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Lawsuit against Desmarais estate a reminder to get it all in writing

On Behalf of | Mar 29, 2015 | Wills

Shortly before his death in 2013, Ontario native and billionaire Paul Desmarais gave his older brother Louis $5 million. This wasn’t a gift, says the elder Desmarais in a recent lawsuit. The money was a partial payment related to an agreement the brothers struck back in 1979.

Louis claims that, according to that agreement, he would sell 60,000 shares in Powner Corporation of Canada to Paul, who was head of the investment firm, so that the younger brother could have more control over the company. Paul would then, “at a later time, give back the 60,000 shares” or their equivalent value in cash. According to the lawsuit filed on behalf of Louis, he is now due those shares, which he says are valued at more than $100 million.

A major problem with the agreement, which apparently wasn’t discussed again until 2013 when Paul sent Louis the $5 million, is that it remains unclear whether the brothers adequately documented the deal, or if the deal exists at all. What is more certain is that Paul stipulated that the $5 million was all that Louis would receive, and that Paul’s will would offer Louis nothing more.

A lawyer for Paul’s estate asked a judge to dismiss Louis’ claim, but the judge decided that granting a dismissal now would be too hasty, and Louis should have an opportunity to try to prove that an agreement was made and that the $5 million is linked to the $100 million Louis seeks to claim.

While the outcome of this case remains to be seen, it is instructive in terms of estate and inheritance planning. To avoid litigation and family disputes, be sure to create a comprehensive plan — one with precise language that clarifies your wishes and addresses every aspect of your estate. After all, you don’t have to be extremely wealthy for the lack of a comprehensive plan to create confusion and conflict for your family.


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