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Sunday, October 24, 2021

Fisherman's Friend businesswoman leaves 41-million pound estate to charitable foundation

I recently read a story online about Doreen Lofthouse that I find interesting. Mrs. Lofthouse was the powerhouse who turned the Fisherman's Friend brand of cough drops into an incredibly successful business. The story I read talked about how she recently passed away leaving her personal estate of 41 million pounds (around $70 million Canadian dollars) mostly to charity. She carved off a piece for her staff members and the rest went to a charitable foundation she had set up.

Apparently the charitable foundation, which aimed to improve things in her home town of Lancashire, England, had been involved in a number of projects before Mrs. Lofthouse's death, such as a renovation to the local hospital. 

Mrs. Lofthouse left behind a son, Duncan, who did not receive anything under the will. However, Duncan runs the Fisherman's Friend company now and has for many years, so no doubt he is building up his own fortune and doesn't need anything from his mother.

I like the way Mrs. Lofthouse planned her estate. She set up a foundation during her lifetime and ensured that it was viable and that its goals were clear. She got to enjoy seeing her philanthropic endeavours at work while she was alive. She put people in place who understand the goals of the foundation and could work together.

This leaves no guesswork for executors. Once they wind up the estate (which of course means selling property, doing taxes, paying bills and all the rest of the usual tasks), they only have to write a cheque to the foundation. Mrs. Lofthouse didn't ask them to create the foundation or interpret her goals or find the people to run it. She did all the heavy lifting herself while she was alive, ensuring that things would run as planned after her death. All of the elements of her plans were designed to work together with her will.

Estate planning means more than just having a will made. Most of us will never have a fortune anything like what Mrs. Lofthouse had. But we do have life insurance policies and beneficiary designations and homes. Many of us want to make charitable donations of some or all of our estate. All of this has to work together. It may take a bit of work to get everything organized, but the end result will be that things will run so much more smoothly than if you just cobble things together with no planning.

To read more about Mrs. Lofthouse and her will, click here to see a story from the Daily Mail. 

Photo credit: News (UK) Ltd/Rex Features


Friday, October 22, 2021

Thinking of challenging an executor? Think carefully before committing to it.

Earlier today I answered a question from a reader about whether or not it is worth it to take an executor to court for taking money from the estate, selling off assets too cheaply, and doing other slippery things such as telling people they are not in the will when in fact they are. The reader was wondering about it because the dollar amounts in the estate are not the multi-million headline frauds we hear about in the news. This question of whether or not to begin a lawsuit is something that many readers here must think about in their own lives.

When clients of mine are considering starting a lawsuit, we sit down to consider it carefully. First I ask them to define their goals. Is their goal to recover funds? To make the executor accountable? To ensure the will is followed? Clients often verbalize goals that are not necessarily all about getting back the missing money.

Once I know what they want to do, we look at whether the law supports them. This is sometimes a disappointing step for would-be litigants because they do not necessarily want to know they don't have a strong legal footing. In the example of the executor given above, it would be important to determine  how much of what the executor has done is really within the discretion of an executor. For example, selling an asset for less than the beneficiary thinks it's worth may have another side to it. Maybe the beneficiary is misinformed as to the value. Maybe the executor had it on the market for many months and was forced to reduce the price to make a sale. Beneficiaries often misunderstand whether they get to approve of transactions.

Assuming my beneficiary client is correct and the executor is in fact taking wrong or illegal steps with the estate, the next step is to determine whether my client has any evidence. Not just guesses. Evidence. What proof exists that can be brought to a judge? Clients will often be quick to name family members or friends who are "willing to testify" and that is important, but there also should be impartial, hard evidence, Perhaps property valuations, bank statements, or other third party, neutral paperwork.

If all of that is in place, the client will know that he or she has a case that is strong enough to bring to a judge. The question still remains about whether he or she wants to go ahead. Nobody should ever enter into litigation lightly. I try to describe the process to my client without sugar-coating or, on the other extreme, sounding as if litigation is hell on earth. I remind my client that the process will not be quick and if it goes all the way to trial, could well take a couple of years.

