Planning Ahead- Estate Planning Basics

* Everyone gets organized at some point, they just might not be around for it. PLANNING AHEAD * ESTATE PLANNING BASICS E. Susan Elliott, LSM, LL.D., B. Comm. (Hons.)

If you have no Will or Power of Attorney then:
Your assets go to your “nearest relatives”
The Province of Ontario may take over your affairs
It increases the likelihood of family fighting and paying lawyers to resolve issues

YOU LIKE TO PAY TAXES AND FEES
YOU TRUST THE GOVERNMENT TO LOOK AFTER IT FOR YOU
YOUR FAMILY ALWAYS GETS ALONG
YOU’LL GET TO IT WHEN YOU’RE OLD ENOUGH
YOU WILL LIVE FOREVER

THOUGHTFUL, UP TO DATE SET OF DOCUMENTS
CAN INCLUDE ANY OR ALL OF:
A WILL OR, MULTIPLE WILLS
A POWER OF ATTORNEY FOR PERSONAL CARE
A CONTINUING POWER OF ATTORNEY FOR PROPERTY
A “LIVING WILL” or ADVANCED HEALTH CARE DIRECTIVE
AN INTER VIVOS TRUST
A TESTAMENTARY TRUST
AN ALTER EGO TRUST
DESIGNATED BENEFICIARIES
JOINT OWNERSHIP
LIFE INSURANCE

FINAL INSTRUCTIONS TO FAMILY & FRIENDS
APPOINTS SOMEONE TO ADMINISTER YOUR ESTATE:
pay bills, including taxes, funeral etc.
distribute assets as specified
ONLY COUNTS WHEN YOU ARE DEAD
is a “living document”
SHOULD BE CLEAR
it’s too late to spell it out after you die

APPOINTS A “SUBSTITUTE DECISION-MAKER”
FOR “PROPERTY” – ALL YOUR ASSETS or
FOR PERSONAL CARE – MEDICAL & END OF LIFE
MUST BE SOMEONE YOU TRUST WITH:
YOUR LIFE
ALL YOUR WORDLY GOODS
OFTEN WISE TO APPOINT JOINT ATTORNEYS and, ALWAYS HAVE BACKUP ATTORNEYS
CAN BE AMENDED OR REVOKED AT ANY TIME

A PERSON TRANSFERS PROPERTY TO ANOTHER TO HOLD FOR THE USE & BENEFIT OF OTHERS
CAN BE DONE WHILE ALIVE OR IN A WILL
CAN HAVE CERTAIN TAX ADVANTAGES BUT ALSO COULD HAVE DISADVANTAGES
PROVIDES PRIVACY AND FLEXIBILITY
CAN REPLACE MOST OTHER ESTATE PLANNING DOCUMENTS

SPOUSE OR DEPENDANTS HAVE RIGHTS
CAN INCLUDE CURRENT and FORMER SPOUSE
CAN INCLUDE BUSINESS PARTNERS
CAN INCLUDE ADULT CHILDREN
THE CLAIMS CAN COMPETE WITH EACH OTHER
IF YOU HAVE NO WILL THE CLAIMS COULD BE HIGHER THAN IF YOU HAVE A WILL

DISABLED ADULT CHILDREN
REQUIRE A “HENSON TRUST” IF ON ODSP
“ SPENDTHRIFT” BENEFICIARIES
USUALLY HAVE A SPECIAL TRUST IN THE WILL
MINORS
WILL INHERIT AT AGE 18 UNLESS DEFERRED
NEED TO HAVE A CONTIGENCY PLAN
2 ND (or 3 RD or 4 TH ) MARRIAGES
BLENDED FAMILIES MAY NEED SPECIAL PROVISIONS

COTTAGES
VERY DIFFICULT – SENTIMENTAL vs. PRACTICAL
ASSETS IN OTHER COUNTRIES
TIME SHARES
BANK ACCOUNTS
REAL ESTATE
PRIVATE CORPORATIONS
CAN HAVE A SEPARATE WILL
PERSONAL POSSESSIONS
SHOULD BE REVIEWED AND “LISTED” IF IMPORTANT

CAPITAL GAINS TAX
DEEMED DISPOSITION AT DEATH TRIGGERS TAX
HARD TO AVOID OTHER THAN SPOUSAL ROLL-OVER
APPLIES TO COTTAGES and INVESTMENTS
RRIFs/RRSPs
BALANCE IS INCLUDED IN INCOME AT DEATH
TAX-FREE SPOUSAL ROLL-OVER
CHARITABLE BEQUESTS
CAN BE A WIN-WIN AND REDUCE TAXES
LIFE INSURANCE
CAN PAY TAXES AND AVOID A SALE OF THE ASSET

About 1.5% of your estate
Are payable if your Will goes to probate or,
If you have NO WILL and die intestate
Paid on all assets passing through your Will or estate
Can be minimized by:
Joint assets
Designated beneficiaries
Trusts ( inter vivos, alter ego )

DECIDE WHO WILL BE IN CHARGE OF WHAT
THINK ABOUT ALTERNATIVES OR BACKUPS
BRING A LIST OF ALL MAJOR ASSETS:
INCLUDE OWNERSHIP OR REGISTRATION DETAILS
IF CAPITAL GAIN OR LOSS KNOW THE VALUES
INVOLVE FAMILY MEMBERS IN THE PLANNING
CONSULT YOUR FINANCIAL ADVISOR and ACCOUNTANT AS WELL AS YOUR LAWYER
DON’T PROCRASTINATE, START SOMEWHERE!

Tel. 613-544-1330 Fax 613-547-4538 Email: [email_address]

Planning Ahead- Estate Planning Basics

by Gordon's Estate Services on Mar 24, 2011

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