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The Role of the Trustee or Executor of Your Estate

August 11, 2014 in Legal Advice Blog

The Trustee Job is Easy

You may wonder what is involved in being an Attorney or an Estate Trustee. Some people think it’s no big deal so they pick someone to be their Trustee who they want to honour.

Choosing the Estate Trustee

The Estate Trustee is the chief cook and bottle washer when it comes to administering an estate. The best made plans can go badly awry if your chosen Trustee is not up to the task. How bad can it get? Very bad if the Trustee does nothing, does it slowly, fails to keep proper accounts, charges too much, steps on toes, bruises feelings …. well you get the picture.

Many people choose their Trustee using “the honour” system: as in “I think the world of you so I am going to make you my Estate Trustee without knowing whether you are up to the task or not”. Let’s be perfectly clear here, being an Estate Trustee can be a full time job and in all instances carries major responsibility. So let me ask you a question:

If you won’t buy clothes without trying them on, or a car without test driving several models first then why would you appoint someone to such a critical position before checking out his/her credentials ??

What are the Duties of the Estate Trustee

Here is a very brief list of an Estate Trustee’s duties:

Make the funeral arrangements (if not prepaid)
Take control of assets
Clear out a house or apartment
Assume responsibility for paying bills
Distribute or dispose of personal belongings and possibly referee disputes
Let everyone named in the Will know what they are getting
Get everything that is part of an estate valued
Apply to Court for probate, now called Certificate of Appointment of Estate Trustee With a Will (or Without a Will);
Possibly sell assets such as cars, houses, cottages, stocks, bonds (or deal with them according to the Will)
Submit income tax return(s) as required;
Prepare precise accounts that include assets and their values as the date of death, the disposition of those assets and for what price, the income received after death, the money spent after death and summarize all of the foregoing
Deal with personal issues from beneficiaries or people who have been left out
Manage and invest trust monies as a prudent investor would, if applicable (and sometimes being personally responsible for losses)
Decide how much to spend raising young children of the deceased, if applicable
Exercise discretion to encroach on trust funds or not, if applicable
Answer questions about the accounts, if any
Get releases and distribute money or transfer assets in kind.
If you:

own a business,
have interest in corporations or partnerships,
are a professional, or
have special needs beneficiaries, amongst other things,
there is even more to do.

The choice of Estate Trustee is absolutely critical to how well managed and administered an estate is. You do not want to appoint someone blindly. Do your homework. As part of their service to you, your professional team will guide you in what to ask.

Before I leave this topic, a word about Attorneys is in order. Almost everything I said about Estate Trustees applies to Attorneys (with obvious exceptions!). The critical difference is that you deal with the Attorney yourself, while you are alive.

Are you sure you want to leave your well-being in the hands of someone whose abilities you may know nothing about??

Home Inspections. Are they worth it?

February 5, 2014 in Legal Advice Blog, Real Estate Blog

Home Inspections

Most offers include a home inspection clause.

A Good Home Inspection – Worth its Weight in Gold

A good home inspection can be worth its weight in gold to a buyer, if only because it provides crucial information about the approximate age and condition of things like the roof, the windows and the furnace. Some reports include anticipated replacement costs for such items which permits a buyer to do some helpful budgeting. On some occasions, a home inspector picks up some really serious issues and helps buyers avoid a disaster.

The best home inspection, however, has limitations.

No inspector will comment on what he can’t see because it is closed in. And there are times when additional inspections may be necessary. For instance:

(i) If a house is in a known termite area, for example, you should have a termite inspection as well. Termite damage is very expensive to repair. And even if there is no damage, an inspection will indicate if a house has been properly treated to withstand termites; or

(ii) If a house is on well and septic instead of municipal services, you should have a separate inspection for each of these. In the case of a septic system, a leak or malfunctioning septic tank can create a huge expense and in the case of a well, an inspection can reveal problems with flow rate.

The Seller’s Side

For a Seller, home inspections can be problematic.  Often, a Buyer will try to use the findings of a home inspection to renegotiate an agreed upon sale price downwards. If a problem is significant, this may be warranted.  If not, it is a nuisance.