Cost is a factor, even when the goals outlined by the client are not necessarily all about money. It's expensive to litigate. It could cost tens of thousands of dollars and there is no guarantee  you'll see any of it back again. Winning is not guaranteed. Getting your costs fully covered by an estate or the other party is unlikely.

Then there's the unpleasantness of it all. If my client wants to accuse an executor of breach of duty, he or she has to describe each and every wrong thing the executor has done. In return, the executor will sling as much mud as possible in return. It gets nasty, and that's hard on the nerves. Many clients will accept the headaches and stress as part of the cost of getting things done, but it's not for the faint-hearted.

As I often tell clients, the real question is this: Can  you live with yourself if  you don't do anything about it? If not, go ahead and give it a shot. Otherwise, think it over long and carefully before committing yourself to litigation.



Thursday, October 14, 2021

Funeral expenses: Why executors should pay them promptly

In every estate, there is a funeral bill to be paid. Does it matter if it's paid quickly? Who is supposed to pay it? What if you pay it but want to be reimbursed?  What if the funeral expenses are unreasonably high? All of these questions and more are addressed by Saskatchewan lawyer James Steele in a new blog post called Funeral expenses: Why executors should pay them promptly. Click this link to read the article, which is packed with practical information. 

Tuesday, October 12, 2021

New webinar: Being a Beneficiary: what you need to know

We're hosting a webinar and you are all invited!


I'll be presenting this 90-minute session on Zoom on November 18, 2021. We'll cover beneficiaries' rights and obligations as well as things like who pays the tax, what the executor can and can't do without your approval, and what happens if there is no will. And as a bonus, the first 100 registrations come with a free e-copy of The Beneficiary's Answer Book.

The seminar is designed for anyone who is a beneficiary or executor, or who deals with beneficiaries in their line of work.

If you want to register or just find out more, go to our website at www.butlerwillsandestates.com.


Friday, October 8, 2021

Relying on non-lawyers to prepare your will may save a few $ now but comes back to bite your wallet later

I'm going to tell you a story. A true one. About 20 years ago, a mother and father wanted to do their wills. One of their daughters had recently obtained a diploma as a legal assistant and convinced her parents that she could prepare a will as well as any lawyer. They decided to save a few dollars by having the daughter do the wills, and the wills were prepared and signed. Ten years later, the father died and the mother did a new will, this time with a lawyer, and another 8 years later she did a third one, again with a lawyer. The two later wills left a smaller share of the estate to the said daughter.

The mother passed away recently and the daughter who prepared the first will came forward to contest the second and third will. She insisted that the first will - the one she prepared for her parents - was a mutual will that could not be revoked by her mother. She began a lawsuit based on the concept that she, as the will preparer, understood that the wills were meant to be mutual. If they were mutual wills, she would be correct in that they could not be revoked by one party after the other one died. However, there is absolutely nothing in the wills of the parents to indicate they were mutual. 

This person, who persuaded her parents they didn't need a lawyer, is now responsible for a huge legal mess. Were they mutual wills? If so, why were they not prepared as such? Can the daughter be held responsible since she persuaded her parents she was skilled at will preparation? Did she understand what mutual wills meant, or didn't she? If they are not mutual wills, the daughter is simply challenging not one but two wills she does not like because she gets less under the estate.

Either way, the executor of the second and third wills is spending the parents' money to defend the two wills. The legal bills are already well past what it would have cost to hire a lawyer in the first place to make proper wills, and they are just getting started.

This is a new story, but also an old one. It has happened thousands of times that people who think they are saving a buck rely on legal assistants, financial advisors, or even insurance salesmen to prepare wills for them. Here is the spoiler ending: in the long run, they didn't save a cent. In fact, they lost big time. There's a saying that if you don't have a will, the lawyers are your heirs. That's also true if you rely on the wrong people for legal advice.

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