The “wills exception” to solicitor-client privilege

Solicitor-client privilege means communications between a lawyer and a client, are confidential. Thus, if a third party wants to see what a client told their lawyer when seeking advice, the court will not allow this.

However, there exists a “wills exception” to solicitor-client privilege. That is, when a will is disputed, and it is not clear what the deceased intended, the court can order that key records be released.

The basis for this exception is that if privilege was simply rigidly upheld, this would prevent a court from seeing evidence which could shed light on the true intention of a testator for their estate.

Thus, for those with concerns about whether a will is valid, a key source of evidence can sometimes be found in the lawyer’s notes which were created when a Will was made. Such solicitors’ records will often be very persuasive as they are made contemporaneously by lawyers trained to look for capacity, and who stood to receive nothing under the estate.

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations. Copyright 2018 by the author. All rights reserved. 

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The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Who Approves Compensation for the Executors?

Typically, executor compensation will be governed in one of three ways:

  1. By a specific term in the Will, setting out a compensation percentage (these terms rarely exist however);
  2. By the agreement of the beneficiary (this is most common)
  3. If the beneficiary and executor do not agree, by a court order.

The vast majority of estates see beneficiaries consent to the compensation amount requested by the executor. The executor will first provide an accounting which sets out all of the transactions of the estate, so the beneficiaries can make sure they have no concerns. The executors will then often ask for a sum for compensation, and for their out of pocket expenses. Often, the beneficiaries will agree, and sign a consent.   

However, sometimes the beneficiaries feel that the compensation is too high for the work actually done. Or sometimes, there are minor (children) beneficiaries who are unable to provide capacitated consent. In these situations, the executor will need to go to court to seek court approval for their compensation. This approval should be given before the executor actually pays themselves anything.

How will the court fix the appropriate compensation:

There has grown to be a “rule of thumb” that an executor will receive a fee of 5% of the estate, as compensation for their work.

However, in estates which are very large, or, which were not specially complicated, courts routinely reduce compensation to below 5%. After all, 5% of a $2 million estate could be a huge amount of money, which may be too much compensation if the executor only dealt with a straightforward sale of farmland (often assisted by a lawyer).

In terms of the considerations that a court would examine, they include:

  1. The size of the estate;
  2. The care and responsibility required to administer the estate;
  3. The time occupied by the executor;
  4. The skill and ability displayed; and
  5. The success in administering the estate.

In short, before any executor “pays themselves” any fair compensation, be sure to first get written consent to the compensation from the affected beneficiaries. The last thing you want is to pay yourself a fee, and only then find there is a dispute, and perhaps you may even need to pay some of the money back to the estate.

 James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations. 

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Saskatchewan Estate Litigation Update: Leier v Probe, 2021 SKQB 41 – Removal of an executor for failure to account

A recent case from the Saskatchewan Court of Queen’s Bench reminds us of the importance to always account for transactions made acting as a power of attorney, or, as an executor.

Leier v Probe involved an application by Christopher Leier, to remove Barrie Probe, as executor of the estate of Christopher’s mother, Margaret Leier. Christopher also sought an order to compel Barrie to provide a full accounting of Barrie’s administration of the Estate to date.

The facts may be summarized as follows:

  1. On April 19, 2013, Margaret executed an Enduring Power of Attorney [POA] appointing Barrie Probe as the attorney;
  2. On April 24, 2013, Margaret executed a will, appointing Barrie as executor and naming her son Jonathan Leieras the alternate executor;
  3. Under the POA, Barrie managed Margaret’s personal and financial affairs from 2013 to her death in July 2019;
  4. After Margaret’s death, Christopher’s lawyer requested a final accounting of Margaret’s affairs and the decisions Barrie made in executing his duties under the POA. When Barrie did not respond, the Public Guardian asked him to provide an accounting;
  5. What documents Barrie did eventually provide by way of an accounting were muddled and incomplete;
  6. The documents appeared to show that Barrie had used Margaret’s funds for Barrie’s own gain. Further, Barrie was not adequately able to provide records explaining  these transactions:
  1. Barrie took money out of Margaret’s account as a loan to Barrie’s daughter for the purchase of a house and another withdrawal was to effect repairs and renovations to the property;
  2. There was another loan agreement dated November 27, 2016 for $15,000, executed by Barrie as POA in Barrie’s daughter’s favour;
  3. Barrie also paid his daughter’s legal fees by a cheque drawn on Margaret’s account;
  4. On June 6, 2017, Barrie wrote himself a cheque for $50,000 drawn on Margaret’s account and another on June 9, 2017 for $120,000;
  5. There were numerous examples of accounting haziness for which Barrie had not offered explanations:
  1. Margaret’s credit card statements show that from August 20, 2016 to February 19, 2017, Barrie charged over $17,000 in purchases at stores such as The Home Depot, Fries Tallman Lumber, Rona, Canadian Tire, Kal-Tire, and Regina Battery Depot;
  2. In addition, for this time frame, Barrie drew cash advances of at least $1,100 on Margaret’s credit card without explanation;
  3. Margaret also owned a home on Salt Spring Island in British Columbia. Barrie stated that he spent possibly $20,000 on water and sewer issues on the house but did not adequately explain those repairs. The August 24, 2020 order directed he do so, but Barrie only provided documentation for invoices totalling $7,198.82;

