Monday, July 27, 2015

Posting Notices to Creditors online rather than in the newspaper

Readers will notice that I've added a new item to this blog's homepage. It's a link to a site on which executors and estate administrators can publish Notices to Creditors and Claimants online, rather than in a newspaper. Click here to go to the site and see what it's all about.

This makes a lot of sense, really. Many people nowadays read their news online. Anyone searching for information about an estate or a deceased person would most likely search online. It's a way in which the legal system has to keep up with technology.

It's a Canadian site, so it's applicable to the readers of this blog. One of the first things you'll notice if you check out the site is that the cost of advertising there is significantly lower than using traditional newspapers. I suggest that executors and administrators who wanted to publish a notice but were deterred by the cost should compare the online price before deciding not to get the protection offered by publishing a notice.

Publishing a Notice to Creditors and Claimants is not required by law, but estate lawyers recommend publishing a notice in many cases. This is because publishing the notice protects the executor against unknown bills or claims popping up after the executor has distributed the estate.

The online notice published on this site will last for a year. On the site you can see notices that are already published. They are really easy to set up. I also happen to know that the owners/operators of the site are law school graduates and so have the knowledge they need to do these notices properly.

When I saw this new service being offered to Canadian executors, I knew it would be of interest to many of my readers, so I decided to post the link. As always, I'd love to hear your feedback if you decide to use the service.

Thursday, July 23, 2015

BC case shows what it takes to deal with title when kids have been added as joint to parents' property

There is a new case from the BC Supreme Court that sheds some light on a topic that is of consistent interest to the readers of this blog. I'm going to give a summary of the case here, but anyone who'd like to read the full case of The Estate of Walter Khadikin, please click here.

In this blog, I've talked many times about property that is put into joint names between a parent and a child. The question is always whether on the death of the parent, the child receives the property as a surviving joint owner, or the property becomes part of the parent's estate. It's a question that comes up all the time because people are continually being sucked into thinking that putting the kids' names on their property is a good estate planning move.

The issue of whether the child who was named as a joint owner could keep the property was addressed in the Khadikin case.

Mr. Khadikin was a widower with two children. His daughter, Elizabeth, had predeceased him. He put his home in joint names with his son, Ronald. When Mr. Khadikin passed away, Elizabeth's children challenged the estate, saying that the jointly owned property should have been part of the estate.

When a parent adds a child's name to an asset, there is a legal rule that comes into play under which the law presumes that the asset, though in joint names, properly belongs in the parent's estate. This is important because if the child gets the asset as a joint owner, the child will also get any share of the estate he is given under the will. This gives one person a much greater share than anyone else, which of course is never popular.

Because it's a presumption and not a proven fact, the presumption can be rebutted (or in plain English, overturned) by evidence that the parent did in fact intend for the child to own the property as a joint owner. But what evidence is needed? Many a beneficiary is finding out that simply telling people that "Dad told me I could have it" is simply not going to cut it.

In the Khadikin case, the court called as a witness the lawyer who prepared the transfer of the house into joint tenancy. The lawyer was questioned extensively about what he had said to Mr. Khadikin, and what Mr. Khadikin said in response. It was important that the lawyer had insisted on meeting Mr. Khadikin without the son being present, and had asked him frank questions about why he wanted to transfer the property. The court looked at the notes taken by the lawyer during the meeting as well.

The court was satisfied, based on the lawyer's testimony, that Mr. Khadikin had in fact intended for Ronald to own the property on Mr. Khadikin's death. The lawyer recalled Mr. Khadikin's explanation of what he intended to do, and his reasons for making the transfer. Therefore Ronald could keep the property and it didn't have to go into the estate.

This case illustrates how the courts look at legal rules on a case by case basis. The court takes a basic legal rule or statute, and factors in the specific facts of a case to see how they affect those rules. This case would have had the opposite result if Mr. Khadikin had told the lawyer that he was just adding his son's name to avoid probate, for example.

The case should also be an example to all of the parents out there who have put their kids' names on their properties of what it takes for their kids to straighten out the joint property questions after the parents pass away. Is it really cheaper to pay for a full trial in court than to pay probate fees? Is it easier for your kids to hire a lawyer, wait for many months, to give testimony in court, and to wait again for the judge to hand down a decision than it is to apply for probate?

Monday, July 20, 2015

Transferring a cottage after you're gone

Recently the Globe and Mail carried an article by Tim Cestnick that discusses the options available for transferring your cabin or cottage to your family after you have passed away. Click here to read the article. I like the article because Mr. Cestnick mentions drawbacks as well as advantages of the options.

Obviously the plans for transfer have to be made while you're alive, and set out clearly in your will. This isn't something you should try to do in a home-made will; it's worth every dollar to get proper legal advice on this.

I'd also like to add that before you make a decision about which, if any, of your children are going to inherit your cottage, talk to them. Don't assume that all of them want the cottage. Even if they use the cottage now, will they want to use it in the future if you are not there? Will they be willing and able to work out the day-to-day essentials such as shared usage with their siblings? Are they planning to move away or buy a cottage of their own? Do everyone a favour and have a frank conversation with the kids before deciding on a plan.

Wednesday, July 15, 2015

Court case proves false economy of cheap wills

In the last 29 years, I've had a lot of conversations with a lot of people about wills. Whenever the first thing the person asks me is the price of the will, I know that person isn't likely to become my client. Not because I charge a lot of money, but because I tend not to work with people who focus on price rather than value.

I understand that everyone wants to get the most out of their money. I do, too. But it's important for consumers of legal services to understand that the price of a will should not be the determining factor in whether or not you hire someone to do your will. You get what you pay for. If you want someone with deep knowledge of the subject matter and years of experience backing him/her up, it's going to cost you more than it would to get a will done by a junior two weeks out of school. And it's going to cost more than if you do it yourself, since you have no training or experience whatsoever.

There are times when it makes sense to go cheaper. Generic prescription drugs, for example, are generally considered to be as effective as the brand name variety. There are other times when it doesn't make sense to cut corners, and getting your will made is one of those times. I'm not saying you have to spend thousands of dollars to get a will made. I just think that going for the cheapest one regardless of quality is foolish. You may never know the difference, but your kids and spouse left behind after your passing will certainly know.

Why does the price make a difference? Because the person who charges more is spending more time with you to find out about you, your family, and your finances so that he/she can spot issues. He or she is giving advice based on experience, not just general legal information. That advice is tailored to you and fits your situation. The person isn't just making a document for you; he or she is making sure that all aspects of your financial and legal arrangements will actually work together when the time comes.

I'm attaching a link - here - to a story from the British website in which Mr. Ebenezer Arebesola chose to go the cheap route and his family is paying the price. Mr. Arebesola used an unregulated will-writer who failed to tell him that he could not leave half of a jointly-owned house to his daughter. Now that Mr. Arebesola has passed away and his daughter cannot inherit the house, the will is being litigated in court.

I've always told my clients that when  you're getting a will made, the goal is not to get a piece of paper with "Will" on it. Anyone can give you that. The goal is to go through the process of planning so that the piece of paper you end up with is actually going to do what you need it to do.

Thanks for reading - 3,000,000 views and counting

Today we - my readers and I - passed a big milestone. This blog now has more than 3 million views. I am so grateful for all of you who come here to read, think, ask questions, and find information about wills and estates.

Thanks for reading, and keeping me on my toes!

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