The First Appointment
Receiving instructions from clients and providing advice to them in response to those instructions is at the heart of a Wills and Estate Planning practice. Developing standard practices for an initial client interview, file opening procedures and the commencement of work will serve the practitioner well for the duration of his or her practice. Sloppy or inconsistent procedures, incomplete information gathering or poor file management can lead to significant problems, particularly if some aspect of the client’s estate planning is challenged in the future. The purpose of this paper is to outline the key considerations and suggested procedures to follow during the first appointment with an estate planning client, as well as those considerations and procedures that may be important leading up to, and following, the appointment.
I. The Role of the Lawyer
The role of a lawyer with an estate planning practice is not just to take instructions and prepare a will. The term “estate planning” implies much more than this. While clients often know what they want, they do not always know or fully understand the legal effects or potential consequences of their decisions or wishes. A wills and estate planning lawyer will often have to provide holistic advice about their client’s possible estate plan, which could include, for example, advising as to the need for a power of attorney and representation agreement, or providing information about wills variation legislation that could be invoked by a disinherited child, or identifying corporate, tax or family law issues that require further consideration.
One of the most important roles that a wills and estate planning lawyer plays is as a keeper of records and future possible evidence. It is crucial that the lawyer be clear in his or her communications with the client, both written and oral, confirm instructions in writing, keep detailed file notes, and draft estate planning documents clearly and without ambiguity. If a dispute arises in the future as to the will-maker’s state of mind, wishes, mental capacity or instructions, the memory of the lawyer and the memory of the witnesses to the execution of the documents will likely be foggy at best. Being clear in your documents, communications and notes from the outset will mean that you have to rely less on your memory and can depend more on the facts in your file.
As in any practice area, it is essential that a wills and estate planning lawyer know the relevant law. However, unlike many practice areas, wills and estates is one of few practice areas where advice is given and documents are drafted currently, but the legal effect of that advice and those documents may not be tested for many years. In other words, while an estate plan may be perfectly prepared, drafted and implemented in 1995 under the law applicable at that time, if the client does not die until 2015 (and has not revoked his 1995 will), there may be certain aspects of the law that have changed in the twenty intervening years to have made portions (or perhaps the whole) of the Will no longer effective in light of the client’s original wishes. It is important for a lawyer to have an understanding as to how the law has changed so that he or she can advise the clients accordingly.
The following is a summary of some of the current legislative provisions that are crucial for wills and estate planning lawyers to be intimately familiar with when advising clients:
- Wills, Estates and Succession Act [SBC 2009] c. 13 (“WESA”)
- Definition of Spouses: Section 2 of WESA provides that two persons are spouses if they are married to each other, or have lived in a marriage-like relationship with each other for at least two years. Subsection 2(2) provides that two persons cease being spouses of each other if an event occurs that causes an interest in family property under the B.C. Family Law Act to arise, or if one or both persons terminate the marriage-like relationship. As spouses are entitled to certain benefits under WESA, it is important for clients to understand the circumstances under which they have a spouse, as well as the circumstances under which they may cease to have a spouse. For example, a gift to a spouse is automatically revoked under subsection 56(2) of WESA when the individuals cease to be spouses of each other, which might not always be the intention of the will-maker. Note that it is possible under WESA (though probably rare) to have more than one spouse at a time.
- Survivorship Rules: Subsection 5(1) of WESA provides that if two persons die at the same time, unless there is a contrary intention, rights to property must be determined as if each had survived the other. Subsection 5(2) of WESA provides that joint tenancies are converted to tenancies in common if the parties die at the same time.
This can have significant effects both in terms of taxation and results of inheritance. Clients should be advised of the potential consequences.
Subsection 10(1) of WESA sets out the five-day survival rule – if a person does not survive the deceased person by five days, the other party is deemed to have died before the deceased person for all purposes affecting the estate of the deceased person.
- When Gifts Cannot Take Effect: Section 46 of WESA sets out the rules for lapsed and void devises and bequests.
- If Assets Aren’t Sufficient: Section 50 of WESA sets out the order in which assets are reduced to pay the debts of the estate if the residue of the estate is insufficient to cover such debts.
- Revocation of Gifts: Subsection 56(2) of WESA sets out the circumstances under which gifts in a Will may be automatically revoked, such as, for example, upon ceasing to be spouses.
