Law Times

Law Times • February 11, 2013 Page 9 FOCUS New rules raise alarm among estates lawyers Law society changes include restrictions on testamentary gifts BY JUDY VAN RHIJN For Law Times P roposed changes to the Rules of Professional Conduct are causing angst in the estate bar because of a provision that restricts testators from recommending a legal adviser to assist with the administration of the estate. Senior lawyers are aghast that clients will lose the advantage of receiving advice from a lawyer who's already familiar with the assets, family dynamics, and other background issues that may be relevant. Ever since the Law Society of Upper Canada began studying the Federation of Law Societies of Canada's model code of professional conduct with a view to adopting it, estate lawyers have been unhappy with the restrictions on testamentary freedom that it includes. Of particular concern are provisions relating to testamentary gifts and benefits that state: • A lawyer must not include in a client's will a clause directing the executor to retain the lawyer's services in the administration of the estate. • Unless the client is a family member, partner or associate, lawyers must not prepare or cause to be prepared an instrument giving themselves or an associate a gift or benefit from the client, including a testamentary gift. • A lawyer must not accept a gift that's more than nominal from a client unless the client has received independent legal advice. Vincent De Angelis, chairman of the Ontario Bar Association's statutory review subcommittee, notes the Canadian Bar Association didn't recommend the changes. "You need a clear public policy rationale to restrict testamentary freedom, which includes the ability to choose the solicitor advising the estate, but no evil can be identified. There is no hazard." He confirms that at present in Ontario and across common law, people are generally free to put what they want in their will. "Unless there is a clear public policy reason for interference, like leaving dependants destitute, you are free to leave your property to who you want. You are free to choose your own executor and as part of that to choose the lawyer advising the estate." The CBA has its own code of conduct that says lawyers can't include a provision directing the executor to retain the drafting solicitor without express instructions from the client. "We have no issue with that," says De Angelis. "The wholesale prohibition of a recommendation to retain the drafting solicitor is the problem." He identifies continuity as the key benefit to the client. "It allows the drafter to assist with the administration. It's a desirable route giving access to better and more affordable advice. The testator will be forced to forego the comfort of knowing that a competent lawyer is advising the estate. The trustee of the estate will have to forego the significant value of the lawyer's background knowledge of the assets, intentions, and family history." De Angelis also worries about the extra expense to the estate in bringing the new lawyer up to speed. "They may be puzzled by the absence of a beneficiary. The drafting solicitor may understand why that clause was put in. Critical information might be missed or may not be transferred." Megan Connolly, who runs a resolution-based estate practice in Toronto, notes it's an interesting concept that someone who's dead wishes to continue to exert control. "They are planning for something and they are never going to know what happens but they like the comfort of knowing." She points out that although a will should be able to stand on its own, the estate administration doesn't just involve the interpretation of it. "You may need to apply for probate, pay debts, creditors, and taxes, realize assets, sell the house, deal with the contents, and liquidate investments. There may be a comfort in engaging the solicitor who drafted the will." Connolly has found people are intimidated by the role of executor, especially if they're not the only beneficiary. "They may have heard horror stories of beneficiaries coming back and complaining, so they want to do it exactly right." She also highlights the fact that executors are free to choose whoever they want to assist them. "When testators choose a lawyer, that provision isn't typically enforceable. You can't force someone to continue a solicitor-client relationship." Despite this, it's not unusual for trustees to engage the drafting lawyer. "A lot of people don't have may be situations where a an estate lawyer on speed dial. long-time solicitor may have They see your name on the been advising a client for will and call and ask if you will many years. There may be a do the estate administration." family lawyer, like a family If the proposed changes doctor, who may have a clicome in, testators may have to ent who wants to acknowlfind other ways of expressing edge that relationship. The their wishes. "There is no way lawyer can't accept more around it within the will," says than a nominal gift without De Angelis. "Outside the will, independent legal advice." the testator might indicate a While some wills can be preference in a letter or orally, very expensive, they cost a but the will is a safe, wellfew hundred dollars at the preserved document. The lower end. Connolly notes two-witness requirement and the testator may have to pay other protections ensure the someone else for the indetrue wishes are recorded and pendent legal advice or find negate claims of undue duress another lawyer to draft the or authority." will. "That may prove logistiIn relation to the restriccally difficult," she says. tions on gifts or benefits, De For the moment, the OBA Angelis says the issue isn't so much that the drafting lawyer 'The wholesale prohibition of a recommendation to is focusing on working with should be getting gifts but that retain the drafting solicitor is the problem,' says Vincent the LSUC working group. "The law society understands the wording is confusing. He De Angelis. we are giving practical input worries people could interpret it as precluding a solicitor from acting as executor and motivated by the clients' interests," says De Angelis. "The advice is coming from those who are most receiving compensation. Connolly agrees that the drafting is ambiguous connected with the problem and wish to provide the but she's not as worried about the situation. "It would best protection for testators. It will be difficult to igbe odd for a lawyer to be drafting a will for a client nore that advice given that it is consistent with the where there may be conflict issues. I suppose there law society's public protection mandate." LT TRUST you're putting your reputation on the line. It's all about trust well placed. LEONARD KUNKA | CRAIG BROWN | DARCY MERKUR Since 1936 Thomson, Rogers has built a strong, trusting, and collegial relationship with hundreds of lawyers across the province. As a law firm specializing in civil litigation, we have a record of accomplishment second to none. With a group of 30 litigators and a support staff of over 100 people, we have the resources to achieve the best possible result for your client. Moreover, we are exceptionally fair when it comes to referral fees. We welcome the chance to speak or meet with you about any potential referral. We look forward to creating a solid relationship with you that will benefit the clients we serve. YOUR ADVANTAGE, in and out of the courtroom. TF: 1.888.223.0448 T: 416.868.3100 W: www.thomsonrogers.com www.lawtimesnews.com ThomsonRogers_LT_Feb13_12.indd 1 12-02-07 2:07 PM

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