To minimize the possibility of renegotiation, I suggest the following to Sellers:

(i) Before you list your home for sale, invest in your own inspection report(s). Once informed. you can then choose whether or not there are items you want to deal with yourself. You can also make it available for review by potential Buyers. Once a Buyer is informed as well, it is harder to come back to you for a price reduction. A Buyer may still want to get his/her own inspection report done, but it will still be easier for a Seller to resist a price renegotiation;

(ii) There are different inspection clauses in use today. When you receive an offer, make sure you know exactly what the inspection clause says and what a Buyer’s escape routes are. With the assistance of your realtor or lawyer, you may wish to amend the clause to be more favourable to you;

(iii) If you are aware of an issue with your home, the counsel of perfection is to disclose it to a Buyer and have the Buyer acknowledge and accept it.

The foregoing is intended for information purposes only and is not legal advice.

What would you like to know more about? If you have a question that you think would make an interesting topic for a future article, please submit it to Garry!

There’s a cost if you don’t plan your estate

November 4, 2013 in Legal Advice Blog

Calculation of Estate Shrinkage

What is the cost of NOT planning your estate? Use this form to get a rough estimate of the costs your estate will incur when the time comes for a trustee to step in and establish what your estate is worth and how it will be distributed.  Click here for an example

This simple calculator makes 2 assumptions:

  • The deceased was either single or a widow/widower.
  • In the case of a widow/widower, at the time of their partner’s death, there was a tax-free rollover of assets to the survivor.
A. Income Tax Value Tax
RRSP / RRIF $_________ $_________
Non-registered capital assets $_________ $_________
Unreported interest income $_________ $_________
Unreported dividend income $_________ $_________
TOTAL $_________ $_________
B. Legal and Other Expenses
Funeral costs $_________ $_________
Court Fees $_________ $_________
Legal Fees $_________ $_________
Real estate commission $_________ $_________
Equity brokerage fees $_________ $_________
Trustee compensation $_________ $_________
TOTAL: A+B $_________ $_________

Thinking of Renovating? Some things to keep in mind

October 28, 2013 in Legal Advice Blog, Real Estate Blog


My fiancé and I renovated our kitchen this past summer. We took out the old one completely and replaced it. We had a reputable cabinet maker. We kept the same footprint. There was no new electrical or plumbing. The old kitchen was taken out on July 5th. We were told that the new one would take 4 days to install. 31/2 weeks later…

Our house is only 12 years old. We did not have to deal with the issues posed by much older houses. Since we started we have spoken with many people who have been through renovations of various kinds. Each one has a story to tell.

The rest of this article is a summary of the wisdom of those who have gone before,  for those who are thinking about undertaking their own upgrades.

Hire a Reputable Contractor

Hiring a reputable contractor is THE single most important step in the whole process. There will be unforeseen challenges and you want a contractor who will stay the course, not cut and run at the first sniff of a problem.

You want a contractor who is reliable and stays on schedule; one who does 1 job at a time, not 6.

This contractor will likely not give you the lowest quotation. There is a price for quality and reliability.

Get references and be sure to check them out.

Get a Contract and Plans

Take your time putting together a proper contract and proper plans. They should be as detailed as possible.

Leave as little as possible to chance or interpretation. In almost every renovation, you will want to changes the plans after you start and insofar as possible you want to avoid being hit with charges for extras.

Consider including an efficient dispute resolution mechanism. Construction lien litigation is not a good solution to disagreements.

Budget to Go Over Budget

Whatever the budget, allow 10-15% more.

When you structure payments keep the Construction Liens Act in mind.

  • Clearly define the work to be completed before a payment is made
  • Remember that you should hold back 10% of each payment for 45 days in accordance with the Act and only release it after your lawyer has searched to make sure no liens have been registered.

Depending on the nature of the renovation, you may require a certificate of completion from an architect or a project monitor at each phase before making a payment.

Finally, make your payments by way of cheque. Proper records are worth their weight in gold.

Be Prepared for Surprises

Especially with older homes, no-one can know for sure what you will find when the contractor gets behind the walls. Be prepared. As an example, friends of ours encountered a serious mold problem that was invisible until the walls were removed.


Many renovation jobs require permits. If yours does, make sure that you or your contractor get all the necessary permits and that you understand the role of a building inspector. I have heard stories from contractors of jobs being halted by building inspectors and the challenges of completing them thereafter.