- Wills Variation Provisions: Sections 60-72 of WESA set out the Wills Variation provisions which were formerly contained in the new defunct Wills Variation Act. These rules can be invoked by children and spouses of deceased individuals who feel that they were not adequately provided for. The potential effects of these rules should be fully explained to all clients, particularly those who are not providing for their spouse or children in a typical fashion.
- Marriage no longer revokes a Will. It is worthwhile to note that, unlike its predecessor legislation, WESA does not provide that a marriage revokes a Will. Under the old law, it was common for individuals to be unconcerned about drawing up a new will after getting married, since they knew that the marriage had revoked their previous will, and that the rules of intestacy would then apply to provide for their new spouse. This is no longer the case, and it is therefore important for newly married individuals to make new wills either before or immediately following their marriage to ensure that their spouse is provided for as intended.
- Income Tax Act (Canada)
- An individual is deemed to dispose of all of his or her property immediately prior to his or her death for proceeds equal to fair market value. This triggers capital gains (and therefore tax) on any assets beneficially owned by the individual at the time of his or her death.
- An individual is deemed to dispose of all of his or her property immediately prior to his or her death for proceeds equal to fair market value. This triggers capital gains (and therefore tax) on any assets beneficially owned by the individual at the time of his or her death.
- This deemed disposition is deferred where assets are left to a surviving spouse. In that case the deemed disposition does not occur until the death of the spouse.While it is not essential for a wills and estate planning practitioner to be an income tax expert as well, it is crucial for the estate planning lawyer to understand the basics of taxation on death. The two main principles are as follows:
- This deemed disposition is deferred where assets are left to a surviving spouse. In that case the deemed disposition does not occur until the death of the spouse.
- B.C. Family Law Act
- Determining Parentage: Sections 20-33 of the Family Law Act set out the provisions by which parentage is determined in BC. This may impact who inherits property from the deceased under an intestacy or under their Will, as parentage is determined by statute not by whom the individual may consider to be his or her rightful child.
II. Preliminary Information Gathering
A. Conflicts Search
As with any new client, it is essential to follow standard conflict search protocol before receiving detailed instructions or providing advice. To be thorough in this, it is useful to get from the client his or her full legal name, as well as any variations, short forms, nicknames or former names that he or she goes by or has formerly been known as. It is often prudent to obtain the names of the client’s spouse, parents and children at the same time and run those through the conflict search as well. If your firm has previously acted for the parents of your potential client (perhaps in some estate planning or corporate work which prejudiced your client), searching the name of your potential client only may not flush this out, but searching the name of his or her parents will.
B. Estate Planning Questionnaire
Most wills and estate planning lawyers find it extremely useful to have a standard form estate planning questionnaire which they can provide to new clients before the initial meeting. The purpose of the questionnaire is to have a form by which the client can communicate much of the basic information to the lawyer (for example, correctly spelled names of family members and beneficiaries), but can also be a starting point for the communication of instructions (for example, a listing of cash gifts that the client would like to make to friends, family and charities upon his or her death). The questionnaire may serve as the first opportunity for the client to really turn their mind to their estate planning and with any luck, between the well-crafted questions in the questionnaire and the lawyer’s well-crafted checklist at the initial meeting, all necessary details of the client’s circumstances will be flushed out. It is usually useful to have this questionnaire returned to the lawyer in advance of the meeting, so that the lawyer has time to review it and consider any issues that it raises.
A completed questionnaire may also highlight certain red flags for the lawyer as well, such as residency of the client or his children, real property held out of the jurisdiction or an ownership interest in a private company. All of these issues will need further investigation by the lawyer in the meeting (or through follow-up communication) and are useful to know before moving forward.
C. Meeting Pre-Requisites
The lawyer, or his or her assistant, should communicate to the client certain points about the meeting, such as what he or she should bring to the meeting. It will always be advised that the client bring photo identification so that the lawyer can comply with the client identification requirements of sections 3.91 to 3.102 of the Law Society Rules. It will also be helpful if the client brings all relevant documents with him or her to the first meeting. This will usually include his or her current will (if any), certain corporate documents (such as shareholders agreements), marriage or co-habitation agreements, separation agreements, court orders, and so on.
It is also important to communicate to the client the financial consequences of the meeting. Will you require a retainer fee at the time of the meeting? Will you charge the client your hourly rate for the initial appointment, payable at the time of the meeting? Will you bill the client later for the meeting? Clearly communicating this to your potential client in advance of the meeting, preferably in writing, will help to alleviate collection issues in the future when the client may claim that he thought the initial consultation was free or that he did not know what your hourly rate was.
