The Estate House

RCMP Burial Dispute - Update

The Edmonton Journal is reporting this morning that Kelly Johnson has won the right to move her husband's body from Lac la Biche to the RCMP depot in Regina.  The article does not say on what basis the decision was made, but as soon as I am able to locate a copy of the written decision, I will provide more details.

Where to Keep your Documents

A few years ago, I did up documents (will, power of attorney and personal directive) for someone who advised me that she was going to store the originals of those documents in the safety deposit box belonging to the person she had appointed as her executor and attorney.   She recently became ill and it was discovered that she never delivered the documents to the safety deposit box.  Now her family is having to search her home to find out where they are.

Always always always make sure that people know how they can access your documents.  If you think about it, at the time that they're needed, you probably will not be in any position to remember where they are.   It doesn't make any sense to have documents done if no one is going to be able to find them when they're needed. 

But I Did All That Work!

One subject that comes up frequently in our area of law is how much an executor should be paid for their work.  Sometimes when I'm meeting with estate planning clients, they will want to leave a specific bequest to the executor in their will.   Specific bequests aren't necessary, as the law allows for executors to take a fee, usually in the range of 3 - 5% of the gross value of the estate.   Whether an executor takes 3% or 5% depends on the complexity of the estate and whether there were any special matters that the executors had to attend to.

What's important for potential executors to remember is that the work they undertake must be reasonable in order for them to be compensated for it.  In the recently decided case, Samchuk (Estate of), 2007 ABQB 268, the executors were brought to task by the beneficiaries over their fee.  One of the estate's assets was a herd of cattle.   The executors maintained that the deceased wanted the herd to be fed and looked after until they died, although those wishes were not written down anywhere.  They spent considerable time, money, and effort travelling to the farm to ensure that the herd was properly cared for and the herd was not sold in a timely manner.  For their trouble, they believed that they should receive the top fee of 5%.

The beneficiaries, on the other hand, objected to the executors taking a fee for work that they felt was unnecessary.  Had the herd been sold, they wouldn't have had to undertake all that extra effort to looking after the cows.   There were also several other minor issues that saw the Executors bicker with the beneficiaries rather than just continue with the administration.

Mr. Justice Wilson agreed with the beneficiaries, "If the Executors had carried out their work efficiently, there would be no need for such a large fee at 5%, as the administration was not difficult."  He awarded the Executors what he felt was a more appropriate fee of 2%.      

So if you're an executor, you need to be aware that you may not be compensated for undertaking work that is discretionary rather than necessary.  And what you may feel is "necessary" - because it was your mother's dying wish, for example - may not be the view of everyone else. 

How long does probate take?

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To probate a will means to have the court say definitively that this document was the deceased's last will and to confirm someone to act as the deceased's personal representative, or executor.  An application for probate also involves setting out the deceased's assets (as discussed in the previous post), so that the court and various financial institutions and the Land Titles Office can have some security in transferring those assets to another party for the benefit of the beneficiaries.   

This is usually not a difficult process, particularly if you have good legal counsel to help you, but it doesn't happen overnight. 

The law requires that you must wait at least seven days after a person's death to submit a will to probate.    It is not unreasonable to have the application for probate prepared and ready to submit within this time frame, but usually a family is too busy dealing with other aspects of the passing of their loved one to worry too much about probate right away.   The timing for when an application for probate is submitted will depend upon who the executor is, how extensive or complicated the estate is, and how easily information about the value of the estate and the beneficiaries is obtained. 

Once the application is submitted, it usually takes 4 - 6 weeks for the grant of probate to be issued by a Justice of the Court of Queen's Bench.  After the executor has received the grant of probate, he or she can take the grant to the institutions involved and begin collecting in assets.  If land is involved, the timeline is extended, as documents will need to be submitted to the Land Titles Office to transfer the property to the executor in trust for the estate.  It will then be up to the executor to either sell the property and include the proceeds as part of the residue of the estate, or to transfer the property to any individual or group who was left that specific property in the will.

If the assets have all be liquidated, then it is time to distribute the estate to the beneficiaries.  However, it is advisable that executors wait until they have received a Clearance Certificate from the Canada Revenue Agency prior to distributing any money so that there is enough to pay any taxes that might be owing by the estate.   That can take anywhere from 6 to 18 months, although interim distributions of partial inheritances can be arranged if deemed to be appropriate in the circumstances.

