My husband and I recently went on a trip to Peru to celebrate our 35^th wedding anniversary. It was an adventurous 18-day tour, amazing but exhausting. One of my favourite parts was the beginning of our trip when we spent four days at an Amazon jungle lodge. Part of my reason for wanting to go on this trip, and specifically to the Amazon,[1] was because of a John Grisham legal thriller, The Testament, that I read many years ago but that made a lasting impression on me. Although it is a fictional novel, there are many estate planning lessons to be learned through all its chaos! Today’s blogs sets out some questions one might discuss if we had an All About Estates Book Club.

Warning – This Blog contains Spoilers

The novel begins with Troy Phelan, an ultra wealthy, but a lonely and sick man, who is tired of living. He is estranged from his three ex-wives and seven children, who he has gathered in his office building, each in different boardrooms with their respective lawyers. Phelan is in the presence of his long time estates lawyer, Josh Stafford, and three psychiatrists (one hired by each family) to determine his testamentary capacity, all of it being video recorded. After the panel of psychiatrists confirms that he is of sound mind, Phelan signs a will, leading his family to believe it leaves them his 11 billion dollar estate. However, once the family leaves, Phelan pulls out a handwritten holograph will, signs it, then rises from his wheelchair and lunges himself over the railing of the terrace, committing suicide.

Question #1 – Risks of Holographic Wills: The novel spotlights a hastily written will with lasting repercussions. In real life, what pitfalls can arise from such informal wills, and  when  might they be considered appropriate?

The holograph will leaves the family only enough money to pay off their debts as of the day Phelan died. His sole beneficiary is Rachel Lane, a daughter no one knew that he had and who he has not had contact with in 20 years, he just knows she is a World Tribes missionary working with remote indigenous people on the Brazil/Bolivia border. Phelan stipulated that his will be kept secret for one month. Unaware of the new will, the family immediately begin spending money that they have not yet received, racking up more debts.

Question #2 – Inheritance Anticipation: The Phelan heirs spend money they haven’t inherited yet, leading to grave financial consequences. What does this narrative thread teach us about managing expectations and the realistic timing of obtaining probate, administering an estate and making estate distributions?

One of my favourite passages from the novel, which will strike a chord with many of the readers of this blog, is this thought by Stafford: “Now he was holding a valid will that, in a few hasty paragraphs, transferred one of the worlds’ greatest fortunes to an unknow heir, without the slightest hint of estate planning. The inheritance taxes would be brutal.”

Question #3 – Mitigating Taxes on Death: There is no inheritance tax in Canada, but there are similar tax implications with capital gains tax on the deemed disposition arising on death and estate administration (probate) tax. What strategies could have been used to soften the blow? What strategies could be implemented post-death?

Stafford decides to send Nate O’Riley, a partner in his firm who is currently in a drug-and-alcohol-rehabilitation facility and facing problems with the IRS, to find Rachel. The trip appeals to Nate as an escape and he embarks on an arduous journey, traveling for weeks by aircraft, horse, boat, and on foot. Nate survives crashes, storms, wildlife, and inhospitable locals in his efforts to locate Rachel. He eventually finds Rachel living alone in a hut with a thatched roof, no plumbing or electricity, no phones, and no concern for material possessions. Rachel does not want the money and does not want to be found. She refuses to sign a waiver and acknowledgment. During his journey, Nate catches dengue fever but eventually recovers and makes it back to civilization and his law office.

Question #4 – The Quest for an Heir: Nate’s expedition to locate Rachel highlights the lengths one might go to when a beneficiary is hard to find. What lessons can we draw about keeping beneficiary information current and accessible?

Question #5 – Declining an Inheritance: The novel presents an interesting case where the heir does not wish to claim the inheritance. What legal mechanisms exist for such a refusal, and what impact does it have on the estate?

Meanwhile, Phelan’s family have filed multiple lawsuits. With Nate representing Rachel, a settlement is reached with the family for each of them to receive $50 million, with the balance of assets to be placed in a trust for charitable purposes with the main emphasis on World Tribes Missions. But the settlement will not be complete until signed and approved by Rachel. Nate travels back to Brazil, but on arriving he is shown Rachel’s grave, as she has died of malaria. Rachel left a box to be given to Nate if he ever came back, containing her own holograph will, in which she specified that her gift from Phelan’s will is to be placed in a charitable trust, with Nate as the executor and trustee.

Question #6 – Plan B is a Must: After unexpected events, Phelan’s fortune is redirected to a charitable trust. This turns our attention to the necessity for contingent planning in wills. How do we ensure that our estate plans are robust enough to handle sudden changes?

November is Make a Will Month.  This book is a wild reminder of the importance of having a sound estate plan! Thanks for reading.

[1] In looking at the book again, I have since realized that its setting was actually the wetlands of Brazil’s Pantanal, not the Amazon, but it was a similar rainforest river experience.