Luck, usually, won’t settle your estate

When my dad died, I was lucky.

I’m not saying I didn’t like the guy (I did), or that his passing significantly lined my pockets (it didn’t). I was lucky for one very specific reason: his lawyer, who’d drafted his and my mom’s will after they moved to Princeton, N.J. in 1968, was still alive. And, at age 85, he was still practicing and putting in three full days a week at the office.

His guidance proved critical. He knew my dad’s wishes, including the ones that weren’t articulated on paper. He knew all the probate judges, ensuring the proceedings took (I kid you not) 15 minutes. He knew everything about my father’s business relationships, including the specifics of a business he closed in haste during the 1982 recession.

The younger partners at the firm, though, had never met my dad. He’d retired in 1994, at which point his business dealings ceased to funnel through the firm. And he’d last updated his will in 1995. As a result, my dad hadn’t set foot in their offices for nearly 20 years. All the younger lawyers could say about him was, “I’ve heard from people in town that he was a nice man.”

Very pleasing, but not helpful when you dig up a handwritten IOU to a former business partner dated 1981 and need to know definitively whether that loan was paid off or still outstanding.

My dad’s lawyer, of course, knew the loan had been settled because he’d witnessed the payment, and remembered the event as if it had taken place yesterday. The release form, nowhere to be found in my father’s voluminous records, was in the lawyer’s files that documented every detail of their 45-year client relationship.

Walking back to my dad’s house from his office, it struck me: What if that lawyer had died before my dad? Or, given that he was 85, had lost some of his faculties? I would have been in the soup.

It gave me pause, but also spurred me to action.Closing an estate meant my own circumstances had changed, which meant it was time to redraft my own will. And I wasn’t crazy about the lawyer I’d worked with since arriving in Canada.

Courts can change beneficiaries

In certain circumstances, the courts have ordered proceeds from registered accounts and life insurance to be paid to someone other than the designated beneficiary. This typically happens in cases involving marital breakdown, where a beneficiary designation is changed contrary to a separation agreement. But the courts have been willing to intervene in other situations: read more at advisor.ca/changeben

It was time for a change. And we had five criteria. The new lawyer had to be:

• competent,
• intelligent,
• street smart,
• knowledgeable about U.S. tax law (we’re all dual nationals), and
• significantly younger than my wife and me.

That last one was key. We didn’t want our daughters to face the same risk I had. We wanted someone who would be there when we weren’t.

Since it wasn’t practical to run to New Jersey every time a document needed signing and witnessing, I performed a lot of tasks remotely from Toronto. I used that process to meet and vet a half-dozen lawyers’ backgrounds, specialties and comfort levels in dealing with dual nationals.

That process put me in front of a sharp 28-year-old who had risen to the bar three years prior, and was in line to take over her father’s firm. She had answers to my questions, the right blend of listening skills, and legal acumen. But, most importantly, she displayed the understanding that while my wife and I are her clients now, her real clients are our children.

by Philip Porado, a financial columnist based in Toronto. phil.porado@gmail.com