Check the Subcontractors

No matter how reputable your contractor is, he is only as good as the tradespeople who actually do the work. In our case, the cabinet maker sent in an installer who started well but ended badly. He caused most of the delay and his carelessness required a cabinet maker to build most of our kitchen twice.


Keep your sense of humour.

P.S. We love the kitchen!

The foregoing is intended for information purposes only and is not legal advice.

All Insurance Policies Are Not The Same

September 18, 2013 in Legal Advice Blog

All Home Insurance Policies are Not the Same

This is a cautionary tale.

My friends lived in hotels for one whole year before getting their house back. They chose to use their own contractor instead of the contractor that the insurance company preferred. As a result, they paid the contractor directly, using savings or borrowed money.

The insurance company has made some payments to my friends, but only after long and protracted hassling.  Before they will pay the difference, the insurance company must come to an agreement with my friends on the value of the loss . They still have not settled.

What is Home Insurance?

In a nutshell home insurance is a policy you get to

  • cover losses of property contents
  • provide funds to repair damage caused to your property and
  • provide you with liability coverage should someone get hurt on your property.

There are a multitude of choices out there and they are all not created equal. Everyone needs home insurance in order to close a purchase or a refinancing.

Choosing the Right Insurance

I dare say that many people choose insurance on the basis of price alone. I suggest that this is a mistake. Certainly, cost is a factor. However, there are other equally important considerations, such as:

  1. What is covered?
  2. If some coverages are optional, what are the additional costs?
  3. What is excluded from coverage?
  4. What is the deductible should you have a claim?
  5. If you do have a claim, which insurance companies work with you and which ones present more adversarial challenges?

Insurance is an intangible. That is one of the reasons why people don’t like to pay for it. The contents of a policy are just so many words on a page — until something happens that gives rise to a claim. It is only then, when your coverage is put to the test, that you find out how good your coverage is.

My best advice to you is simple: do your homework. I also suggest that you seek out an independent insurance broker. Independent insurance brokers almost always represent more than one insurance company. They ask questions and can be very helpful sorting out the differences between policies. Pick the company and the policy and the coverage that best meets your needs. My best wish for you is also simple: that you pay for peace of mind and never have to make a claim.

The foregoing is intended for information purposes only and is not legal advice.

The Real Facts about Mortgage Pre-Approvals

July 15, 2013 in Legal Advice Blog

Mortgage Pre-Approvals

First, an observation: lawyers are trained to find the cloud around the silver lining.

Second, mortgage pre-approvals are a good thing. They allow you to know what you can afford when you go house shopping. They save both you and your realtor time.

If that’s the case, is there really a cloud to be worried about? The short answer is yes.

In today’s market, where multiple offers are a fact of life, many people do not include a financing condition in their offers because they have a mortgage pre-approval in hand. (They often do not include an inspection condition either, but that is a different topic). They go in firm. If the offer is accepted and the deposit is cashed, they have a deal.

The Cloud Around Pre-Approvals

Mortgage pre-approvals have 2 parts.

The first part is the pre-approved amount, which is what the Bank qualifies you for. It is the maximum amount that the Bank is prepared to lend to you, all other things being equal.

The second part is that the property which is to be the security, appraises at a high enough amount to keep the Bank comfortable. It takes a few days after an offer is accepted for the Bank to order and receive an appraisal of the property’s value. If the appraisal comes in lower than expected, the Bank will likely reduce the amount it is prepared to lend against that property.

If that happens your unhappy choices are:

  1. Come up with extra cash from your own resources (or relatives or friends);
  2. Get a second mortgage. If the Bank forbids secondary financing as many do, this will be problematic. Also, it will be expensive even if you can do it; or
  3. Walk away from the deal and in the worst case your entire deposit.

So before you find yourself in a jackpot, be conservative in your approach:

  1. Find out everything there is to know about your mortgage pre-approval from the lender;
  2. If you need extra money just in case, know how much you can expect to get and where it is going to come from; and
  3. Don’t pass on the financing condition unless it really doesn’t matter.

The foregoing is intended for information purposes only and is not legal advice.

What would you like to know more about? If you have a question that you think would make an interesting topic for a future article, please submit it to Garry.

