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Monday, June 18, 2018

Married vs common law rights in estate matters

Normally I post things that apply to readers across the country, but in this case the article focuses on Ontario. Please take note of that if you are reading from other provinces! I wanted to post this article despite its being limited in geographic scope because it's very good. It's a really on-point discussion of the differences between being legally married and being in a common law relationship when one of the partners passes away.

The rights of common law partners are different in each province.

My experience with my own clients has been that the differences between legal marriage and common law relationships are not clear to people. They make assumptions about their rights and their partner's rights that are, unfortunately, incorrect and usually not discovered until too late.

Click here to read the article from Advocate Daily.

Wednesday, June 13, 2018

If I can prove the POA stole money, do I call the police or a lawyer?

So you're pretty sure that the person acting under an Enduring Power of Attorney has stolen money he or she was meant to be looking after. You can prove it. But how exactly do you do that? What is your first move? A reader recently asked me that question. Here is the question and my response.

"Hi, if we know for sure a POA stole money and we have the proof, can we report this crime to police? Or get a criminal Estate Lawyer?"

You can do either of these things, or both. The choices you make will have very different processes and very different results.

If you report the situation to the police, they will start an investigation. This will take a while because they will obtain all relevant information from the court, the banks, witnesses, or whoever else is involved. The person who is being investigated may not even know about it for a while. If the police find the evidence of a crime, they will charge the person with that, setting into motion the criminal court system.

If the police become involved,  you are not in charge of the investigation. You cannot decide to stop it or to push it, as it will be in the hands of other people. If the police don't find enough evidence to proceed, they may advise you to get a lawyer and go through the civil court system instead. I'll talk about that a bit more in a minute.

Criminal charges relating to estates are usually economic crimes such as fraud and theft, though of course the crimes are limited only by the imagination and nerve of the perpetrators. There is a specific crime in our Criminal Code called "Theft by Power of Attorney". If the police lay charges, there will be a trial and you will most likely be called as a witness.

Because these are criminal charges, a person who is convicted of an offence will face the kind of consequences that our criminal system allows. This might be a fine, community service, or even jail time. In the vast majority of crimes relating to estates, there is no recovery of the missing estate funds.

If you choose to hire a lawyer and use the civil court system, things are very different. First, though, I must point out that there really isn't such as thing as a "criminal estate lawyer". As discussed above, if you are using the criminal system it means that you are calling the police and you don't need a lawyer for that.

In the civil law system, the person who has allegedly stolen money is not arrested. They are sued. You would start a lawsuit against them and you would pay a lawyer to do that for you.  You maintain control of the lawsuit and can choose steps along the way such as mediation, settlement, discoveries, etc which may keep the whole thing out of court.

Criminal remedies such as jail time and fines do not apply in the civil system. The outcomes you would ask for would include such things as removing the person from the power of attorney, ordering them to repay funds or return assets to the owner, getting land transfers reversed, and ordering the person to pay your legal costs. As you can see, this is a very different sort of result. In the civil system, you can also use tools such as negotiation and mediation to resolve problems without anyone having to go to court at all.

You might wonder which of these options is the better one for you to pursue. Every case is different so there is no answer that suits everyone. Here are some things to take into consideration:

1. What you must prove. In a criminal case, the prosecutor must prove beyond a reasonable doubt that the person committed the crime. In a civil case, you must prove on a balance of probabilities that the person carried out the activities you're alleging. It is easier to meet the civil standard of proof than it is to meet the criminal standard. You might not really know if your evidence is strong enough until the police have investigated.

2. Cost. If a person is arrested and goes to trial on criminal charges, that does not cost you money. On the other hand, if you hire a lawyer and sue someone, that does cost you money. You might be able to recover some of  your legal costs but that isn't something you can count on. If the police won't lay charges you will have no choice but to use the civil court system. As mentioned above, you can choose to use the civil system because of the standard of proof you must meet.

3. Family relationships. If the person who has allegedly stolen the money is related to you, think carefully before either calling the police or launching a lawsuit. Whichever way you go, it will be with you and your entire family for years to come. Seriously consider alternate dispute resolution methods such as mediation.

Monday, June 11, 2018

Executor must repay $91,000 to estate plus legal costs for shirking responsibilities

It's tough being an executor. It's even tougher if you ignore your responsibilities, let estate assets fall apart, and mingle estate money with  your own. This is something that was recently brought painfully to life for Francesca Mary Duck of Clearwater, British Columbia.

Ms. Duck was the common law wife of Lloyd Arthur Wade. He died in 2011. Mr. Wade had adult children from his previous marriage and his will made provision for his children as well as for Ms. Duck.

The problem arose because of a motor home. In 2005 Mr. Wade and Ms. Duck bought a motor home for about $146,000. The contract for the purchase of the motor home listed Mr. Wade as the first buyer. The deceased's company and Ms. Wade were both listed as second buyers and the contract said that all parties were jointly and severally liable for the payments on the motor home. While Mr. Wade was alive, he made the payments from his business.

