Linda Smith died suddenly, at 91 years of age, still in her own house and living independently. She was a widow, and had two sons, Larry and Bob. Neither boy had succeeded in making his way in the world. Both lived at home with her for significant periods of time over the years.
Larry was the older of the two. He had a grade ten education, and worked odd jobs most of his life. He set up a small business painting signs but earned a pittance. Shortly before his mom died he had been evicted for non-payment of rent and had moved back home to live with her. He described himself as an aging “beatnik.” His mom had steadily given him money over the years to get him out of jams and meet his obligations. It averaged about $5,000 a year. As an example, she paid a month’s worth of rent to the Larry’s disgruntled ex-landlord to avoid legal action after Larry moved home.
Bob was the younger brother. He had a college degree in business administration. He fancied himself a work at home stock trader and never had a real job. On two separate occasions he managed to build up a stock portfolio nearing $500,000. Market crashes wiped him out both times. For the most part he lived at home, even when he was doing well on the stock market. His mom gave him an allowance, ranging from $300 to $500 a month. He always took the allowance. He never bought groceries – even when he had money in the bank.
The two boys hated each other. Linda did not like it, but knew she could not change it. Her plan was this: she would buy a little house for Larry and give the house she was in to Bob. Both boys would have a place of their own. The rest of her assets could be divided between them. She started on that plan by putting Bob’s name on the title to her house. She also had Larry looking for a place he might buy as his own. Predictably, she died before the plan could move forward.
When it came time to deal with her estate, the boys sprung into action, but not in a good way.
Bob claimed to be entitled to the house because he was on title. Larry was living there. Bob demanded Larry move out. Larry demanded that the house be sold. Bob responded with eviction proceedings. Larry claimed a bigger share of the estate because he had been “taking care of mom.” Bob had the locks changed the next time Larry left the house to go on a painting job. Larry bought a crowbar at Canadian Tire and broke in. Bob called the police and had Larry led away in handcuffs. Larry sued Bob for false imprisonment.
These were two men in their sixties.
The boys managed to spend more than $200,000 in legal fees just getting to court. Once there, they might have spent the same amount again. The whole estate, all in, was in the neighborhood of $700,000. The judge who heard the case said “The depletion of the estate can fairly be described as a tragedy.”
People like Bob and Larry give estate litigation a bad name. They acted like ten-year olds. They litigated with a “scorched earth” approach, and sucked up eleven days of trial with frivolous and far-fetched claims and counter-claims.
The Judge added the house back into the estate. All of the claims and cross-claims were thrown out. What was left of the estate was then divided equally.
Sometimes people need to go to court over an estate. Sometimes it is reasonable to do so. Before going there, good lawyers are often able to help prospective litigants settle the case. Settlement is vastly preferable to throwing money in the fire box and steaming to court.
Bob and Larry did not buy in to that idea however.
This story is a real one. The facts were taken from the published and publically available decision of the judge who heard the case. The names have been changed to save the boys further embarrassment.
Next month’s column: Dynasty trusts as a tool for the wealthy.
John Poyser practices as a wills and estate lawyer with The Wealth and Estate Law Group (Alberta). A former chair of the Wills, Estates and Trusts Section of the Canadian Bar Association, he co-authors a textbook for lawyers and accountants on trust and estate taxation. Contact him at (403) 613-2128 or firstname.lastname@example.org , or visit www.welglawyers.ca
© John E. S. Poyser 2009.
This article was current when it was written. No effort has been made to update it. It is not a replacement for legal advice.