All told, executors have one year to try and wrap up an estate, although it can be shorter or longer, depending on the estate.

In other words, if you're a beneficiary under a will, don't count on your inheritance to be available to pay next month's rent. 

Just what am I "probating"?

Many people have heard of "probate" even if not all of them really know what it means.  The nuts and bolts of the process were set out in an earlier post, but beyond the actual process, there are a few things executors should be aware of.

First, it is the executors responsibility to account for all of the deceased's assets so that they can be set out in the application for probate.  This can be as simple as asking the bank(s) for a list of accounts, or can be as complicated as determining the value of an ownership stake in any number of business holdings.   As an executor, you need to satisfy yourself that you have searched all reasonable places for evidence of anything of value, even if it means combing through years of collected statements.   Be prepared to be challenged by beneficiaries who will accuse you of hiding assets, particularly if you were also the deceased's attorney under a power of attorney just before his or her death.

As I mentioned earlier, the best way to protect yourself against these kinds of allegations is to be as open and transparent as possible.  That means sharing as much information with the beneficiaries as possible, and being prepared to answer to those people who expected to be beneficiaries (or expected to get more than the will sets out), only to find out that the testator had other plans.  Sometimes children believe that their parents are wealthier than they really are. 

If you find yourself in a situation where you are a beneficiary and you are not satisfied with how the executor is handling things, there are two main ways about addressing the situation (assuming that you are not receiving adequate information from the executor).  The first is to find out if a lawyer is handling the application for probate.  If so, then it is more cost-effective (i.e. cheaper) to contact that lawyer first to see if he or she can advise you as to what's going on.  I say cost-effective because those costs will, in all likelihood, be paid for by the estate prior to distribution to the beneficiaries.  If you go the second route and hire a lawyer to represent your interests, there is no guarantee that the estate will cover your legal costs.  It might, but there is no guarantee.

So, once there is an accurate understanding of the estate's assets, we then go to the second most common complaint from beneficiaries when it comes to probating a will...

Does it count if it's not read out loud?

I was reading this morning about Nina Wang, the Chinese multi-billionaire who died last week.  Nina inherited much of her wealth from her husband after he was kidnapped in 1990.   His body was never found and he was declared dead by a Hong Kong court a few years later.  Nina had her husband's power of attorney, which enabled her to manage his business affairs (he owned a large corporation called Chinachem), but after he was declared dead all of that was put on hold until they had a "reading of the will."   After that all heck broke loose, but that's for another post.

If you've seen a movie or television show where a character has died, you'll be familiar with the concept of having a "reading" of the will.  Usually the family gathers in a study or library of some sort with dark panelling on the walls, and the family lawyer stands behind a desk and reads out the will.  I think that the movies and tv is the only time that this ever actually happens, but I might be wrong. 

Contrary to public belief, there is no requirement that the deceased's will be read out loud to members of the deceased's family, at least not here in Alberta.   In fact, the only people who are entitled to even see a copy of the will are the individuals who are mentioned in it and anyone who might have a dependent's relief claim (spouses or adult interdependent partners, dependent children, and adult children who are unable, by reason of physical or mental disability, to earn a livelihood).  That's it. 

Now usually it's a good idea for the executor/trustee to keep everyone in the loop.  That's the easiest way for them to avoid any accusations of impropriety and to keep things as transparent as possible.    But that doesn't mean that they are obligated to provide anyone and everyone a copy of the will.  Even those individuals who inherit under the will usually receive their copy of the will when they receive the application for probate submitted by the executor/trustee.  So if you're wondering what's Mom or Dad's will, find out who the executor is and ask. 

But, you say, it's not always that simple.  I know, and that's what I'll discuss in my post...

When Someone Dies

Having someone close to you die is traumatic.  The emotion that is inherent in these situations is often what makes the prospect of administering that person's estate seem daunting for whomever has been appointed as the executor.  Potential beneficiaries want to know when they are going to get their due. Very few people involved are aware of exactly what is required to ensure that the estate is administered properly.  Over the next few blog posts, I'm going to explore various scenarios related to the administration of an estate.