After Mr. Wade passed away, Ms. Duck made payments out of the deceased's company account until it was empty. Then she paid off the motor home (about $95,000) from the estate. At no time did she make any payments from her personal funds even though the contract said she was one of the buyers. She didn't use or maintain the motor home and eventually she just gave it away to a friend for free.

Mr. Wade's daughter got fed up with the situation and brought an application to the court to have Ms. Duck removed as executor. One of her main arguments was that Ms. Duck was mingling estate and personal funds (by using estate funds to make payments Ms. Duck should have  made herself). She also alleged that Ms. Duck was allowing a valuable estate asset to fall apart.

At the initial court hearing, Ms. Duck was successful. However, the daughter appealed the decision and won the appeal.

The end result was that Ms. Duck was removed as executrix. She was ordered to repay the estate $30,000 which was determined to be the value of the motor home at the time she gave it away. She was also ordered to pay $61,500 to the estate to make up for the payments she should have made personally. On top of all that, she had to pay the legal costs for the daughter. Ouch.

There is one simple lesson to be learned from this case, and that is that an executor cannot treat estate money as his or her own. Anyone who wants to read the whole case can find it here.

Friday, May 25, 2018

Here are some useful kits and guides for DIY executors and planners

Because I've been blogging here for a few years now, I tend to hear many of your questions several times. Your situations are all individual and unique, but the issues and concerns are common to everyone. I usually try to answer all questions as they come in but I do get pretty far behind sometimes!

I thought it would be useful to direct you readers to some of the materials that I have prepared (written and electronic) that you can find at my office. These have been prepared to address specific tasks or steps that executors are trying to take, often without the assistance of a lawyer. They are inexpensive but they are detailed, accurate, and up to date.

Click on some of the links below to see and/or purchase any of the materials that you think would be of help. They are all shipped from my office. Anything called a "kit" contains the forms you need to carry out the step, while anything called a "guide" contains information but not forms.

Guide to executor's duties and responsibilities

Get Started kit - record keeping for executors

Get Started kit - preparing an executor's accounting

Get Started kit - estate planning

Guide to calculating executor's compensation

Get Started kit - For My Family With Love (a place to record everything - assets, passwords, where to find things, contacts, personal messages, and more)

Get Started kit - mediation

We also have useful things such as kits for applying for probate without a lawyer, and applying for Letters of Administration. These are just for my home province of Newfoundland and Labrador at the moment, and of course there is the Alberta Probate Kit, but if demand increases I may yet end up making kits for other provinces as well.

If you have suggestions for kits or guides that you'd find helpful, let me know in the comments below.

Wednesday, May 23, 2018

You're a beneficiary. Do you need your own lawyer?

One of the most misleading phrases heard in relation to estate administration is the term "lawyer for the estate". Why is it so misleading? Because beneficiaries, who logically assume that as heirs of the estate they are represented by the estate lawyer, are completely incorrect in that assumption.

I regularly receive calls and emails from beneficiaries of estates not being handled by my office. They are bewildered, frustrated, and sometimes angry because the lawyer handling the estate won't answer their questions or do what they instruct the lawyer to do. They want me to slap that misbehaving lawyer into shape, or perhaps to complain to the Law Society. Recently I dealt with an estate in which I received a heated rant on a weekly basis from a beneficiary who was in a rage because I wouldn't agree to call him and consult him on how and when things should be done.

All of this emotion is completely misplaced.

The estate lawyer does not work for the beneficiaries. He or she works for the executor of the estate. It is actually the executor who works for the beneficiaries, so the anger against the lawyer, if anger there must be, should be directed at the executor.

In a perfect world, the executor does a great job representing the interests of the beneficiaries. The lawyer obtains the probate from the court and advises the executor on estate issues and procedures and all is well. Most of the time, a beneficiary doesn't need his or her own lawyer because everything works reasonably well. All estates hit one or two small snags but generally not enough to cause a serious dispute. Sometimes things happen just as they should. Then again, sometimes they do not, and this is where the problems begin.

When a beneficiary is having a problem with the executor, the solution is not to contact the estate lawyer for help. The lawyer works for the executor and therefore cannot help the beneficiary. If the lawyer becomes aware that there is a dispute between those parties, he or she can suggest solutions or arrange mediation. Most of us will try really hard to ensure that an estate doesn't slide off the rails into litigation. If the executor refuses to do those things, the lawyer cannot force them.

So where does this leave the beneficiary?

As a beneficiary, your first line of communication and information is through the executor. Even if you don't especially like that person or you think his or her responses are too slow, the executor should be the first one you approach. If the communication breaks down so badly that you need outside help, you will likely need your own lawyer to assist you. After all, if every conversation ends up in a shouting match, nothing is being accomplished. You will want someone else to speak on your behalf.

If it is a dispute that requires court intervention, you will more than likely want a lawyer to assist you through the complicated estate process.

Often a beneficiary doesn't have a dispute but needs advice. For example, should you sign the Release? Why can't you have a copy of the will? Is there something missing from the accounting? If all you need is information about the estate process, the estate lawyer can probably give that to you. But don't ask the estate lawyer for legal advice about what you should do. Remember that he or she does not work for you.

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