The Court characterized the above as only a “small sample of discreet transactions that I find concerning or questionable”. In total, Christopher deposed that from 2013 to Margaret’s death in 2019, Barrie caused over $1,358,000 to be withdrawn from her account in the form of debit transactions, cheques, cash withdrawals or transfers.

In addition to the above transactions, the Court found  that Barrie had not faithfully fulfilled the terms of the Will.  Margaret stipulated that three of her four children were to receive $25,000 for their use absolutely. However, in relation to the share of one son, David, Barrie did not give him the $25,000 bequest.

David deposed that Barrie told David his share would be invested but he did not provide details. David said Barrie told him he would receive “a sum” every month. Since April 2020, David said he had received only $800.00. Such conduct by Barrie was not a proper distribution under the Will.

Removal of Barrie as executor:

Christopher argued that Barrie should be removed, as his conduct as Margaret’s POA prior to her death showed a lack of reasonable fidelity.

The Court held that if this were a situation that could be resolved by a simple disclosure of accounting records, an application to have Barrie removed was premature.

However, Christopher had already sought an accounting, and obtained disclosure orders against Barrie. In response, Barrie had simply failed to properly account for his transactions.   As such,  it appeared that no further court orders for disclosure would assist anything. Barrie had already had his chance to “explain” his transactions, and the reality was  that he simply could not explain many large transactions.

The Court concluded that Barrie had shown incredibly poor insight into his responsibilities as a POA.

The Court therefore found an adequate basis on which to remove Barrie as executor:

[23]           Barrie’s abdication of his accounting responsibilities relating to Margaret’s bank and visa accounts, together with the amounts withdrawn from those accounts are enough to raise red flags. His declared understanding of his responsibilities as executor of Margaret’s will (that he could invest the bequests as he saw fit rather than distribute them as Margaret directed) are further indicia of a lack of proper capacity to execute his duties and a want of reasonable fidelity.

[24]           While most of the evidence of a lack of fidelity relates to Barrie’s responsibilities as a POA, I find that it is enough to cause grave concerns as to Barrie’s capacity to execute his duties as executor. I am satisfied that the evidence here reveals Barrie’s want of the proper capacity to execute his duties and/or a want of reasonable fidelity as in accordance with the legal principles set out above. In my view, I am satisfied it is in the best interest of the estate that he should be removed as the executor of the Estate and I so order.

In summary, the Court ordered the below:

  1. Barrie was removed as the executor of the Estate;
  2. The Court revoked the letters probate and granted administration de bonis nonwith will annexed. It was ordered that Jonathan Leier be appointed as executor of Margaret’s estate without bond, and failing him, Christopher would act;
  3. Barrie was to prepare a full accounting of his administration of Margaret’s estate from the date of her death to the date of this order; and
  4. Barrie was ordered to personally pay the costs of this action to Christopher.

Lesson learned:

Leier offers a valuable reminder of the importance to always act in the interest of the grantor, or the deceased. If you act as power of attorney, or executor, you should never use the assets of the estate for your own self-interest. Moreover, executors and powers of attorney should also avoid co-mingling of funds (that is, personal monies with monies belonging to the adult).

If you do the above, and cannot provide a legitimate basis for your actions, you may well be removed from your position, and face stiff costs penalties.

 James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or j.steele@rslaw.com. The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations. 

Robertson Stromberg announces the launch of the SK Estate Law blog

We are pleased to announce the launch of our new Estate Law blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents.

The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Check out the blog here and join the discussion.

 

Estate Litigation Update – Thorne v Thorne

A recent case of the Saskatchewan Court of Queen Bench offers the following lesson: the Court’s power to “fix” clerical mistakes in Wills, may not necessarily be ordered if there are deeper concerns about the testator’s actual testamentary intentions.

Section 37 of The Wills Act, 1996,  SS 1996, c W-14.1, allows the court to “cure” Wills which have certain flaws in them. Such flaws may include the wrong number of witnesses or some other formality that is missing.