D. File Review
If the proposed client is a current or repeat client of you or your firm (either because of previous estate planning work, or because the firm has provided some other service to him), you should review the file, and in particular, any previous wills, instructions or relevant documents before the meeting. This will help you to have a better picture of the client and his or her situation in advance of the meeting, making you better prepared to provide proper advice. It also helps you to avoid looking foolish if, for example, you ask the client whether they own any shares in a private company while your firm has been doing their corporate work for twenty years! Doing your homework makes your job easier and will hopefully strengthen the relationship between your firm and the client.
E. Retainer Letter
In some circumstances, it may be appropriate to send a retainer letter to the client prior to the first meeting. This can include a broad statement of being retained to provide estate planning advice and should set out the billing terms (i.e. hourly rates, flat fees, etc.). This will provide a foundation to ensure that you have a basis to get paid for the time spent meeting with the client even if the client does not end up retaining you to prepare any documents or provide any further advice.
If acting for more than one client (for example, a husband and wife) you should make sure that you comply with the “Joint Retainer” provisions of rule 3.4-5 of the Code of Professional Conduct for British Columbia. This provides that:
“Before a lawyer is retained by more than one client in a matter or transaction, the lawyer must advise each of the clients that:
(a) the lawyer has been asked to act for both or all of them;
(b) no information received in connection with the matter from one client can be treated as confidential so far as any of the others are concerned; and
(c) if a conflict develops that cannot be resolved, the lawyer cannot continue to act for both or all of them and may have to withdraw completely.”
The commentary on this rule is particularly instructive:
“A lawyer who receives instructions from spouses or partners to prepare one or more wills for them based on their shared understanding of what is to be in each will should treat the matter
as a joint retainer and comply with rule 3.4-5. Further, at the outset of this joint retainer, the lawyer should advise the spouses or partners that, if subsequently only one of them were to
communicate new instructions, such as instructions to change or revoke a will:
(a) the subsequent communication would be treated as a request for a new retainer and not as part of the joint retainer;
(b) in accordance with rule 3.3-1, the lawyer would be obliged to hold the subsequent communication in strict confidence and not disclose it to the other spouse or partner; and
(c) the lawyer would have a duty to decline the new retainer, unless:
(i) the spouses or partners had annulled their marriage, divorced, permanently ended their conjugal relationship or permanently ended their close personal relationship, as the case
(ii) the other spouse or partner had died; or
(iii) the other spouse or partner was informed of the subsequent communication and agreed to the lawyer acting on the new instructions.”
It should also be noted that rule 3.4-7 of the Code provides that when a lawyer has advised the clients pursuant to rule 3.4-5 and the parties are content that the lawyer act, the lawyer must obtain their consent. The commentary indicates that written consent is required in this case. The rules contained in 3.4-8 to 3.4-39 of the Code address how to deal with a conflict once it has arisen.
III. The Client Interview
For some clients, meeting with a lawyer or discussing their estate planning can be stressful and intimidating. Creating an environment of trust and respect will assist in strengthening the solicitor-client relationship. Not only will the client feel more at ease, but the lawyer’s job may actually be easier if the client feels comfortable in the initial interaction.
A. Preliminary Administrative Issues
It is often useful to get administrative issues out of the way at the beginning of the meeting so that they do not fall between the cracks later on. The lawyer should start by reviewing the client’s photo ID and arranging for a photocopy to be made for his or her file. Ensuring compliance with the client identification rules set out in the Law Society Rules is essential. In many cases, an estate planning lawyer will not be involved in a “financial transaction” (as defined in the Law Society Rules) with an estate planning client and therefore may not be required to comply with the client verification rules. It is important to know when these apply, however, and when in doubt, comply with them from the outset out of an abundance of caution.
At the same time, the lawyer should ask the client (or confirm with the client, if such information was obtained prior to the meeting) about the client’s legal name, alternate names and former names and record those for the file. This information will come in handy when later performing searches for assets, confirming registration of assets, and in ensuring that the client is properly referred to in the estate planning documents.
Another preliminary issue to raise at the outset is to determine the level of urgency required for the implementation of the proposed estate plan. Although, arguably, all estate planning is urgent to a certain degree, since no one knows when they will die or lose the necessary capacity to make a will, if the client is terminally ill or about to leave on vacation, the urgency is heightened. If the lawyer cannot comply with the timeline required to complete the planning, he or she should decline to act from the outset and refer the client to other lawyers where appropriate.
