Court appointed estate trustee: Introduction
In last week’s vlog, CLAIM BANKRUPTCY IN ONTARIO CASE STUDY: SHE REALLY WANTED TO BUT WE STOPPED HER AND SOLVED HER PROBLEMS, our video provided a case study about a doctor we helped solve her pain and get her life back on track. This week, I want to tell you about another one of our cases where we acted as the court appointed estate trustee. It was a bit unusual, however, it did call on me to use my skill sets as a licensed insolvency trustee.
It seems straightforward so what do you need us for?
An estates lawyer we know contacted us to help him solve a problem for his client. His client was a single man. His mother, whose husband predeceased her, passed away. Her only assets were two pieces of real estate; one a commercial property and the other the family home. The fully leased commercial property was producing income.
On the surface, it appeared to be a very simple situation. Two pieces of real estate and the only beneficiaries were the single man and his single sister. There were no spouses or grandchildren involved. So I asked our lawyer friend the obvious question: “It seems straightforward so what do you need us for?”.
The facts
The lawyer told me that:
- his client and his sister cannot agree on anything;
- the sister’s lawyer is making unreasonable requests;
- the sister is a hoarder, which is a mental health issue;
- nobody lives in the home and the utilities turned off services a long time ago; and
- the sister has hoarded so much personal property in the home you cannot get past the front door!
The lawyer went on to say that the situation cries out for an expert to intervene to get things done so that the properties can be sold and the funds distributed. Neither sibling is capable of agreeing with the other and then doing what needs to be done. The receivership fees to solve their problems would be less than the legal fees spent fighting and not solving anything.
Please don’t call me the receiver
After a thorough discussion with the lawyer, I said it sounds like what you need is a for the Court to appoint a receiver. The lawyer responded that he felt he could get the other side to agree to the appointment of a custodian, but not to any proceedings called anything remotely close to a receiver or licensed insolvency trustee.
I said to my lawyer friend, that problem is easy to solve. How about we call ourselves either an estate trustee or asset manager? He loved the asset manager title.
The agreement
We took part in a conference call with our lawyer friend and the lawyer for the sister. Everyone discussed all the issues and we pointed out our firm’s wealth of experience in acting as a receiver in complex real estate matters.
Each lawyer agreed that assuming the finer points could be worked out, the brother’s lawyer would go ahead with a motion, on consent, to have our Firm act as the court appointed asset manager.
We provided our lawyer friend with a copy of the Ontario Superior Court of Justice Commercial List model receivership order. He then amended it to fit the particulars of this situation and to do a global change from receiver to the title asset manager.
The appointment
Of course, the finer points could not be agreed to. Rather than the matter proceeding on a consent basis, the motion was argued. After hearing all arguments and considering all the evidence, the Court appointed our firm as the asset manager. The commercial property did not have any problems associated with it, so other than to tell you that the property sold, the rest of this story will concentrate on the residence.
Selling the house was the easiest part
The house was not just a house. It was the entire reason for the sister’s existence. Given the mental health issues, we quickly realized that from her perspective, we were about to take away her only joy in life; being able to enter the home and see her loot. It did not matter to her that nobody could enjoy the home and that it was mold infested. This was her baby and we were about to take her baby away from her.
Given these issues, our role was as much like that of a guardian for adults as much as it was about the property in Ontario.
We first obtained quotes for the removal of all of her personal property from the home. I realized that removing the property from the house would only give us another problem as hoarders are not willing to let go of anything. We had to devise a method where the sister would choose what was garbage and what would go to storage. However, even the storage could not go on forever.
The removal plan
We presented our plan to both lawyers. All the items would be removed in front of the sister. If the brother wished to attend he could, but it was not a need. We would also prepay from the proceeds of the sale of the home for six months of storage. That way we capped the brother’s liability for expenses. As items left the house, the sister had to say “garbage” or “storage”. Both sides agreed.
The removal began. What should have taken two weeks took six! The reason was due to mental health issues getting in the way of progress. We understood this and just had to work with it. Eventually, we completed the removal of personal property. We could finally see the entire inside of the house.
We entered with a firm we use to investigate and if necessary do environmental damage remediation work; Hazmat suits and all! Surprisingly, although there was mold, we obtained a verbal report that for our purposes, the home was safe for our purposes to enter for brief periods of time for a realtor and potential purchaser to view. Therefore, we did not need to do any remediation work.
Appraise and sell
The rest of the case could now go ahead. We obtained two appraisals of the house. The house was on a great lot in Toronto in a hot housing market. We listed the house for sale. Due to the house’s condition, it would attract a developer/renovator type of buyer.
After one week on the market, we received four offers to purchase. We rejected all of them and asked for everyone’s best and final offer. The final offer we accepted, subject to Court approval, was above market value. Working with our independent legal counsel, we put our motion material together, obtained the consent of both sides and then obtained Court approval for the sale.
We completed the sale, developed our distribution plan, obtained Court approval for that, distributed the funds and got our discharge.
Court appointed estate trustee: Do you have a financial problem that needs someone else to help you solve?
I present this case study to show how, as a licensed insolvency trustee in the GTA, we can use our skills set in a way that may not seem obvious at first. We look at the entire story of each person or company that comes to us for help.
We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we dealt with this problem and devised an alternate plan for the siblings, allowed them to monetize the assets they were incapable of doing on their own and letting them get on with their lives.
We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.
Call us now for a free consultation. We will get you back on the road to a healthy stress-free life and recover from the pain points in your life.
