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Mississauga Wills & Estates Law Blog

The need for estate planning for young parents

Years ago, most Ontario parents would have appointed godparents who would take care of their children, if anything should happen to the parents that would orphan the kids. However, times have changed, and young couples are either less religious or not as traditional as couples from earlier years were, and many young parents may overlook the importance of estate planning and the appointment of guardians for their children. Life is unpredictable, and any couple's children may unexpectedly be left without care if their parents are killed in a crash or an equally horrible incident.

For this reason, establishing estate plans is essential -- even for young couples who refuse to consider their own mortality. Plans need not be complex but should at least include provisions for their children. As the years pass, parents can modify the plans to fit altered circumstances and to accommodate the unique needs of each child. At the start of the process, the most important and challenging task would be to choose appropriate guardians.

Estate planning not only for protection after death

Regardless of how well planned our lives are, unanticipated events have a way of occurring at the worst times. For that reason, estate planners suggest three documents that should not be left out of any Ontario resident's estate planning. Rather than only having control over his or her assets after death, these papers will protect assets if the individual becomes incapacitated.

To avoid a situation of no control if a stroke or other event renders a person incapacitated -- physically or mentally -- a durable power of attorney document can be signed by which a trusted individual can be appointed to manage the person's finances while he or she is alive. The document can specify the types of financial decisions that person will have. It could include managing a business and household accounts, managing assets and retirement accounts, handling tax returns and managing government benefits.

Trusts are non-essential but valuable tools in estate planning

Many Ontario residents think they only need to draft wills later in life. The truth is that life is unpredictable, and as soon as a person starts earning an income, it is wise to establish some form of estate planning that can be adapted through the years as assets increase and major changes like marriage and children occur. Those who do consider estate planning may misguidedly believe that trusts are essential, while the fact is that they can be helpful under particular circumstances, but they are optional.

The most popular type of trust to establish is a living or revocable trust. It allows the person to put his or her assets into the trust for use until his or her death, at which time the assets are transferred directly to the beneficiaries of the trust -- bypassing probate that will typically apply to a will. Another advantage of a trust compared to a will is the privacy and confidentiality because it does not become public record, which is the case with a will.

Wills and trusts in estate planning

Trusts are becoming more and more popular by Ontario residents who want more control over what happens to their assets, both during their lifetimes and after their deaths. While a will is an essential estate planning tool, trusts can be used as added methods of control. The person who establishes a trust is called the settlor, and he or she appoints trustees who will become the legal titleholder of any assets transferred into a trust.

Although a person can have a will along with one or more trusts, the manner in which the two tools handle assets are poles apart. While a will takes effect upon the individual's death, the creation of a trust activates it; however, it could be dissolved by the settlor at any time -- provided he or she is mentally competent. One of the primary benefits of a trust is that it will bypass probate, saving money and time while also providing privacy, because it will not be publicly accessible as is the case with a will.

The need for powers of attorney as part of estate planning

Life in Ontario is unpredictable, and adverse circumstances or advancement in age can affect any person's mental competence. If such an individual did not anticipate this and failed to address it by appropriate estate planning measures, a court will appoint such a guardian -- if the individual is no longer mentally able choose a substitute decision maker. The court's appointment may not be the person that the individual would have chosen.

To avoid such a situation, powers of attorney can be appointed as part of a person's estate planning. Powers of attorney must be appointed when the individual granting the power still has the mental capacity to draft such documents. The purpose of giving another person the power of attorney is to have a trusted individual to handle specified affairs when the maker of the documents is no longer capable of doing so.

Tips and tricks for effective estate planning

Whether one has a lot or a little, it only makes sense to consider what is going to happen to his or her assets when he or she passes away. While there is no legal requirement to make a will or do any kind of estate planning whatsoever, leaving no plan for heirs to follow can create chaos and disappointment during a time of need. Rather than forcing family and loved ones to scramble, it is always better to put a plan place to provide comfort at a dark hour. Here are some tips for men and women in Ontario looking to put their affairs in order.

Since one is not around to tend to these matters, it follows that it will be necessary to appoint people to key positions, such as an estate trustee or guardian. It is important to choose someone who is not only trustworthy, but who is also likely to be able to young enough and healthy enough to carry out the necessary tasks when the time comes. Many people appoint back ups for each position, in case the original appointee cannot see the job through to completion.

Estate planning for blended families may take extra care

Although it makes great fodder for soap operas and dramatic movies, no one wants to leave the family to squabble over an estate after he or she passes away. For that reason, many people leave their final wishes in a will, so that there can be no doubt as to who gets what. Disappointed heirs, however, can make life difficult for others if they feel the will was unfair. Blended families may be especially likely to experience turmoil, if the estate planning is not done just right.

Blended families are increasingly common in Ontario and across the country. According to Statistics Canada, there were 3.7 million families with children in the country in 2012. Of these families, 12.6 percent were blended families. Professionals, who work in the estate planning field believe that such families require extra care to prevent strife at the time of distribution.

Take control of your estate planning with a trust

If a person is fortunate, he or she may accumulate significant assets over the course of a lifetime. Deciding what is to become of those assets after one passes away can be a challenge. Wills are a common way of handing down assets; However, once the will is submitted for the probate, the will and the entire application become a part of public domain. Anyone may obtain from the Court a copy of the will submitted for probate. To protect their privacy, many high earners in Ontario are making trusts a part of their estate planning.

Many successful baby boomers are looking to pass on their assets and even their businesses to their children and grandchildren. Trusts are an excellent way for many people to do just that.

There are two kinds of trust that may be employed: a living (inter-vivos) trust, and a testamentary trust.

Estate administration can take a nasty turn when families fight

When a man or woman writes a will, it is no doubt their hope to leave enriching gifts to those whom they held most dear in life. Unfortunately, once a person has passed on, he or she has no control over what his or her relatives do. Estate administration can become lengthy and unpleasant when descendants squabble over the estate, as one celebrity family is proving right now.

Ontario native Alan Thicke passed away in Dec. 2016 and left behind a sizable estate divided between his three sons and his third wife. The three boys each received an equal share of Thicke's ranch and are to split 75 percent of his personal items and 60 percent of what remains of the estate. To his widow, he bequeathed the furnishings at the ranch, the balance of his personal effects and estate, a $500,000 life insurance policy and his various death benefits. She is also allowed to continue to live at the ranch, provided she pays to maintain the property.

Keep wills up to date to reflect family changes

Any man or woman who plans for the future of his or her family after they are gone clearly cares about the people in their life. Wills, in particular, are a great way to ensure the distribution of estates and the enrichment of descendants. However, failing to keep one's will up to date could have unintended and regrettable consequences for a person's loved ones.

An Ontario woman passed away recently at the age of 94. In her will, she left all of her belongings and assets to her husband. However, since he predeceased her, the estate passed to her two sons, as specified in the will. Having lived to a ripe old age, she also outlived one of her two sons. Her will also covered that possibility, stipulating the deceased son's share go to his children.