Similarly to the principles behind an estate planning questionnaire, many lawyers find it useful to have a standard checklist at all initial estate planning client meetings so that no pertinent questions or issues are inadvertently missed or forgotten. Such a checklist, properly completed and annotated where necessary, can be a great asset to the lawyer’s files, when memories fail or planning is later challenged. The checklist should not take the place entirely of thorough notes taken by the lawyer during the meeting, but the two items taken together will hopefully provide a full picture of what was discussed. The law society has a sample checklist on their website under the “Practice Checklists Manual” section, entitled “Will-Maker Interview”.
B. Obtain Personal and Family Information
After the preliminary administrative information gathering is out of the way, it is often useful to move next onto obtaining the client’s other personal and family information. This information may have already been communicated via the estate planning questionnaire, and some of it may have raised certain red flags for the lawyer which will lead to further investigation with the client at the meeting. In any event, these issues should be reviewed and confirmed in detail at the meeting. Clients often want to launch right into their instructions and wishes. Taking the time to get a proper history and understanding of their particular circumstances first will mean that the lawyers can provide better advice.
Many aspects of personal information will have practical consequences, such as foreign residency or citizenship. For example, a Canadian resident client who has lived in Canada all of his life but who holds dual citizenship with the U.S., will have significant U.S. tax and estate planning issues that need to be considered together with his Canadian estate plan. If the advising lawyer does not have this expertise, it is essential that he or she advise the client of the potential issue and refer the client for specialized advice. If citizenship is never raised or questioned, either in the questionnaire or in the meeting, the lawyer may proceed to implement an estate plan which works perfectly well for Canadian purposes, but may put the client (or his future estate) in a difficult spot for the legal consequences which may arise in his country of citizenship.
Other aspects of personal information will have an impact on how the estate plan should be put in place, such as terms agreed to under a separation agreement, a marriage agreement or a shareholders agreement. For instance, if under the terms of a separation agreement the family recreational property is held by the former spouses as tenants in common, but it is agreed that such property will pass to the children upon the death of each former spouse, the client’s new will should not leave that property to a new spouse.
Details of former marriages, common-law relationships, divorces and separations are also useful to know in order to fully advise the client as to the effect and potential consequences of his estate planning. In certain circumstances, it is possible for a person to have more than one spouse at a time, which could give rise to a wills variation action by a spouse who has been left out of the estate planning. Proper questioning by the lawyer should flush out this information so that proper advice can be given.
In some cases, a person may claim to be a spouse of the will-maker after the death of the will-maker. This sometimes happens unfortunately in situations where a vulnerable elderly individual has a companion or caregiver whose role in the life of the will-maker is in a gray area. If such person makes a wills variation claim after the death of the will-maker, the lawyer’s file notes as to the will-maker’s relationship with that person may be important evidence to help determine whether the two were living together in a marriage-like relationship prior to the death of the individual.
Many modern blended families have stopped thinking of their children (or grandchildren) as “mine”, “hers”, or “his”, and rather have just lumped all of them together as “ours”. From a legal perspective, however, leaving assets to your “children”, will include only the will-maker’s naturally born or adopted children, not step-children. This may not have been what the will-maker intended and it is therefore important for the lawyer to ask the right questions in order to fully understand the make-up of the family. Only in this way can the lawyer accurately draw up an estate plan to property reflect the wishes of the client.
Another difficult area of personal information inquiry involves estranged children. This becomes particularly difficult where the lawyer may be acting for a husband and wife with respect to their estate planning and, for example, one spouse has knowledge of a biological child which he or she has not told his or her spouse about. The lawyer’s role in this situation, absent any specific knowledge of the situation, may be just to advise the clients about the reach of wills variation provisions (i.e. that all biological children (even those who have never been acknowledged) have wills variation rights) and that the form of drafting in the will (i.e. “to my children”) would include such biological but unrecognized children.
It is also important to dig into the issue of whether any of the client’s children, grandchildren or other dependants are under any legal disability or are incapable. In such cases, wills and estate plans may have to be carefully drafted to protect such beneficiaries and their inheritances. Terms of testamentary trusts will have to be carefully considered so that entitlement to provincial disability payments are not disturbed. In addition, potential beneficiaries with addictions or other vulnerabilities may require certain protections in the estate plan as well. It is important for the lawyer to explore these special circumstances with the client during this planning phase so that the terms of the estate plan can match the needs of the beneficiaries.
