All About Estates

Proportionality: Is there a Place for It in the Estates and Trusts World?

Proportionality is the new buzz word. 

For us that do litigation, proportionality is associated with costs.  Since the paradigm shift about ten years ago in costs in estate litigation such that costs are to now follow the cause rather than being paid out of the estate automatically, proportionality has become the new kid in town.  Proportionality may have been an implied consideration but not the express factor.  With the court of appeal decision in McDougald v. Gooderham proportionality is now the express consideration.  Query how it will apply where you are not the first lawyer on the file.  Does it apply to a predecessor’s fees and fees already incurred even though you had no control or involvement in them?

For us that do estate planning and administration is there a place for proportionality? I suggest the principle can equally apply when it comes to fees.  For those who are not our Bay Street colleagues typically a flat fee is charged for doing a will.  This is a necessity not only to compete but also to be able to answer the frequent question “how much do you charge for a will?”  Why can’t the charge be based on the value of the assets?  The larger estates even if not more complicated can justify the increased size based fee as more time is involved in going through everything. 

Charging fees on this basis would make sense to our clients.  It would make more sense and be less intimidating than being quoted an hourly rate out of context.

Banks charge service fees based on the number and type of transactions.  Financial advisors charge commission based on value.  Real estate agents charge a fixed commission based on the value of the property.  Why not lawyers?

Lesson learned:  Proportionality: the golden opportunity to move estate planning from the loss leader position.

Until next time,

Jasmine Sweatman

About Jasmine Sweatman