Proposed 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 an estate lawyer on speed dial. They see your name on the will and call and ask if you will do the estate administration.”
If the proposed changes come in, testators may have to find other ways of expressing their wishes. “There is no way around it within the will,” says De Angelis. “Outside the will, the testator might indicate a preference in a letter or orally, but the will is a safe, well-preserved document. The two-witness requirement and other protections ensure the true wishes are recorded and negate claims of undue duress or authority.
In relation to the restrictions on gifts or benefits, De Angelis says the issue isn’t so much that the drafting lawyer should be getting gifts but that the wording is confusing. He worries people could interpret it as precluding a solicitor from acting as executor and receiving compensation.
Connolly agrees that the drafting is ambiguous but she’s not as worried about the situation. “It would be odd for a lawyer to be drafting a will for a client where there may be conflict issues. I suppose there may be situations where a long-time solicitor may have been advising a client for many years. There may be a family lawyer, like a family doctor, who may have a client who wants to acknowledge that relationship. The lawyer can’t accept more than a nominal gift without independent legal advice.”
While some wills can be very expensive, they cost a few hundred dollars at the lower end. Connolly notes the testator may have to pay someone else for the independent legal advice or find another lawyer to draft the will. “That may prove logistically difficult,” she says.
For the moment, the OBA is focusing on working with the LSUC working group. “The law society understands we are giving practical input motivated by the clients’ interests,” says De Angelis.
“The advice is coming from those who are most connected with the problem and wish to provide the best protection for testators. It will be difficult to ignore that advice given that it is consistent with the law society’s public protection mandate.”