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"Someday" Isn't Soon Enough When It Comes to Estate Planning

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Our last blog featured a discussion of The Family War by Jordan Atin, Les Kotzer and Barry Fish, a great resource for determining matters that warrant careful consideration by estate planners.

There are certain warning signs that can become apparent during the creation of an estate plan, which need to be addressed to ensure the adequacy of the plan and to prevent, whenever possible, disputes involving the estate in the future. It is important that a planner know about the dynamics of a family. During initial meetings, a client will often answer that a family gets along, with no major issues of family dysfunction. If you dig deeper, however, weaknesses in family relationships usually do exist. An estate planner needs to know about the dynamics of a family, and to recognize when further inquiries should be made to uncover truths that may not surface otherwise until it is too late to address them.

After the death of a family member, it becomes much more difficult to manage relationships, especially when it is the family matriarch or patriarch, the "glue" that has held the family together, who passes away. For a family, this is a difficult time to begin with. Further, however, rifts that have percolated throughout a lifetime are most likely to come to the surface at this time.

Sometimes an individual will plan on creating an estate plan "someday." Neglecting the need for an estate plan can result in unmanaged family dysfunction, which is likely to lead to disputes that end up in court. Most people recognize that they need a will to manage their assets at death pursuant to their wishes, but procrastinate anyway. Fewer than four out of 10 Canadians have a will. In addition to procrastination and a general avoidance of the topic of death, are the common misconceptions that estate planning is only beneficial for the wealthy and the old.

No matter how much money is being dealt with by way of an estate plan, a will can assist in reducing taxation triggered by death and will help prevent conflict, which can arise with respect to any estate, no matter its size. There is no way of predicting when one's death will occur, and the problem with leaving a will for someday is that "someday" may never come. If "someday" does finally come, the would-be testator may be dead or mentally incapable.

While it may not necessarily be something that one looks forward to, seeing a lawyer about preparing a will should not be put off until it seems more pressing. Clients might not feel great going into the process of estate planning, but they will feel great once their affairs are organized. Moderated family estate planning meetings may be helpful in preventing disputes where the planner notices issues that are likely to become contentious.

When the administration of an estate becomes contentious, a lawyer should work with clients to find out what it really is that they want in the end. The objective need not be monetary or property-based to be real and achievable. When possible, it is preferable for a client to be engaged in the estate planning process. The same is true for estate litigation.

Approximately 90 per cent of estate disputes settle at the mediation stage. During mediation, clients are able to maintain control. At court, however, clients cease to have control over the situation, no matter how strong or weak a case may be. Predicting what will happen in front of a judge is impossible. Active participation in the collaborative process of mediation, in contrast, allows clients to come together and decide upon a solution. Sometimes the outcome is one that would not be considered in court. It is much less likely that a client will be comfortable with the outcome at court than at mediation.

It is important to remember that a party to an estate litigation matter is still related to the family members with whom he or she is fighting, and the family dynamics will continue to impact how the issues are dealt with going forward. Merely receiving an asset or payment that was desired may not suffice, absent a client's participation in, and comfort with, the resolution of the dispute.

Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.