The first aspect is ensuring that the deceased's remains are properly disposed of.  As I've discussed in previous posts, the executor bears this responsibility, and it may or may not be carried out in accordance with any written wishes previously expressed by the deceased.  People often want to know if they should include their funeral wishes in their wills; our advice is that is usually best to discuss your wishes with your executor, as by the time anyone gets around to looking at the will, any decisions about your funeral may have already been made.   You can have them written down, but make sure that your family knows what you want. 

Next post...when will the "reading" of the will be held?

What Does Probate Mean?

David Koski, a partner at The Estate House, wrote an article on probate that appeared in the Edmonton Examiner.   You can access the article by clicking the link below.   

Download examiner_article_probate.pdf

May They Rest in Peace (Finally!)

Exactly two weeks after she died, a Florida judge made a ruling yesterday on where the remains of Anna Nicole Smith should be buried.   Actually, he didn't rule on where she should be buried, just on who got to make that decision.  However,  Judge Larry Seidlin made clear what he thought the deceased's model's wishes were before giving custody of her remains to Richard Milstein, the court-appointed guardian of Smith's infant daughter.   Shortly after Judge Seidlin's decision, Mr. Milstein announced that he would be taking Smith's remains back to the Bahamas to be buried beside her son.

Even without Judge Seidlin's innappropriate display of emotion from the bench (he cried, had to take a break, and "blubbered"), all of the legal matters that have arisen from the death of Smith have taken on the tone of a parody of the justice system.  I keep waiting for one of the parties involved to give a sly smirk to the audience before announcing, "Live from New York it's Saturday Night!"  We all deserve better.

It's interesting from a legal perspective to see a lawyer appointed as a child's guardian when her parentage is in dispute.  That is not a practice that I'm familiar with here in Canada, although it doesn't sound like it's uncommon in Florida.  I don't believe that the child is living with Mr. Milstein, so this is obviously strictly for legal purposes until her paternity is settled.  Usually in situations where an obvious guardian does not present him/herself, the child is put into foster care until the dispute is settled, or sent to live with an impartial third party (i.e. family friend) rather than having a court-appointed guardian.  Little Dannielynn's paternity should be settled within a few weeks.  It took a backseat while the burial was in dispute. 

If Anna Nicole Smith needed to be buried soon because of the state of her body, the family of James Brown were in no hurry to decide on his final resting place.  Following his death on Christmas Day, they kept his body in a temperature-controlled room  before moving him to a crypt, where he has "resided" for the past several weeks.

Finally, just one day before the Smith decision, Brown's children and spouse agreed on a burial place.  The exact location will be kept secret, but he will be buried.  It took nearly two months, but a peaceful decision was made.  That's got to make him feel good.

And I know that the point of all of this is obvious, but please - write your wishes down.  Find an executor you trust.  Make a Will.  Unless, of course, you're satisfied with having the court make these decisions for you.   

James Brown Burial Watch: Day 43

That's right.  43 days after his death on Christmas Day and James Brown is still not buried.  As I had mentioned in an earlier post, his burial is one of a myriad of issues that is being affected by a dispute between the singer's children, his trustees (one of whom is his lawyer), and his (alleged) widow.

It's complicated, but it shakes down like this:

First, most of James Brown's assets (i.e. his home, intellectual property, etc.) were put into a trust while he was still alive, in what's called an Inter Vivos trust.  That means that his will, which divided his property among six of his children, only dealt with personal possessions.  Those possessions, as I understand it, have been divided as requested.

Second, the children are disputing how the trustees are administering this trust.  They are alleging all kinds of fraud and have made an application to have the trustees removed.  This application will be heard on February 9 (this Friday).

Third, James Brown's wife, Tomi-Rae Hynie, is saying that she should be entitled to part of the singer's estate.  The trustees and James Brown's older children are arguing that the Brown-Hynie marriage was invalid, meaning she is entitled to nothing.  The son of James Brown and Tomi-Rae Hynie was left out of James Brown's will, as he was not specifically named.  At the very least, Ms. Hynie would like to get back into the home she shared with Brown to retrieve her personal possessions.  The house/crypt is included in the contents of the trust and the trustees have so far refused her access.  She has also made an application, which is scheduled to be heard at the same time as the one above.

In short, quite a mess.  Of course, an update will follow the February 9 application.