Extending the Closing Date on Your Real Estate Deal

July 4, 2013 in Legal Advice Blog

Extensions on the Real Estate Closing Date

So here’s a scenario: You have entered into an Agreement of Purchase and Sale to buy a home. The closing date is fast approaching. You have a home of your own that you are trying to sell but for any one of a number of reasons, either the home hasn’t sold or you can’t get a closing date that coincides with the one for your new purchase.

Your realtor calls the realtor for the Seller to canvas the possibility of an extended closing….

I deal with this scenario frequently every year and offer the following thoughts to Buyers.

Bridging the Gap

The real estate market can be tough. If you’ve been in a bidding war to buy your new home, basically you gave the Seller what they asked for and that can include a firm closing date. But if the market hasn’t been kind, selling your old home has presented you with a few challenges. As a result you can’t close the sale of your old home before the closing date on the new one. Now you have to figure out your next move.

The first solution that comes to mind is bridge financing. The bank lends you short term money to close your purchase, to be repaid from the proceeds of the sale of your old home. This loan is usually unsecured (not registered on title). This option works if you have already sold your property and can show the lender when they can expect to be repaid.

But, what if you have not sold your property and your closing date is fast approaching?

A second option is to ask the bank for a blanket mortgage on both properties, the new one and the existing one. If this is a second mortgage, it will be discharged from both properties when it is repaid. The costs will be higher and you will have to qualify financially to get this mortgage because there is no fixed date for repayment and you may have to carry it for a while.

Asking for an Extension

If you are turned down by the bank and have no other source of money to close, you have no choice but to ask the Seller for an extension. The Seller can say no, which will put your deposit at risk. If they agree, they may impose some terms such as:

  1. Increase the deposit to an amount that would be “painful” to walk away from;
  2. Agree to be responsible for all expenses including taxes and property insurance from the original date of closing forward;
  3. Agree to reimburse you for all mortgage carrying charges from the original date of closing forward until closing;
  4. Agree to reimburse you for all of your bridging costs;
  5. Agree to release the deposit to you immediately if the closing does not happen on the extended closing date;
  6. Reimburse you for your additional legal costs;
  7. If you will have money left over to be invested, the Buyer may be asked to pay you a “lost opportunity” cost.

The foregoing are just points to ponder and are not legal advice. If you are faced with an extension of closing situation, consult your lawyer immediately. Every situation is different and proper legal advice and guidance is essential.

This article is for information purposes only. It is not meant to be relied on as legal advice.

Your Will – Part 2 – The Four Elements of a Will

June 20, 2013 in Legal Advice Blog

By Garry Cass

Wills are amongst the most misunderstood and underestimated legal documents that exist. The phrase I hear often, “It’s ONLY a Will” (dismissive), should actually be, “IT’S MY WILL” (important). Afterall, your Will is a statement of your last wishes and intentions for the disposition of your property.

A Will may be 30 years old and totally out of date with your reality, but if it is not updated before you die, it is still considered an accurate statement of your last wishes.

Elements of a Will

There are 4 elements of a Will:

  1. Choice of Estate Trustee (Executor)
  2. Disposition of Assets
  3. Beneficiaries
  4. Legalese

Each person who makes a Will has to think about 1, 2, and 3. There are no right choices or wrong choices, only individual choices based on personal circumstances.

The other point to remember is that no matter what, debts have to be paid in full before a beneficiary sees any benefit from your estate.

1. Choice of Estate Trustee

What does an Estate Trustee do?

The Estate Trustee is the one who

  • “steps into the shoes” of the deceased
  • transacts all of the business on behalf of the estate
  • is the “bookkeeper” for the estate, and
  •  is the one who is responsible for making sure all of the debts and taxes of the estate are paid and the rest is distributed to the beneficiaries.

The list of duties is long. Some duties occur in every estate. Some vary by estate. If an estate involves long term trusts, the Estate Trustee is most often the one who looks after these as well. In short, appointing someone to be your Estate Trustee gives that person a thankless job more than it bestows any honour.

Should you consider one Trustee or multiple Trustees?

The key considerations are:

  1. How complicated is the estate?
  2. Who is in the talent pool available to you?
  3. Does any one person have the time and the tools to do the job?
  4. If there is to be more than one Trustee, can they work together?

A substitute Estate Trustee should always be named if there is only one. Plan B may become important.

