Law Times

PAGE 10 Estates lawyers alarmed about new rules Model code introduces restrictions on gifts, retainer clauses FOCUS BY MICHAEL McKIERNAN Law Times T he Federation of Law Soci- eties of Canada' el code is under attack from s new mod- trusts and estates lawyers who say new rules aimed specifi cally at them are off the mark. Last December, the federation ratifi ed amendments to the code's provisions related to confl icts of interest. Th ey include three new subsections related to testamen- tary instruments and giſt s. But in a submission fi led last month, the Ontario Bar Association' and estates section urged the Law s trusts Society of Upper Canada to scrap two of them and amend the other one. It argues they're too broad and they restrict tes- tamentary freedom. Th e LSUC had put out a call for input to lawyers in this province before incorporating the federation' Don't miss out on your chance to reach 150,000 up-market GTA households Produced by Rules of Professional Conduct. Th e issue that raised the most s changes into its concern for the OBA was Rule 2.04 (37) that would prohibit counsel from including a clause in a client' ecutor to retain the lawyer's ser- s will directing the ex- vices again when it comes to the administration of the estate. Th e LSUC's professional regulation committee indicated it would accept the new rule, but gelis, who chairs the statutory reform committee of the OBA' trusts and estates section, urges people to think twice. He says it would have an "adverse impact on the testator' lawyer Vincent De An- s new lawyer to draſt the will and include a direction to the trustees to appoint the preferred counsel for estate administration, but that means incurring additional expense to bring the new person up to speed on the situation, says De Angelis. "People are free to retain their clients who wish to have their draſt ing lawyer involved in the distribution of their estate won't be able to say so. Alternatively, they can hire a s freedom" since by emphasizing to the trustees that they're not legally bound to follow the testator' choose counsel other than the one stipulated in the will, the submission. Th e LSUC also indicated its "Th ey have the fl exibility to " reads s wishes. support for the second provi- sion under Rule 2.04 (38) that would prevent lawyers from preparing instruments that give the lawyer or an associate a "giſt or benefi t from the client" ex- cept when the person is a family member, partner or associate. But De Angelis says the inter- pretation of the word "benefi t" could cause problems. "We don't have issue with the rule in terms of preventing giſt s to lawyers," he says. "Our con- cern is the word benefi t may be overly broad and may in eff ect prevent lawyers from acting as an executor. pensation for their work as ex- ecutors, it could be construed as a benefi t that would prohibit draſt ing lawyers from naming themselves as executor, accord- ing to the OBA submission. "Such a prohibition would Because lawyers receive com- " Untitled-2 1 Reach one of the legal and business markets in largest 12-09-10 3:27 PM counsel of choice in the admin- istration of their estate, so why should they not be free to make that choice known in the will?" he asks. Th e submission states there Canada! go well beyond the comprehen- sive statutory and common law scheme that currently outlines the limits on one taking under a will where he or she is a solici- tor: whether or not that solici- tor participated in the draſt ing or execution process. Th is is a fundamental change, the OBA submission. It recom- mends a tightening of the lan- guage in the rule. Th e fi nal provision under " reads should be restrictions on testa- mentary freedom only in situa- tions where clear public policy issues justify it, "such as where the provisions of a will are rac- ist, create a perpetual uncer- tainty about ownership or fail to provide appropriately for de- pendants." "In the absence of a clear pub- lic policy imperative, restrictions on client freedoms are inappro- priate, tators and trustees can actually benefi t from the continuity that a draſt ing solicitor can bring to estate administration. "Trustees With more than 179,000 page views a month and 31,000 unique visitors canadianlawlist.com captures your market The canadianlawlist.com features: — A fresh new look, designed for improved user experience — Effective new ways to reach the legal market — Gold and silver advertising packages For more information contact: Colleen Austin at 416-649-9327 or toll free at 1-800-387-5351 colleen.austin@thomsonreuters.com www.lawtimesnews.com CLL Online ad - 1/4 pg - 3X.indd 1 10/11/12 9:36 AM According to De Angelis, tes- " reads the submission. OctOber 22, 2012 • Law times Rule 2.04 (39) prevents law- yers from accepting more than a nominal giſt without the cli- ent receiving independent le- gal advice. Th e law society' professional regulation com- mittee had already rejected its adoption as unnecessary. Th e OBA agreed, noting it was equally applicable outside the context of testamentary instru- ments. "Including this sub-rule in s the testamentary section may cause confusion," reads the sub- mission. In the event that the LSUC benefi t of calling on trusted counsel who is familiar with the background of the testator and understands the family dynam- ics and assets involved, should have the "It prevents the trustees from tapping into that knowledge. Th e OBA submission says the " he says. " LSUC should remove Rule 2.04 (37) unless it can show "signifi - cant, objective evidence of mis- chief or abuses to be remedied and clear, articulated reasons to override testamentary freedom and other signifi cant rights." In that case, the OBA argues the problem could be overcome does adopt any of the testamen- tary model code rules, De Ange- lis urged it to make their applica- tion prospective only. "If the rules are applied ret- rospectively and you have wills where solicitors have draſt ed clauses where they appoint themselves as executors or direct the trustees to appoint them as solicitor for the administration, what happens? Do we now have to go back and reopen the will? Hopefully, that' tion, but it could very well create problems and require wills to be amended if it' s not the inten- late. You can imagine the logisti- cal nightmare that would create for clients and for lawyers." LT s not already too LEGAL RESOURCE GUIDE 0 1 2 Serving the Greater Toronto Area Online Print and in

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