Just as the citizenship and residency of the client may affect the estate planning advice given, the residency and citizenship of their potential beneficiaries may affect the form of the estate plan. It is becoming increasingly more common for children to relocate and settle in other countries, and depending on the laws of such jurisdictions it may be preferable for beneficiaries to receive their inheritance in a different format (e.g. outright, rather than through a trust, or vice versa) than would be recommended under the same circumstances to a child who is resident in and a citizen of Canada. These details should be examined when discussing family circumstances.
C. Obtain Financial Information
Once the lawyer has a good handle on the client’s personal and family circumstances, they should then explore the client’s financial circumstances. This includes obtaining details of the client’s occupation and income, pensions, life insurance policies, registered accounts (RRSPs, RRIFs, etc.), and bank accounts (including GICs and TFSAs). These details will help the lawyer to get a better picture of not only the assets available for distribution through the estate, but also the availability of funds to pay the debts of the estate, the most significant of which is often taxes arising at death.
Details of the client’s other assets should be discussed, including real property (e.g. principal residence, income producing and recreational), personal property of value (e.g. including artwork, furniture, jewelry, automobiles, etc.) and business interests (e.g. proprietorships, shares in private corporations, partnership and joint venture interests). Particular attention (and follow-up) should be paid to how such assets are owned. It is not uncommon for a client to believe that he owns a revenue property and wants to leave that specific property to his son. On further examination, the lawyer may discover that the client actually owns a 90% interest in a private company which owns the revenue property and that it would therefore be ineffective to provide in the client’s will that the property be left to the son. Clients frequently misunderstand or fail to appreciate the difference between corporately held assets and personally held assets and what they do and do not have control over at the time of their death. For instance, a client may believe that he holds sufficient liquid assets to cover the tax arising at death, while in fact those assets are owned by a company of which the client is the sole shareholder. Getting those assets into the estate to pay the tax will create tax issues itself. To the greatest extent possible, the lawyer should request back-up documentation and do public searches where appropriate to confirm or challenge the information provided by the client.
If clients own assets in other jurisdictions, the laws of that jurisdiction may dictate or impact how the asset can be passed on death. It is therefore important not only to know what the client owns, but where the assets are situated. In addition, property may be held in joint tenancy (therefore passing to the surviving joint tenant by the rule of survivorship) and therefore not be available to be dealt with under the client’s will. All aspects of ownership and details of the assets should be discussed at the meeting and confirmed with back up support if necessary.
If the client has business interests (through a proprietorship, corporation, partnership, joint venture, etc.) the lawyer should request copies of the business records to confirm the nature of the interest held. In some cases, this might also require review of a shareholders’ agreement or partnership agreement to determine if there are any obligations on the estate following the death of the individual, such as for example a mandatory buy-out clause. In many cases, a client may not understand the nature of the interest he holds (e.g. various share classes with varying rights and values) and may therefore inadvertently leave, for example, voting shares with nominal value to one child, but non-voting value shares to another, contrary to his intentions. It is prudent for the estate planning lawyer to ensure that the client understands what he owns and what the consequences of distribution under his estate plan will mean.
It is also important to obtain details of the debts owing by the client. This would include, for example, not only registered mortgages, but private debts to other individuals, or shareholder loans owed to a company. This again assists the lawyer in understanding the bigger picture of how the estate will play out. It is not uncommon for some clients to have the erroneous belief that all debts disappear when they die. If their estate plan purports to give away all of their assets without taking into account the debts to be settled, there may be many disappointed beneficiaries.
The client may also have an interest as a beneficiary of another trust or estate. He or she may understand that interest to be absolute and vested (and therefore capable of being passed along through his own estate planning) whereas in fact it may be discretionary and limited (e.g. passing on the terms of the instrument after the death of the client, rather than pursuant to any action taken by the client). The estate planning lawyer should review the governing documents of such trust or estate to fully understand the nature of this interest so that he can advise his client to the best extent possible.
D. Specific Instructions From The Client
Once a complete discussion about the client’s personal, family and financial circumstances has been had, it is time to move forward with a discussion of the client’s instructions and estate planning wishes. A good place to start is with an discussion about the role of the executor and guardian (where applicable).
