When Ronald Reagan was diagnosed with Alzheimer’s disease, he announced his condition to the American people in a letter dated November 5, 1994, stating “I intend to live the remainder of the years God gives me on this earth doing the things I have always done.” He was able to.

Other than a brief hospital stay in 2001 when he broke his hip, he was tended around the clock by caregivers in his home. His wife Nancy was able to continue making public appearances (the two of them championed are search foundation for Alzheimer’s). He loved chocolate, and continued to enjoy the good things in life as long as he was able until his death in 2004.

Not everyone will be as lucky as Ronald Reagan was.

Jacqueline lived in Ottawa all of her life and spent her last seven years in a personal care home. Her daughter was horrified.

The staff at the personal care home worked hard but they were burnt out, and there were just too many residents and too few staff. Jacqueline spent time in a dirty diaper. Towards the end of her life, she had trouble eating. The staff did not have the time to help Jacqueline with her meals. She was prone to falling, and she was eventually in a wheelchair. When her mind began to fail, she was restrained in the wheelchair so she wouldn’t get up and try to walk on her own.

Her daughter was able to make arrangements with an understanding employer allowing her to take two hours off in middle of the day to go and feed her mother in the personal care home. She visited Jacqueline twice each day. She stopped taking out of town vacations. There would be no one to feed mom and clean her up if the daughter went on a winter vacation somewhere warm.

Jacqueline was blessed with a daughter who lived in the same city who was willing to roll up her sleeves and put her life on hold for a few years. Her daughter knew her mother’s likes and dislikes. Jacqueline hated hospital-cooked fish, and her daughter made sure she never, ever, had to eat it. Jacqueline’s name and some of the facts have been changed to protect her privacy.

What will happen to you and me if we find ourselves in the same situation as Ronald Reagan or Jacqueline?

You may have no children. If you do, they may live far away. If they live close at hand, can they put their lives on hold? Do you want them to?

You can control your destiny with a little forethought and a little money.
First, you will need a financial plan to guarantee your future care. Can you afford, like Ronald Reagan, to stay in your home and have private nurses and home-care workers come in? If that is too expensive, could you afford to have a private nurse or home care worker come into the personal care home each day for eight hours? Four hours? Two?

Some people are willing to deplete their wealth and leave a smaller estate to guarantee their own comfort and care. Others want the extra help, but not to the extent that it robs the next generation.

Second, you may need a very special and customized power of attorney or other legal instrument to make sure that your wishes are implemented on a mandatory basis.

Third, if you want the job really done right, you need to take the time to assemble personal information for your future caregivers. If you, like Jacqueline, get squeamish at the sight of the salmon they serve in health care institutions, your caregivers need to know that. If you, like Ronald Reagan, love chocolate, your caregivers need to know that. If you love NFL football, and like the idea that you would be parked in front of a TV every Monday night to watch it, your caregivers need to know that. All of this should be written out. A family conference might be a good idea to discuss your plans after they are perfected.

Part of this is guaranteeing yourself that you will get all the care you need. Part of this is protecting your family from the burden of trying to do it themselves.

All of this is doable with a little elbow grease. Start now, or hire someone to coordinate everything. There is at

least one consultant in Calgary who specializes in helping families work through and develop coordinated care plans.

Next week’s column: Choose your executor carefully.

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 jpoyser@welglawyers.ca , 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.

Rita Coupar was born in 1906. The people who knew her over the years, liked her. She was described as bright, cheerful, and dignified.

Rita married but never had children. Perhaps because of that, she was always very close to her nieces and nephews.

Her first husband died when Rita was sixty-eight years old. She remarried. Her second husband was named Earl.

Rita had money. Rita and Earl entered into a prenuptial agreement. They agreed to keep their property separate. Rita then signed a will, giving Earl $5,000, her furniture and personal effects, and the right to live in her condominium for five years following her death. Everything else in her estate was to go to her nieces and nephews.

Her estate ended up amounting to a million dollars or so.

Earl was described as being a man of great determination in all of his dealings. Rita became ill in 1997, and about that time Earl became determined that Rita would leave her million dollars to him or his children — not to her nieces and nephews.