When is it time to look beyond family and friends? 

Administering estates can be both time consuming and complicated. Trusts can go on for a long time. Therefore, when deciding on your choice of Estate Trustee it is important to look carefully at your list of “suspects” and decide if they have the necessary time, skill and judgment. The person has to be young enough to outlive their duties. It is not wise to appoint someone who is in his/her 60s who may potentially have to administer trusts for 20 years.

Disposition of Assets

The general rule is that assets are liquidated unless a Will provides instructions to the contrary.

There are 2 kinds of assets to think about: personal stuff and investments/property.

For personal stuff, there are 3 ways to add them to your Will:

  • Include an itemized list with your Will
  • Prepare a non binding letter of wishes for your Estate Trustee
  • Leave disposition to the discretion of your Estate Trustee.

For property/investments the considerations are:

  • Are there particular assets that you want to leave to a beneficiary “in kind” ?
  • If that asset is significant (e.g. house, cottage, stock portfolio) is there enough left to satisfy the rest of your intentions and wishes?
  • Do you give a beneficiary the first right to buy an asset from your estate as opposed to leaving it as a gift? At full value? At a discounted value?
  • Do you want to make your kids business partners?


Beneficiaries can be just about any person or organization that you wish to leave a gift to. Beneficiaries can be relatives, friends or charities.

No beneficiary receives a gift from an estate before the estate’s debts and expenses have been determined and provided for.

What you leave to beneficiaries should be tackled using different considerations for each kind:

  • Charities
    • Which one(s)?
    • How much?
  • Friends, former employees, etc.
    • Who?
    • How much?
    • Is there a gift-over if any are dead?
  • Grandchildren
    • Do you leave a sum directly to grandchildren or rely on the parents?
    • If there is a direct gift, how much?
    • At what age is it to be paid?
    • Can it be used for any purpose before payout?
  •  Spouse
    • If you are in a relationship other than your first, is there a marriage contract to consider?
    • How do you intend to benefit your spouse, if at all?
    • With respect to a spouse, you also need to be aware of the family law legislation and the rights it confers.
  • Children
    • Do any of your children present special concerns such as: not good with money, unstable marriage, failing business, illness, disability?

Estate Shrinkage

It is very important to know approximately how much money you have to plan with.

  • Estates shrink.
  • Often final income taxes are significant.
  • Then there are additional expenses that may include: commissions, fees, Estate Administration Tax (probate fees in the old days), funeral expenses and Trustee compensation and accounting fees.

REMEMBER…. If you run into speed bumps, call your lawyer to discuss the obstacles. There is no need to have everything figured out before you make the appointment.

FINALLY….  Communication is key. This is definitely not the time to keep family secrets. When in doubt, ask. Passing intergenerational wealth is the most important family business there is.

The foregoing is intended for information purposes only and is not legal advice.

Estate Planning: Your Will – Part One

June 14, 2013 in Legal Advice Blog

Your Will – Part I – Intestacy

Let me start with a statement of the obvious: Everyone who has assets that will have to be disposed of after death, needs a Will.

Dying “intestate” means dying without a Will. Every jurisdiction has laws to deal with this. If you die without your Will in place, you place your loved ones at risk. The following outlines the likely outcomes.

Underage Children

In Ontario if someone who is married and has children dies intestate, his/her spouse is entitled to receive the first $200,000.00 of the estate and 1/3 of the rest. The other 2/3 goes to the children. Each child is entitled to receive his/her portion of the money at age 18 (hmm…).

The share for each minor child is safeguarded by a government office called the Children’s Lawyer.If money is needed to help pay a child’s expenses, it can only be  accessed by court order.

Suppose a couple owns assets jointly. When the first partner dies, all of the assets pass to the survivor (so far, so good). If the survivor then dies without a Will, there will be an intestacy and the applicable intestacy rules come into play (the ones referred to above are just a few of them).

Estate Administrators

Someone has to administer the estate but it can be difficult to decide who it will be. In the case of intestacy, a court order is required to appoint the Estate Trustee. Nothing can get done before the court appoints the estate administrator.

Even when everyone involved agrees on who should be the Estate Trustee, a Judge can still require that person to post a financial bond before he/she is appointed. These bonds are expensive and difficult to get.