Choosing an executor for their estate and a guardian for their minor children are often the most difficult decisions for clients. In many cases this is because they feel that there are no appropriate options. In other cases, particularly where couples are making the decision together, it is because they disagree on who should be appointed. It is the lawyer’s job to provide advice as to the considerations to be made when making this decision and providing some pros and cons of potential decisions, for example:
- How old is the proposed executor? Is he too young and inexperienced to handle the task? Is she too old to want to take it on? If you don’t revoke your will for many years, will this person still be of an age to realistically take it on? In most cases, naming your 20-year old son or your 80-year old mother may not be the best decision, but all circumstances are unique.
- Out of fairness, a client may want to name all of her five children as co-executors. She should consider the quality of the relationship among her children and whether having all of them act will be a hindrance notwithstanding that one or more of them may feel slighted at being left out. In other circumstances, naming only one executor may put too great a burden on the particular named individual, and it may be preferable to have two or more acting together.
- Your husband and wife clients may want to name their son, who is a lawyer in New York, to be their executor since they feel he is more financially savvy than their artist daughter who lives locally. In many cases, it may be preferable to appoint the business-minded child over the child who lacks knowledge or experience. However, the process of administering an estate can be greatly complicated when the executor lives far away or in another jurisdiction (this can also cause tax issues related to the residency of the estate).
- Many clients are often reluctant to name a professional trust company as an executor of their estate for fear of high fees. In many cases though where no friend or family member is a suitable choice, a professional trust company is a logical and efficient choice as executor. The lawyer should arrange for, or confirm that the client has arranged for, a review of the trust company’s fee schedule and any pre-approval requirements if necessary.
Once the roles and appointment of executors and guardians have been discussed, the lawyer should obtain the instructions of the client regarding how he or she wishes to distribute his or her estate. In many cases, this will require nothing else from the lawyer other than careful note-taking in order to accurately get down the client’s instructions. In other cases, however, the instructions on distribution may raise red flags or concerns for the lawyer, be contrary to public policy or result in impractical applications. In those circumstances, it is incumbent upon the lawyer to raise such concerns with the client and advise them about the potential consequences.
For example, the instructions received from the client may give rise to a potential wills variation claim from the client’s spouse and/or children. The client should be made aware of the potential for the claim and be advised as to what the results of that claim may be. It is then up to the client as to how he wishes to proceed. In some cases, the circumstances for the chosen distribution may be justified or easily explained, in which case it may be advisable for the lawyer to suggest other paperwork, such as a Letter of Wishes, to support and give background to the will-maker’s decisions on distribution.
In other situations, the client may have carefully planned out the specific details as to who will receive which assets of her estate. The lawyer may do some quick math and realize that she has specifically allocated all of her assets, leaving little or no residue to cover funeral expenses, taxes, etc. As a result, section 50 of WESA would apply to cancel certain of the gifts in order to liquidate a sufficient sum to cover the debts. It may be advisable in that case for the lawyer to advise the client towards an alternate scheme of distribution (perhaps percentages to each beneficiary with a wish expressed as to which assets are to be sold and which are to go to specific beneficiaries).
It would also be advisable for the lawyer to advise the client on the difference between outright distributions and testamentary trusts. Depending on the size of the potential estate or the amount of the gift to the particular beneficiary, this might not be a live issue (i.e. it would be impractical to set up a testamentary trust for a $1,000 gift to a 40 year old grandchild), but where the potential beneficiaries are young, under an incapacity or particularly vulnerable and the amount involved is potentially quite large, an outright gift (or even a fixed staged distributions) may be ill advised.
In conjunction with receiving these specific instructions, the lawyer should discuss with the client the potential tax consequences and probate requirements, if such a discussion has not already been had. It is common for clients to over or under-estimate the amount of tax payable as a result of their death or to have completely overlooked the fact that income tax and/or probate fees will be payable. In certain circumstances, it may be possible to advise the client regarding certain probate avoidance strategies (including joint tenancy, alter ego or joint partner trusts).
E. Other Estate Planning and Legal Issues
The lawyer should also discuss with the client their less obvious estate planning needs. Most clients will have come to you for the express purpose of getting a will, but not all of them will realize their potential need for a power of attorney, representation agreement, living will or advanced directive. The lawyer should provide advice on the role that a properly appointed attorney could play for the client in the event of his incapacity and ensure that they understand that their Will does not come into play in this regard until they die.
Aside from further estate planning advice, your discussions may have unearthed other legal issues which the lawyer should raise with the client, such as the need for a marriage or cohabitation agreement, a separation agreement, a co-ownership agreement, or the need to clean up and finalize corporate ownership issues or the estate administration of a deceased family member. The estate planning lawyer (or her colleagues within the firm) may be in a position to provide this advice or perform this work, or it may be necessary to refer the client out. The main job of the lawyer at this stage is to alert the client to the issues and allow them to decide how and when to deal with them. Ideally, this advice should be given in writing.