Rita was hospitalized on June 25, 1997. Earl went to a lawyer fifteen days later to see if he could get out of the prenuptial agreement. When the answer to that appeared to be “no,” Earl decided that Rita needed a new will. He went to a lawyer – not Rita’s regular man – and started the ball rolling. Earl met with the lawyer repeatedly before meetings with Rita began. Rita never met with the lawyer alone.

First, they drew up papers to have Rita’s condo put into joint names. If Rita died first, which was looking likely, then Earl would own the condo outright. She signed.

Then Earl had a new will prepared for her. It left everything to him. If he died first, then the will left every thing to his children. There would be nothing for the nieces and nephews Rita was so fond of. She signed that too.

Earl then surprised everyone by dying first. Rita followed him to the grave shortly afterwards on December 23rd, 1998, two days short of her 93rd Christmas.

Earl’s kids came forward and claimed the million dollar estate. Rita’s nieces and nephews hired a lawyer – one who practiced nothing but estate litigation.

They fought through a nine day trial. The judge concluded that the will leaving everything to Earl’s children was invalid. There were two reasons.

First, the judge concluded that Earl placed Rita under undue influence and caused her to sign the new willagainst her wishes. You can persuade a person to leave their estate to you, you just can’t force them. It is a fine line.

Second, Rita lacked the necessary mental capacity to do a will. It was up to Earl’s children to satisfy the judge that Rita still had her marbles. They were up against two doctors. Both said she had lost the legal capacity to sign a valid will as soon as she first became ill. They were also up against Rita’s regular family lawyer – he had spoken to her and kept notes detailing alarming failures of memory at the time.

Luckily for the nieces and nephews, Earl had brought a poor lawyer to the bedside to draft the will. He did not ask the right questions, follow the right processes, or take the right notes. This left Earl’s children without any ammunition they might have used in defending the will. Legally, the onus was on them.

With the new will swept aside, the nieces and nephews inherited everything under the old will.

How much mental capacity does a person need before they can sign a valid will? They have to know what they own, who is in the family tree, and who among those family members might legitimately expect to inherit. They also have to understand what a will does. Finally, they have to be able to grasp all of those points simultaneously in their mind while deciding on the content of the will. Delusions are generally a bad sign.

Doing a bedside will for a person with diminishing mental capacity amounts to a specialty area of law. Attacking and undoing wills done by shoddy lawyers is another one.

All of the details in Rita’s story are taken from the published decision of the court. Names have been changed to protect the family from embarrassment.

Next week’s column: Whimsical wills.

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 jpoyser@welglawyers.ca , 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.

Hugo Herman Krupp died on February 6, 1994. He was survived by three adult children, a son and two daughters. They found a will their father had signed seventeen years earlier in 1977. It divided the wealth equally among them. Everything started out well.

Over the months that followed, one of the daughters named Hailey claimed she found two additional wills signed by her father. If either of the new wills were valid it would revoke the will dividing everything equally. Depending on how things played out, Hailey would inherit everything and her siblings would inherit nothing.

The first will she claimed to have found was supposed to have been signed two days before Hugo died. Hugo had been suffering from advanced dementia long before that date. No one other than Hailey, even for a moment, thought he had the mental capacity to make or sign a will on his deathbed. He was just too far gone. It was clear that the deathbed will was not worth the paper it was written on.

Suspicions would have been running high by this point.

A few more weeks passed. Hailey then told the family that she had found the second will, this one dated in1980 and leaving everything to her. It was typed out in normal form and used standard language.

Her siblings believed it was a forgery and headed to court.

Their lawyer hired a forensic document examiner, Ms. Diane Kruger. She studied her specialty in Toronto and then in England, and had been sniffing ink for years in private practice. She gave expert testimony.

A signature is a complex thing. When you sign something the pressure you place on the pen fluctuates. At some points you press hard and at others softly. That damages the paper. By studying dozens of samplesignatures under a stereo-microscope, a person’s signature is characterized not just as a trail of ink left by pen strokes but as a pressure profile. Forgers don’t understand that. A forged signature is generally made with a constant pressure.

A signature is also made with quick fluid strokes. A forger moves the pen slowly and it quavers – more evidence. Forgers don’t understand that either.

