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Saturday, December 14, 2019

More estate planning YouTube videos you can watch for free

Have you been keeping up with our YouTube channel? Our social media team has been really busy! We're in the middle of posting a video series called "The Top Five Estate Planning Misconceptions" as presented by Chelsea Kennedy, our Executive Practice Coordinator. Click on the links below to watch the videos, and be sure to subscribe to our channel so you won't miss the rest of the series.

Misconception 1 - Adding children to the title of your home
Misconception 2 - Adding all the kids to the family cabin
Misconception 3 - Legal words vs ordinary use of words

There are plenty of other videos in the works, but let us know if there's a topic or question you'd like to see covered.

Friday, December 13, 2019

Sir Donald Gosling leaves 50 million pounds in his will for new royal yacht

It's great to have wealthy friends. A friend of the British royal family, namely Sir Donald Gosling, has left the royals the sum of 50 million UK pounds to replace the royal yacht Britannia. The royals have been without a yacht since 1997 when the government of the time axed it due to spending cuts. Click here to read more about this story from

It's not clear to me from reading this article or others that I found on the topic exactly who was left this gift. I don't know whether it was left to a particular person, group of individuals, or to the Crown itself. "The Crown" is a legal entity in itself.

It's not surprising that Sir Donald was generous in his will, as apparently he gave about 100 million UK pounds to charities during his lifetime.

If you, too, would like to ensure that specific friends of yours do not go without certain items, whether those items are yachts or more modest effects, you must include such gifts in your will. If you pass away without a will, your friends are not included in the list of people who may inherit something from you. If it's important to you that a friend receive some money or an item, make sure you address it in your will.

If you would like to benefit a charity on your death, you must make a will. Verbally telling your family members that you would like to leave something to your favourite charity is not enough. Your executor has to do what's in the will, so if the gift to charity is not included, it can't be done. In Sir Donald's will, he expressed a specific purpose for the money he left behind. You can do this as well, and this is commonly done when gifts are left to charities.

The attached photo of Sir Donald Gosling with her majesty, Queen Elizabeth, accompanied the article in and is credited to Getty Images.

Wednesday, December 4, 2019

Can the executor control when and how much money a beneficiary gets?

A reader has asked a question about how much control an executor may exert over the amount of money a beneficiary receives, and how often he or she receives it. This isn't an unusual question, since most people, including executors themselves, don't always realize or respect the boundaries of an executor's authority. The question and my response are below:

"Can the executor control when and how much money a beneficiary gets? The executor is currently only releasing a little per month to my wife and is threatening to 'cut her off' if she doesn't do what he wants."

The executor has to follow the will, so to answer this question, you have to look at the wording of the will. In order for the executor (who in this case is also acting as the trustee) to release only a bit of money each month, the will has to say that your wife's share is held in trust. The trust could be for a certain amount of time, or for her entire lifetime, as determined by the will. If it is not held in trust, then the executor has to release the share to her as soon as the money is available. By available, I mean that assets have been sold or converted, and debts have been paid.

If there is no trust, the executor does not have the option of holding onto your wife's share and doling it out to her a bit at a time.

Keep in mind that an executor may choose to hold back some part of the estate until a tax clearance certificate is obtained. The situation you've described doesn't sound like a hold-back; it sounds like a trust.

If the will does say that your wife's share is to be held in a trust, read the will to see what it says about the timing and amounts that your wife should be receiving. It's not unusual for an executor/trustee to be told simply to hold the money until a certain time and to use his or her discretion in when the beneficiary gets the money in the meantime.

The key to what you're looking for in the wording is the executor's discretion. This term refers to the executor's power to withhold or pay money as he sees fit. If the will gives the executor full discretion, then yes, the executor can certainly control when and how much money your wife may receive. If the trust terms given under the will say that your wife is to receive a certain amount each month or each year, then the executor must give her that much and he doesn't have a choice in the matter (unless there are insufficient funds).

Obviously I haven't seen the will in question so I can't interpret the wording for you. Hopefully the will is clear on what the testator intended to do.

The executor may be completely ignoring the terms of the will that describe how your wife is to receive her inheritance. If this is the case and he will not handle the estate properly, your only recourse is to hire a lawyer who will help you to force the executor to handle the estate as he should be. I really hope it doesn't come to that.