F. Next Steps
Before the meeting ends, the lawyer should be clear with the client as to what the next steps are. While she be sending a retainer letter? An email confirming instructions? A detailed planning letter? Draft estate planning documents? Does the lawyer need a retainer, further information, documents, records, etc. from the client before commencing work? Is there an understanding as to the relevant timeline? Clearly setting out expectations and responsibilities (followed-up in writing where possible) will make the lawyer-client relationship run more smoothly from that point on.
IV. Difficult and/or Challenging Clients
The discussions above pertain to an average client with no specific difficult or challenging aspects. It is not uncommon, however, for the estate planning lawyer to have to deal with a client with questionable capacity, a client in a situation suggesting potential undue influence, or a client who is otherwise difficult, secretive or just generally challenging.
A. Questionable Capacity
An estate planning lawyer should never automatically assume that the client has the requisite capacity to make a Will. Subsection 36(1) of WESA provides that a person who is sixteen years of age or older and who is mentally capable of doing so may make a Will. Yes, a 45 year old corporate CEO is much more likely to have the requisite mental capacity than a 95 year old terminally ill retiree, but the lawyer must nonetheless refrain from making assumptions of testamentary capacity without testing for it first. The lawyer may be likely to quickly come to the conclusion that the 45 year old CEO has capacity after a short discussion of his personal, family and financial situation. A determination of capacity for the 95 year old client may take significantly longer.
When determining capacity, the lawyer must consider the following:
- Does the client have an understanding of the nature of a will and its effects on claimants?
- Does the client have an understanding of the extent of his or her estate?
- Does the client have an appreciation of the claims to which he or she ought to give effect and an ability to rationally balance the competing claims?
- Is the client free of delusions that may affect the foregoing decisions? (note that only delusions that bear directly on and influence the will-maker’s testamentary deliberations are relevant when challenging testamentary capacity).
A client must have the requisite capacity both at the time instructions are taken and when the instrument is signed. It is recognized that an individual’s capacity may come and go, but instructions and execution of documents should occur during lucid intervals. The advisor should question the client purposefully on the elements of the capacity test outlined above when meeting with the client for instructions and signing.
In some circumstances, it may be appropriate to bring a colleague into the meeting as a second opinion to assess capacity or to request a medical opinion. If the lawyer has any doubt that the client has the requisite mental capacity to make a will, he or she should decline to act.
An excellent resource on testamentary capacity is the BC Law Institute’s Report on Common‑Law Tests of Capacity from 2013. This report can be found on the BCLI’s website and the Law Society’s website.
B. Potential Undue Influence
One of the major requirements that must be met for a Will to be valid is that the will-maker must be acting independently in making the Will, free from any undue influence.
It is not uncommon for elderly or otherwise vulnerable clients to attend a meeting with a lawyer together with one or more of their children or other family members, a caregiver or a close friend. Often times this is for practical reasons such as transportation or limited mobility. Other times it is because the client lacks the confidence or sophistication to face the meeting alone, as meeting with a lawyer can be stressful or intimidating to many people. The presence of such support people does not automatically suggest that there is any undue influence at play, but a lawyer must always consider the possibility that such influence exists.
The lawyer must always meet with the client alone to take instructions and to inquire as to the degree of influence or intermeddling on the part of any family member, friend or caregiver. The reasons for this should be explained to the client, as well as to the particular family member, friend or caregiver who has attended the meeting. The lawyer should keep clear and detailed notes about what is said when the other family member is in and out of the room, as well as the lawyer’s observations and conclusions about possible influence. The lawyer should continue his or her inquiry until he or she is satisfied one way or the other that the client is (or is not) acting freely without influence from another.
The 2011 BC Law Institute’s Report on Recommended Practices for Wills Practitioners Relating to Potential Undue Influence: A Guide, is an excellent resource for understanding how undue influence can manifest and for suggested methods for dealing with the issue in your practice. The report can be found on the BC Law’s Institute website and on the Law Society’s website.
It is important to note that section 52 of WESA shifts the burden of proof in cases of undue influence to the person who is alleged to have done the influencing. This provision will only apply when a relationship of potential dependence or domination is proven.
