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Thursday, September 21, 2017

Video: How to prevent fights over wills

Here is a brief video that readers might find interesting. In it you will see Rob Carrick, financial columnist for the Globe and Mail, chatting with Mark Goodfield, an accountant who does a lot of estate work, and who some of you may know through his excellent blog, The Blunt Bean Counter.

The video is about how to prevent fights over wills, which is something most of  us really want to know about. Click here to see the video. Not every idea works for every family, but maybe this video will give you an idea you can use.

Tuesday, September 19, 2017

Executor wants to buy the family home but a beneficiary has hired a realtor to sell it

Is there any asset that causes as much trouble in an estate as the parent's home? The interplay of legal rights and volatile emotions can make it tough to deal with. This reader recently asked me a question about an executor (who is also a sibling and a beneficiary) who wants to buy their father's home. Here is her question and my response.

I am co executor with my sister Deb for my fathers estate. Deb wants to buy the property and we have 2 appraisals. She is bidding in between the 2. Do we have to list it. Another sister is against her buying it and believes we have to list it to see if we could get more. If we already have a private sale that is paying fair market value are we safe? She as a beneficiary only has contacted got a appraisal and has contacted a realtor and says they want to show the place. I believe she can't do that and it will be invalid.

Dealing with the beneficiaries of an estate involves legal issues, of course, but all kinds of other things get dragged in. Can you imagine any other scenario where someone who doesn't own a house hires a realtor to show and sell that house? Estates are like that. There are always assumptions and expectations as well as strong feelings to contend with.

In this case, the beneficiary does not have the right to show and list the house. Nor does she have the right to override the executor's decision to sell the house. Unless the executor is doing something that is clearly not in the best interest of the estate, the beneficiary really has no grounds for an objection at all.

An executor who buys an asset from the estate should pay fair market value. An executor cannot give herself a great deal on the house to the detriment of the beneficiaries. Here, the executor who wants to buy the home has obtained two appraisals and is bidding within that range. That is exactly what an outsider would be expected to do, so there should be no reason to object to this particular buyer at this particular price.

It could even be to the advantage of the estate to accept this bid, because the estate would not have to pay realtor's fees. There is no law or rule that says the house must be listed. If there is a private offer that is comparable to what the house would fetch on the open market and the executor is not receiving a benefit (i.e. an artificially low purchase price), certainly the house can be sold to that executor.

Sometimes the real objection is not the price. Sometimes it's personal. I've seen many cases where a sibling doesn't want the house for himself or herself, but adamantly refuses to allow another sibling to buy it. Vendettas and resentments go way back and this is one way they manifest.

I always advise executors to change the locks on the house when a parent has passed away. This is because the beneficiaries tend to think of the house as "the family home" and with that, they believe they have rights they don't actually have. The sister who has hired the realtor is a prime example. But it's not her house. Legally it's not the family's house. It's the estate's house and the executor has the right and the obligation to deal with it.

The will itself can be of great value in a case like this. Perhaps the will gives explicit permission for the executor to buy from the estate. The will might contain options or powers that will help the executor. This is a reason that it pays in the long run to have a will prepared by a very experienced wills and estate lawyer.

I hope this matter doesn't have to be decided by a court, but hard feelings between siblings often cause simple matters to end up there.

Sunday, September 17, 2017

Taking the financial reins from Mom and Dad

Many people think of estate planning as making a will, but that's only part of it. The other important part is making documents that plan for losing your mental capacity. Sure, it's not the most fun thing to think about but it's certainly better than the situation occurring while you're unprepared. The incapacity documents are the Enduring Power of Attorney and a healthcare directive.

Adult children who are appointed under the Enduring Power of Attorney have to adjust to the role reversal. Now they have to parent their parents. Those who haven't been through it perhaps don't understand what the process is like.

I've just read a good article about taking the financial reins from your parents at www.financialplanningforcanadians.ca. Click here to read it. By the way, there are lots of other really good articles about money and planning on that site, so take a look around.

Saturday, September 16, 2017

Mom left me the house. What do I owe my brothers?

There is an interesting article in www.nytimes.com that caught my eye. The column is not written by a lawyer, but by someone who is called an ethicist. I'm not sure that's a real title but clearly it indicates that the column is intended to be about moral rather than legal rights. It gives an added dimension to how I usually think about inheritance issues. It might give you added perspective, too.

A question was asked by a 60-year-old person who inherited the house from his mother and is now being threatened with a lawsuit by his siblings. Certainly a situation I've seen many times.

If you're interested in what an ethicist rather than a lawyer would counsel this person to do, click here to read the article.

Thursday, September 14, 2017

Wills Week is approaching: speakers are invited to participate

We're in the process of setting up our third annual Wills Week event. It just gets bigger and better every year. This year we are doing something completely new - a Wills and Estates Trade Show! The event takes place on Saturday, October 7 from noon to 5 pm at the Capital Hotel in St. John's.

Our goal is to raise awareness of the need for advance planning and to encourage members of the public to get their wills and other planning done properly.

We are compiling a roster of speakers to give 20 to 30-minute talks to the public about various topics relating to wills, probate, estate administration, estate planning, charitable giving, and anything else related. We have three confirmed and a few in the discussion stage, but have space for at least two more. If any readers are interested in speaking, let us know by emailing Chelsea Kennedy at chelsea@butlerwillsandestates.com.

Each of the speakers will also get to host a booth. We are limiting the number of booths to 10 and are giving exclusivity to the first person or group in each industry. For example, the first funeral company that is confirmed will be the only funeral company at the event. We have a couple of booths left and welcome lawyers, accountants, appraisers, realtors, funeral homes, etc to get in touch if they'd like to join us. Email Chelsea at the address above to find out about the cost. Non-profit groups may participate at no cost.

At the booth, the hosts can meet members of the public, talk about their services, offer discounts, give out materials, or simply make people aware of them. It's a great way for people in the industry to meet individuals and families who are interested in finding out more about their services.

We have two types of  packages available, one of which includes a guest spot on The Law Show.

The public will be invited to attend the event for free. We have already begun our promotion of the event by talking about it weekly on our radio show, placing posters, talking about it in our monthly newsletter, and telling all of our clients about it. We'll continue to use those methods as well as social media to help ensure a great turnout.


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