We also need to look at the fact that the executor may be abusing his position to try to control your wife's actions in some way. He certainly wouldn't be the first executor to do so, unfortunately. Threatening to cut someone off is, at first glance, a completely wrong approach for an executor to take. However, there are at least two sides to every story. A struggle like this is rarely one-sided. The executor could be trying to say - for example - that it's his job to ensure that her inheritance lasts as long as possible and that her spending will deplete it too quickly. Perhaps he believes that the amount he is dispensing each month is perfectly reasonable and in accord with the terms and the intention of the will. He might think that your wife is asking for too much money.

Start by getting a copy of the will. If you can't find what you're looking for, take the will to an estate lawyer for an interpretation of the terms of the will and an opinion on your wife's rights as a beneficiary.

Saturday, November 30, 2019

You're handling an estate: what's your exposure to personal liability?

From time to time, I meet family members who come into my office as a group because someone has passed away. They tell me about their brother, sister, aunt, uncle, or parent who died without a will, and about the deceased person's assets and debts. Information flows easily from them and sometimes I can barely keep up with my note-taking because everyone is eager to contribute to the conversation. Then I ask which one of them is going to handle the estate, and the room goes silent.

Nobody wants to do it. 

It's not always easy to get people to verbalize their objection to handling an estate, but I ask questions until I find out. Is it the amount of work involved? Are they concerned about family disputes? Are they unable to agree on who should be the one to be appointed? Generally, these are not the issues. The issue is that everyone is afraid of liability.

In particular, everyone is wary of accidentally signing up to pay another person's debts.

Nobody wants to take on a job that may cost them money they can't spare, or that might damage their credit rating, or put them in the direct line of sight of collection agencies or, worse, Canada Revenue Agency. I can certainly sympathize with not wanting to invite trouble in through the door. 

But let's look at the reality of the situation. If a family member takes on the duty of being appointed by the court as an administrator of the estate, what is his or her exposure to personal liability? The first job of the administrator is to arrange for the burial or cremation of the deceased. If the deceased had enough money to cover those expenses, that money is used. If there isn't enough money, family members usually pool together to cover basic expenses, but that is not required by law. They do that so that their loved one won't have to be buried at government expense in a so-called "pauper's grave".

Assuming that burial or cremation is satisfactorily dealt with, the administrator will then turn to the collection of the deceased's assets and the payment of debts. This process may well be put on hold if it is necessary for someone to be appointed by the court, then picked back up once the court process has been completed.

The administrator's responsibility is to pay all of the deceased's legally-enforceable debts and estate expenses using the deceased's money. They must pay the funeral, and any outstanding income tax. They must also pay mortgages, vehicle loans, and bills that the deceased didn't get a chance to pay, such as the last internet or phone bill. This can be tough if there is not much money in the estate. At this point, administrators are often told by creditors that they must pay the bills themselves. This simply is not true. Of course the creditors will say so, because in many cases it works and they are paid. 

If there is not enough money in the estate to pay all the bills, an administrator must be careful about how he or she deals with the assets. For example, it's not unusual for an administrator to give away all of the deceased's personal items, from tools to jewelry to appliances to vehicles. This is because family members feel entitled to have things, and the assets feel more like "just mementos" than assets. But if the total of the items given away by the administrator would have fetched, say, $5000 if they'd been sold, that's $5,000 the creditors won't receive. At this point, the administrator may be in trouble. The creditors would be legally entitled to demand $5,000 from the administrator personally.

As a rule, administrators don't take on the job with any illusions that it will be easy or fun. They do it out of family obligation and respect for their deceased family member. If they are careful, honest, transparent, and thorough, they are highly unlikely to run into any trouble. And unless they do something against the rules, they never become liable for another person's death.

If you want a thorough discussion of exactly what executors do wrong and what to do instead, check out my book called "How Executors Avoid Personal Liability".

Friday, November 29, 2019

Wow! Seven million views!

This is exciting! This blog has now been read seven million times!.I'm really glad that readers have found a place that answers their questions and gives them ideas on how to deal with their own estate-related situation.

Thanks to each and every reader who pops by occasionally or who visits regularly.


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