Here, the everything-to-Hailey will showed all of the hallmarks of forgery: steady pressure and quavering. Worse, the clever expert pointed out that the signature was very, very similar to signature found on the first of the three wills. She concluded it had been traced.

Hailey had tracked down the old lawyer, Mr. Alfred, and he swore an affidavit for her stating that he was present and witnessed Hugo’s signature. That was a problem for the siblings. He was cross-examined. Mr. Alfred was not dishonest, just ill-equipped. He had no real memory of signing the will, and had no notes or records. This was common to the legal dark ages of the 1950s and 1960s before lawyers were educated by angry courts – lawyers must make and keep detailed notes. He swore the affidavit because he did not know there was a fight going on, and his signature looked right. It was forged too.

The judge threw the everything-to-Hailey will out of court so hard that it is still bouncing.

All of the details in this story were taken from the judge’s decision and are a matter of public record. Names have been changed to save the family embarrassment.

How common is will forgery? Common enough that we have been hired to fight four will forgery case in the last three years.

Do forgers get caught? Once someone raises the red flag – yes.

Sleuth work often uncovers discrepancies. The witnesses might turn out to have been dead when they supposed to have witnessed the will, or out of town. Things are odd, or out of place. Dozens of details can trip upa forger.

Experts are a forger’s worst nightmare. They put signatures under stereomicroscopes. They study the type of paper. It is very, very difficult for the forger to escape discovery once the hunt is on and the will is placed under scrutiny.

Someone has to raise the alarm. How many forged wills get by without scrutiny? No one knows. If no one raises the alarm, the hunt never starts.

Next week’s column: The danger of procrastination.

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 jpoyser@welglawyers. ca , 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.

Mr. Paul’s was born in the United States. He married his Canadian wife in 1978 after he came to Canada to work, and has lived in Canada ever since. Financially, Mr. and Mrs. Pauls have done well.

They have a simple idea in mind for their estate plan. All of their wealth is to be inherited by the survivor after the first of them dies. When the second of them dies, they want all of the wealth to be divided equally between their two children, a son and a daughter.

While the estate plan is simple, putting it into operation is not.

There are two reasons for that. First, Mr. Paul’s is a US citizen. Second, the couple has money – lots of it. Together, those two reasons mean that the US government will tax Mr. Paul’s at death.

The US government charges estate taxes against the world wide assets owned by a US citizen or domiciliary when they die. Even though Mr. Paul’s has been resident in Canada for thirty years, his death will trigger taxes in the United States. It makes no difference that he rarely goes back to visit. It makes no difference that all of his assets are located here in Canada. The US government will still tax away a chunk of his flesh when he dies.

Those taxes can be heavy, amounting to as much as 45% on his worldwide assets. The US estate tax is charged against all of his wealth at death, including life insurance money.

He has an exemption available, currently $3,500,000 US. That is a big exemption, but what if his assets total up to $6,000,000? That leaves him with $2,500,000 of wealth in excess of the exemption and in a position where his widow might have to send $1,125,000 to the US government. She may be able to reduce those taxes by a marital credit that is available in some circumstances.

The situation is even worse if Mrs. Paul’s dies first. If she dies first with $6,000,000 in her name alone, to match the $6,000,000 standing in the name of her husband, he inherits the lot. He’ll be left standing with $12,000,000in his name, and the US government will be eager to see him dead. After a $3,500,000 exemption, the total taxes at 45% on $8,500,000 would be $3,825,000 US. Ouch.

The Paul’s want to keep that money for the kids. They hate the idea that they might be forced to finance the US stimulus package.

The taxes can be significantly reduced and sometimes avoided altogether. This involves setting up advanced estate plans including wills that are twenty or thirty pages long.

The Paul’s need two advisors – one providing advice on Canadian income tax and probate fees, and the other providing concurrent advice on US estate taxes and cross border issues. Working as a team, they can offer significant opportunities to reduce both Canadian and US taxes.

You may be sitting back and thinking that this does not apply to you. Actually, it may. US estate taxes apply to many people who are surprised to find out that they are caught up in the system. First, if you were born in the United States you might be a US citizen without knowing it, even though you carry a Canadian passport. Second, even if you are not a US citizen, you may be subject to US estate taxes at death if you are what is called a “US domiciliary.” A US domiciliary can include a person who simply lives in the US for some time under a resident visa, even after they leave. Holding a green card can be sufficient to sweep a person into the net.

