Wills and Estate Planning

Estate Planning Part 2: Four Common Mistakes

Posted by on Nov 22, 2010 in Wills and Estate Planning | 0 comments

Whether we like it or not, some parts of life are complex. We need help with areas where we lack experience or expertise. This is certainly true when it comes to certain legal, financial and tax matters – all of which can come into play with estate planning. But emotional pitfalls and relationship issues can also arise during estate planning. Here are four common estate planning mistakes to avoid: Mistake #1: Not changing your documents as you and your family experience life-changing events. There are dozens of life-changing events which should trigger the review of your legal and financial decisions. These include health problems, employment and business changes, births and deaths, marriages and divorces. For example, divorce does not invalidate a current will, but marriage does. If you purchase property outside your province of residence, the tax rules and laws of that jurisdictions may also affect your estate plan.  Mistake #2: Joint ownership with or investments on behalf of children. Many parents consider joint property ownership with children as a tax-saving strategy. But property jointly owned may be vulnerable to claims by your child’s creditors – or spouses in cases of divorce. Similarly, making investments in a child’s name does not guarantee that the investments will belong to the child upon your death – unless reflected in your will. Mistake #3: Preparing your own documents. The examples above may show that both professional legal and tax advice are key factors in sound estate planning. By looking to save on professional fees to have your will prepared, you could end up costing your estate much more, and cause added grief to family members and other beneficiaries. It’s all in the details and the experienced oversight that professionals bring to the table. They are trained to catch the small mistakes or omissions that can make a huge difference. Mistake #4: Not explaining estate decisions to beneficiaries. Some people use their wills as an opportunity for “settling scores” or to establish personal power from “beyond the grave”. First and foremost, consider your motivation and how you would like to be remembered. Where a will is likely to be contentious or leave important questions unanswered, consider talking about the reasons behind decisions in your will while you are still alive. If that’s not possible, leave a letter with your executor to share with beneficiaries. Don’t put an executor in the difficult position of trying to explain or interpret your wishes. *** Our estate plan can be one of many vehicles that reflect our personal values and how we have lived them. Whatever we leave materially is only part of our legacy. But the way in which we order our practical and financial affairs gives us an opportunity to create maximum benefit and minimum burden for others. A good estate plan can serve as a powerful symbol of a life well lived – and an “end of life” well-planned. © ElderWise Inc., 2010 Vol. 6, No. 11 You have permission to reprint this or any other ElderWise INFO article, provided you reproduce it in its entirety, acknowledge our copyright, and include the following statement: Originally published by ElderWise Publishing, a division of ElderWise Inc., Canada’s go-to place for “age-smart” planning. Visit us at http://elderwise.memwebs.com/ and subscribe to our FREE...

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Estate Planning Part 1: Myth-Busting

Posted by on Nov 22, 2010 in Wills and Estate Planning | 0 comments

With anything that we plan on a regular basis, like vacations and family get-togethers, we become familiar with what works, what to avoid and, hopefully, how to prepare properly in advance. But when it comes to the larger issues like estate plans, our mistakes can cause unintended hassle – and even hardship – for those we care for.  Here are some common estate planning myths that call for a closer look: I’m not “wealthy”, so I don’t need an estate plan…do I? If you are happy to have your estate distributed by someone you’ve never met, using a formula created by the government, then you may not “need” an estate plan. For this reason, young people with few assets typically don’t have wills. But everyone else should consider developing an estate plan. I do have a will. Isn’t that enough? A well-thought-out will is one of the results of a good estate plan, but not a substitute for it. Powers of attorney and health care directives are, of course, other important parts of the plan. But a good overall estate plan gives you more than that: it ensures your wealth is transferred – without waste – to the people or purposes you choose. That way, you don’t incur unnecessary tax or probate fees, and you place the minimal burden on the people you care for. What kind of “burden” can an estate create? Disposing of and distributing assets is a big undertaking. But two things are especially important here. First, even simple estates can take a year or two to wind up…it’s a lot of work, and there are expenses involved. Beneficiaries may have to wait a long time before funds are released. That’s where life insurance can help, because funds are received soon after the date of death and are not tied to the probate process. Second, consider your executor – likely a relative or trusted personal contact. Make sure their job isn’t any harder than it needs to be. Get documents organized and let your executor know where they are located. Think about whether having a professional executor would make sense. So, what is estate planning really about? It might be easier to define what estate planning is NOT. It’s not primarily about tax planning, or avoiding probate fees, or buying life insurance, though all those things may be involved. It’s more generally about spotting potential future problems with any and all financial and legal decisions you are making today. But estate planning is also about exploring your values and your legacy. For example, what do you believe about leaving money to your children? If you have inherited money, what should happen to those funds? Do you believe in spending your wealth or preserving it for your heirs? What charities or social causes do you want to support? The reality is that many of us avoid estate planning – for the wrong reasons. Resolve to change that, and ensure your estate is optimized. For expert advice in this article, ElderWise interviewed Mr. Tom Junkin, Executive VP of Personal Trust Services at the Fiduciary Trust Company of Canada. Vol. 6, No. 10 © ElderWise Inc., 2010 You have permission to reprint this or any other ElderWise INFO article, provided you reproduce it in its entirety, acknowledge our copyright, and include the following statement: Originally published by ElderWise Publishing, a division of ElderWise Inc., Canada’ go-to place for “age-smart” planning. Visit us at http://elderwise.memwebs.com/ and subscribe to our FREE...

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37 Reasons to Review Your Will & Estate Plan

Posted by on Nov 16, 2010 in Wills and Estate Planning | 0 comments

Whether we like it or not, some parts of life are complex. We need to enlist help with areas where we lack experience or expertise. This is certainly true when it comes to certain legal, financial and tax matters – all of which can come into play with estate planning. But we can also use expert insight when it comes to the emotional pitfalls and relationship issues that arise during estate planning.   Here is the first of 4 common mistakes we outlined in ElderWise Info (Vol 6.No. 11) Estate Planning – Part 2:    Not changing your documents as you and your family experience life-changing events. There are dozens of life-changing events which should trigger the review of your legal and financial decisions. These include health, employment and business changes, births and deaths, marriages and divorces. The attached checklist, provided by Fiduciary Trust Company of Canada, provides 37 life events which may prompt you to review your will and estate plan. 37 Reasons to Review Your Will & Estate...

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Six Excuses for Stalling Estate Planning

Posted by on Aug 12, 2010 in Wills and Estate Planning | 0 comments

  “Most people take more time planning their annual vacation than they do planning their estate.”  This common saying may sound like an exaggeration, but the reality is that more than 50% of Canadians do not have a properly planned and executed Will, Power of Attorney and Health Care Directive.  Why not? In a word: procrastination. Most of us experience some combination of fear and avoidance when faced with the challenges of thinking about our own death…We know procrastination is the most common estate planning mistake. Based on our experience at Fiduciary Trust, here are several of the root causes that stall the process…and some suggestions to get past “go”. To read the full article, please open the file attachment below....

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