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Thursday, February 16, 2017

New podcast: Working with your estate lawyer - fees & billing arrangements

Our latest podcast is now up on our website. This time we answered a number of questions about how estate lawyers bill, what to do if the bill is too high, and other such essential money matters. Click here to see the list of podcasts and select the one you want to hear (or download). The podcasts are free.

As always, we welcome feedback, questions, and suggestions for future podcasts.

Tuesday, February 14, 2017

Elderly widow involved in bitter estate dispute

A recent blog post by Toronto lawyer Charles Ticker, who blogs at The Sibling Fight, talks about the ongoing fight between 91-year-old Margaret Davies and her son, Sidney. The issue is that Mrs. Davies' husband had promised Sidney that on his death, Sidney would get 1.3 acres of land and the barn on it. Mr. Davies died but his wife would not honour the agreement her husband had made with Sidney. The estate (including the farmhouse, barn, and land) is worth about 2 million UK pounds.

Click here to read more about this story and Mr. Ticker's comments.

The court has sided with Sidney. The issues have heated up. Mrs. Davies has refused to follow court orders and is now in danger of losing the entire estate because she would not part with the portion that was promised to Sidney. So far she has been ordered to pay thousands in her son's legal fees.

This raises an interesting question for many readers. Lots of us hear verbal promises from parents or grandparents that one day they'll pass something on to us. Yet, when their will fails to give us that gift, we are almost never able to claim what was promised. So what was the reason that the court is supporting Sidney's claim?

According to the facts of the story, after Sidney was promised that he'd one day own the barn and land, he moved into a trailer on the property. He spent thousands of dollars fixing up and maintaining the barn. In other words, he took the promise on faith and took action that was more to the advantage of his parents than to himself. He would not have spent the money on the barn had he not thought he would one day own it, and it would be unfair for them to accept the money and then take back the promise.

This concept is called constructive trust.There are conditions that have to be met in law in order for a situation to amount to constructive trust. The promise made must be something believable, and the person who believes it must take actions that are adverse to his own interest because he believes it. Not every promise made by every person is reasonably believable. And most importantly, in the vast majority of cases, the person who feels a promise has been made to him or her takes absolutely no steps to act on the promise.

It's always disappointing when a family ends up in litigation, but it's not clear from the story why Mrs. Davies is refusing to honour her husband's promise to her son.

Monday, February 6, 2017

If a will leaves money to "my children or the survivors of them", who exactly are the survivors?

If a will says that a gift is left to "my children or the survivors of them", who is meant by "the survivors of them"? If I leave a sum of money to my siblings "or the survivors of them", who exactly are those survivors?

This is a question that a reader asked recently on this blog, and I've also heard it in my office a few times lately. Since it seems to be one of those phrases that trips people up, I thought it would be a good idea to discuss it a bit and clear up the confusion.

Sometimes the phrase is misinterpreted to mean that "the survivors of them" refers to the children of the people named. It does not mean that. It's an easy mistake to make, since we are all used to gifts in a will being handed down through the generations. In this case though, the wording is specifically chosen to prevent the gift being handed down to children or anyone else outside the original group.

When we say "my children or the survivors of them" we mean "those of my children who are alive when I pass away, with nobody's spouse or children taking their share if they've already passed away". It's a last man standing concept. Only those of the original group who are alive on the specific day are included in the gift.

So, let's say I have three children, namely, Jack, Jill, and Joe, All of them are married and have kids of their own. My will says that I leave the sum of $75,000 to "my children or the survivors of them". When I pass away, if all of my children are alive, each of them gets $25,000. However, let's say one of them - let's say Jack - passed away before me. Now the $75,000 is divided between Jill and Joe, because Jill and Joe are the survivors of the original group.

The "survivors" are those who outlived the others to be alive when I pass away.

Let's say that all three of my children survive me so each is to get $25,000. Though all of my children were alive when I died, unfortunately Jack passed away a couple of months later and didn't live long enough to actually receive his $25,000. In that case, Jack's children DO get his share. This is because Jack was alive on the day I died so the money was his. He survived me.

Also part of the question is the clause in the will that says how long a beneficiary must outlive the testator in order to be considered a survivor. The traditional time is 30 days. I personally think that's too long and use a shorter time in the wills I draft. In my example in which I said that Jack survived me but died later, Jack must have died outside the time limit in the will. If, for example, my will says that someone must survive me by 30 days but Jack only survived me by two weeks, he would not be considered a survivor.

In a will, if a gift to a group is intended to be handed down to the children of someone in the group who passes away, the document should refer to the person's "children" or "issue", depending on the testator's intention.

If you're an executor trying to interpret a will of someone who has died, don't assume that you know what phrases mean. If you have even the slightest doubt, make sure you ask an experienced wills and estates lawyer. That should help prevent mistakes, delays and disputes.

Podcast: How to be a better beneficiary

Our latest podcast is ready for listening. This week we talked about beneficiaries. We covered what they're entitled to do and what they are not entitled to do, and several questions surrounding that. The idea is to give beneficiaries some information to help them get through the estate with the least amount of struggle and stress (for themselves and the executors). Click here to see the list of podcasts and scroll down to the one you want. As always, the podcasts are free to listen and/or download.

George Michael's estate is an example of tailoring a will to personal wishes

British newspapers and magazines have been reporting for a month or so now that the estate of pop star George Michael, who died on Christmas Day, 2016, is in the range of 100 million UK pounds (about $160,000,000 Canadian). They are also predicting that it will be distributed among his many God-children. Click here to read a story from with more detail and of course tons of photos.

Michael did not have children of his own, and he was not married. He had a boyfriend but I am not familiar enough with UK law to know whether the boyfriend has the status of a spouse.

If the will does, in fact, distribute the estate among his God-children, who include the daughter of a former spice girl and the children of his former band-mates, then it seems to me that this is an example of excellent planning on Michael's part. He will have shared his significant wealth among the people that he loved. He would have had peace of mind during his lifetime that he was going to be able to leave those people a way to remember him. He tailored his will to do what he wanted it to do.

Best of all, he will have spared everyone the horrendous fight that inevitably erupts when anyone with money passes away without heirs and without a will. In the absence of a will, family members would have to be tracked down and involved in the estate, even if they were family members with whom Michael was not close.

The attached photo of George Michael accompanied the Daily Mail article and is credited to Reuters.

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