It is clear that a determination of undue influence can often be difficult to make. If the lawyer has any doubt as to whether the client is providing his or her own independent wishes free from influence, he or she should decline to act.
C. Other Challenges
One of the biggest practical challenges that a lawyer may face when meeting with a client for the first time is when there are language or communication issues. Often times the lawyer may not even know that the client does not speak the language that the lawyer speaks (or is not sufficiently fluent) until the time of the appointment. In these cases, quite often, a friend or family member has attended with the client to act as a translator. The lawyer should be aware of the potential for undue influence in these situations, as he or she may have no easy way of knowing whether the conversation is being translated accurately.
In many such circumstances it might be necessary to bring in a neutral translator, either someone else in the office or a hired professional translator. In other cases, it may be necessary for the lawyer to decline to act, and to refer the client to another lawyer who speaks the client’s language.
Blended families, particularly where the clients are elderly and more susceptible to issues of questionable capacity and undue influence, can also be quite challenging. As in all situations, it is important to be sure that the estate planning instructions are coming from the client him or herself and not from a child (or step-child) of the client. But as a further challenge, a lawyer must consider whether any undue influence exists between the spouses themselves, such that one spouse may be influencing the other to benefit their side of the family to the detriment of the other spouse’s side of the family. In cases where such undue influence exists, it might be necessary to decline to act for one or both of them and to recommend that they each have separate representation.
Another challenge that all wills and estate planning lawyers must learn to deal with in order to be effective is the necessity for explaining sometimes complex legal concepts to relatively unsophisticated clients. For many people, the only interaction they will ever have with a lawyer is to buy or sell their home or to make a will. Most people, whether highly educated or not, young or old, have very little knowledge or understanding of even basic legal concepts and legislative frameworks. In fact, what might appear to be a challenging client because of such lack of sophistication, is actually more likely to be a typical client. Developing ways to explain complex concepts simply and succinctly (though still accurately) is a skill that would benefit most estate planning lawyers.
V. Post Interview Steps
A. Retainer Letter
Following the first meeting, the lawyer should send a retainer letter to the client, if he or she has not done so already, outlining the work to be done and the manner by which fees will be charged. To the extent possible, instructions should be confirmed in writing at this point. If the lawyer has requested further information or documentation from the client, or if the client is still considering aspects of his or her instructions (i.e. choice of executor), the letter can also contain a written request for this information.
The lawyer should enter any pertinent dates and deadlines in his or her bring-forward system, as well as reminders to follow-up on any outstanding information, document requests or incomplete instructions. Having an organized and well-maintained BF system will ensure that things do not inadvertently fall through the cracks.
C. Public Searches
The lawyer should also perform public registry searches, such as land titles, corporate records, personal property registry, etc., where appropriate to confirm the information provided by the client. Where the information and the search results do not align (for example, where the clients said their home was registered in joint tenancy but it is actually owned by the husband alone, or where the clients say they own a recreational property, but it is actually registered in the name of a company) this should be communicated to the client as soon as possible, preferably in writing, and appropriate instructions sought.
One issue that occurs every so often, but which is much easier to deal with while the clients are alive, than during the administration of their estate after their death, is when land title searches result in findings of old charges (e.g. mortgages) that have been long paid off but not discharged from the title or in the discovery that a duplicate indefeasible title has been issued. In both cases, it is crucial that these issues be dealt with before the property is transferred, and this is usually much easier when the historic owners are alive and capable of dealing with it.
VI. File Management
It has been mentioned several times throughout this paper that a wills and estate planning lawyer should endeavour to keep good notes of all meetings and conversations with his or her clients. These notes should be organized, legible and comprehensive. If necessary, they should be transcribed or a memo to file typed out immediately following the meeting when the lawyer’s memory is most clear. Where a lawyer declines to act for any reason, notes pertaining to that event should be taken and maintained in the file.
Beyond just notes, the estate planning lawyer’s file should also be organized and complete, as evidence of the first meeting and all subsequent communication and instructions may be called upon if the planning and implementation is ever called into dispute. Where the lawyer keeps electronic files, he or she should ensure that they are kept in accordance with the Law Society rules of electronic storage.
In many cases, the first interview may be the only face to face meeting of lawyer and client until the estate planning documents are signed. As discussed above, there is much to be done in that meeting: from getting background history and personal information and specific instructions, to assessing capacity and advising on tax issues. Well developed and purposeful standard practices for the first client meeting will serve the estate planning lawyer well throughout his or her career.