The provision is set out below:

37    The court may, notwithstanding that a document or writing was not executed in compliance with all the formal requirements imposed by this Act, order that the document or writing be fully effective as though it had been properly executed as the will of the deceased or as the revocation, alteration or revival of the will of the deceased or of the testamentary intentions embodied in that other document, where a court, on application is satisfied that the document or writing embodies:

(a) the testamentary intentions of a deceased; or

(b)  the intention of a deceased to revoke, alter or revive a will of the deceased or the testamentary intentions of the deceased embodied in a document other than a will.

[Emphasis added]

In Thorne, Keili Thorne had applied for a declaration, under s. 37 of The Wills Act, 1996,  SS 1996, c W-14.1, that a document signed by Richard  Thorne (in early October 2014) was fully effective as though it had been properly executed as the will of Mr. Thorne. 

The will had been signed in front of two witnesses, but only one of those witnesses signed the document to indicate that he witnessed Mr. Thorne’s signature. Ordinarily, this application would be a simple matter, and the Court would most likely have cured the Will under s. 37.

However, this particular application was opposed by Lia Tanit Thorne and Brendan Johnston Thorne. Tanit and Brendan argued that the Will had suspicious circumstances regarding Mr. Thorne’s testamentary capacity at the time that he signed the document.

The Court’s decision:

The Court acknowledged that the document looked and read like a will. However, the Court held that s. 37 also requires the court to be satisfied that the document actually sets out the testator’s final testamentary disposition.

The Court recognized that Tanit and Brendan had raised a number of concerns about the testator’s behaviour in 2014:

  1. Prior to signing the document, Mr. Thorne had intended to benefit all three of his children equally. The document he eventually signed did not do that;
  2. There was evidence (including evidence of people other than the parties) of Mr. Thorne’s positive ongoing relationship with Brendan;
  3. Gwenda (testator’s sister) recounted estate planning discussions with Mr. Thorne in which he planned an equal distribution of his estate among his three children.
  4. There was evidence suggesting that, around the time that he signed the document, Mr. Thorne faced challenges as to his mental acuity. In his November 14, 2014 email to Gwenda he wrote:

I’m beginning to think we never finished the POA. What we did when she was here was I made her co-administrator of my Honduran Corp. which owns all my assets here. She has the power to sell if she wants. She also has a bunch of signed cheques so she can access the money in my accounts.

But then again I’m not sure. I may have signed some stuff. Sheeeshhh..

  1. There was no evidence before the court (other than the document itself) as to Mr. Thorne’s testamentary capacity or intentions at the time that he signed the document;
  2. There was no evidence before the court as to the circumstances surrounding the preparation and signing of the document. The court does not know who prepared it, or on whose instructions.

The applicant provided rebuttal evidence, as to show that Mr. Thorne did manifest an intent to make the applicant his sole beneficiary. However, the Court felt faced with a conflict on the evidence as to just what Mr. Thorne truly intended. The Court felt that it was premature for the Court to make a binding determination on the basis of the affidavit evidence before it:

[19]       There remains, though, the evidence supporting the opposite conclusion. The respondents have provided good reasons for doubting that Mr. Thorne had testamentary capacity when he signed the document. In particular I note his long-term plan to benefit all three of his children, the unexplained circumstances surrounding the preparation and signing of the document, and Mr. Thorne’s own expressed uncertainty as to what he had signed.

[20]       Possibly it is simply a matter that Mr. Thorne had had enough of the respondents and had decided to leave everything to the applicant. There are, however, too many outstanding questions surrounding Mr. Thorne’s signing of the document for me to be satisfied with respect to s. 37(a). That is, while I recognize the possibility that Mr. Thorne had testamentary capacity, so that the document embodies his testamentary intentions, I am not satisfied that it is the case. The question cannot be determined only on the evidence that is before me. [emphasis added] 

Therefore, the Court ordered a trial of the issue of whether the document is Mr. Thorne’s will. The applicant, as proponent of the will, would bear the onus of proving the will. The Court awarded the costs of both parties, for this application, out of the Estate.

Lesson:

S.37 is a useful tool to help ensure that a document which embodied the testamentary intention of a deceased, will not fail simply due to an oversight of some formality (i.e. not enough witnesses, etc.)

However, Thorne reminds us that the s. 37 power is not a rubber stamp if there are underlying concerns with the testamentary intention of the testator. Thus, if the Court finds real doubts raised of incapacity or suspicious circumstances, the Court may refuse to “cure” the document until such issues are resolved at trial.  

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, issues surrounding executors, joint account disputes, etc. For more information on this subject, contact James Steele at 1 306 933 1338.

The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations. 

Area of ExpertiseWills, Estates, Trusts, Health Care Directives and Powers of Attorney