. In the vast majority of cases, a breach of contract will result in the damaged party getting money from the other party. Occasionally, however, a court will order what is known as specific performance. This basically means that the court will order the party who breached the contract to do the thing that he had contracted to do. In cases where someone has made a contract to name someone as a beneficiary in a will, the court usually orders specific performance. 

The court in this case ordered that the Plaintiffs would be entitled to the whole estate (after payment of bills, taxes, etc). The court also ordered that James could not place a mortgage or other encumbrance against the property without the Plaintiffs' agreement.

It's pretty unusual for anyone to make a contract to name someone as their beneficiary, but it does happen from time to time. This case shows that this type of contract is enforceable, even while the testator is still alive.

I added my wife to the title of a property I paid for. Can I remove her name from the title?

Today I want to talk about a topic that is raised in a question asked by a reader. It's something I've talked about before and will no doubt talk about again. That is, when you add a name to a title, you have given legal ownership rights to that person. Here is the reader's (abridged) question and my reply.

I bought a house and put my wife's name as joint ownership. I am paying the mortgage since then and she has not payed a single mortgage. She is working since last 8 years with very good pay. She told me the other day I should leave the house and move out. I take care of all the expenses I mean literally all at home including our child university expense, property, taxes, gas, hydro, groceries etc.. The only expense she pays is her car fuel expense, her clothing. I now worry that she will take my hard earned house away from me. There is 8 years of mortgage left. I want to remove her from the property title. 

The basic problem here is that you are referring to the house as "your" house when you and your wife both own it. In terms of legal ownership, her rights are the same as yours. Unfortunately, you cannot simply "remove her from the property title" because she is an owner just like you.

Here is the basic message: if you add a name to a title, you are giving that person legal rights. You can no longer behave as if the property is only yours, because it isn't. This is the case whether the person you add is a spouse, one of your kids, or someone else. Who has paid for what does not show up on a title deed.

This doesn't mean that the amounts you have paid for the mortgage and other expenses are not relevant. Though they don't affect the title itself, they may be relevant to a division of assets, if it comes to that. I mention this because you said she wants you to move out, which sounds as if your relationship may be coming to an end.  If that is the case, the two of you will have to negotiate the division of your home and finances. 

It's possible that you could lose the house in that negotiation. It's also possible that your wife will agree to have her name taken off the title in exchange for other assets.

I'm not prepared to speculate as to who would "win" the house in your case, but ideally you and she will try to come to an agreement that is fair. In my mind, you paying all of the expenses for all of those years should be considered when agreeing on what is fair. In law, we have a concept called unjust enrichment, in which one party unfairly benefits from the efforts or payments of another. The existence of this concept gives you a basis to look for fairness in a division of assets.

There are other factors that might come into play, but they are related to family law and I'm not going to address them here. Your question was about removing your wife from the title, I think you can see now that you can't do that without her consent, which may not be easy to get.

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