Do you have to worry about this if you are an everyday Joe? The exemption amount of $3,500,000 is likely to be reduced by the US government to a smaller exemption of $2,000,000. If your assets are well under 2 million dollars US, including life insurance, you may be able to ignore this. If you have a higher net worth, like the Paul’s, then it is time to worry – unless you like paying big taxes to foreign governments.

The Paul’s are fictional. The problems are real. Their story combines facts from the ranks of clients who consult me each year with US estate planning problems. Some oversimplification has been necessary.

Next week’s column: What do you do if your kids live in the States?

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 jpoyser@welglawyers.ca , 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.

Rudy Gutzke was born in the Ukraine and immigrated to Canada, marrying late in life to a woman named Lorna. She already had two children. Rudy never had children of his own. Rudy and his wife grew old together and moved into a personal care home in Winnipeg.

Lorna died on September 20th, 1990. All of their property was jointly owned, and Rudy inherited everything. His will, done eight years earlier, did not speak to who would inherit from him if he died second. That meant that all of Rudy’s wealth, which now included Lorna’s wealth, would pass at his death to his nieces and nephews back in the Ukraine. Lorna’s children would get nothing (stepchildren not forming part of his family for inheritance purposes). They would have viewed that as a problem. Within four days of Lorna’s death, the stepchildren had discovered all of this and approached a lawyer to have a new will drafted for Rudy – one that would make them, not his extended family, the beneficiaries of his estate.

The lawyer visited Rudy’s room at the personal care home and met with him for 15 minutes. Rudy told the lawyer he wanted a will prepared leaving everything to the stepchildren. The will was prepared and signed that same day, on September 27th, 1990.

Rudy died a few years later, and gave birth to some spirited litigation. The stepchildren claimed his estate under the new will. His extended family came forward and attacked the will, saying it was invalid and claiming his estate as their own.

Delay is dangerous. By the time Rudy tried to write his new will he was in a personal care home, had already suffered a stroke, and had been seen by a psychiatrist who knew that Rudy’s mental powers were deteriorating. It fell to the lawyer to defend the will he had prepared by satisfying the court that Rudy had the necessary mental capacity at the time the will was signed. He failed.

The will was overturned by the Manitoba Court of Appeal in 2003. This story is taken from the court’s written judgment (the names have been changed to avoid embarrassment). The extended family got everything. Lorna’s children lost any inheritance. The lawyers enjoyed a fat payday.

Don’t leave your estate planning until it is too late. If you die unexpectedly, you might die with no will at all.

If you fail to tackle your estate planning until you are too old or sick, then the task of helping you put a valid will in place becomes a big, difficult, and expensive job best suited to a specialist lawyer.

Rudy’s stepchildren should have found a lawyer who would have met with him for two hours, not fifteen minutes. Who would conduct a detailed interview relating to his family history, assets and wishes, not a lawyer who behaved like a short-order cook, simply asking Rudy what he wanted and then serving it to him. They should have found a lawyer who would interview the staff at the care home, secure a written opinion from the psychiatrist, and create a detailed file to document his or her conclusions for future reference. The lawyer they hired did none of those things and kept no notes at all.

If all of the proper steps had been followed, the lawyer might have been able to satisfy the court that Rudy had the necessary mental capacity and the will would have withstood attack.

Good estate planning allows people to pass wealth from one generation to the next while minimizing taxes and structuring special arrangements to improve the lives of beneficiaries. It takes time. Deathbed instructions, grunted in pain into a lawyer’s ear, deny any realistic opportunity for good estate planning. Delay also makes it easy to get it wrong and, like Rudy, leave a legacy of unnecessary litigation.

Some lawyers make a study out of overturning estate plans done too late or with too little attention to detail. What is the recipe for successful litigation? Have a will done at a person’s deathbed, or late in life when capacity is in question, change the person’s beneficiaries under the new will, and stir in a lawyer who spends less than an hour with the client. Pure gold. Don’t let your estate be a lawyer’s next payday.

Next week’s column: The absolute best way to avoid estate litigation.

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 jpoyser@welglawyers. ca , 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.