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Mississauga Wills & Estates Law Blog

Prioritize the process, not the will itself, with estate planning

For most Canadians, financial planning is far from a well-defined process. While many have an idea of what they have and where they may want it to go after they pass away, these plans are often not articulated to those who need to be aware. Ontario families may find that the best way to avoid financial challenges, up to and including estate litigation, is to consider an estate as part of a longer-term process of financial planning overall.

Estate planning and its inevitable aftermath are among the lesser understood financial issues in Ontario and throughout Canada. Investments and insurance are much more widely discussed and understood, while retirement and estate plans are less considered in many cases. Considering how the two interact, and how many stakeholders may be involved in the outcome of these decisions, this can be a mistake.

Managing gifts to grandchildren in estate administration

As the economy changes and housing costs rise, an increasing number of grandparents are offering financial assistance to their grandchildren. This shift in priorities can impact estate planning and estate administration, especially if grandparents would like to leave money to help their grandchildren only with particular purchases like a home or education. Here are some ways Ontario grandparents can approach the delicate subject of grandchildren in estate planning.

One of the first things grandparents should clarify is the reason for the financial assistance. Some may simply have excess money in their estate and wish to give it to younger family members with more financial need. Others have less resources or very specific intentions, so they need to be strategic about how they offer assistance.

Plan ahead to avoid estate administration issues with the cottage

A family home is often at the center of estate planning efforts. But there are other large-scale assets that can often cause serious disputes and estate administration challenges in Ontario families. Cottages are one common asset that can cause discord among families. Here are some steps cottage owners can take to prevent conflict around this often beloved family asset.

The first consideration when estate planning with a cottage is to consider who will use the property. While equal co-ownership of an Ontario vacation property between children might seem to be the simplest solution, it can become complicated when one child uses the cottage significantly more than others. A child's location, vacation preferences and future plans should all be considered when planning for a cottage's succession.

Divorce and farms can cause estate administration challenges

A business, land and property, and changes in marital status can all add challenges to estate planning. For some Ontario families, all three issues are involved in their wealth planning and estate administration. With the rise of so-called "grey divorce," many farming families with large amounts of land and business assets have had to change their estate plans later in life. Neglecting to do so, or missing a step, can make for particularly difficult estate administration.

Separations can often spell the end of a family business. For farming couples later in life, this can mean the end of a legacy both individuals hoped to pass onto their children. The easy answer of selling everything and splitting the profits may not bode well should there be a child or children intent on inheriting the business.

What defines a "fair" estate plan?

When planning for the distribution of assets in the future, it is common for individuals to aim for a "fair" and equitable arrangement. For some Ontario families, this simply means liquidating assets and splitting the proceeds among surviving children. For others, the choice is not so simple. Grandchildren, dependency, relationships and difficult assets like real estate and businesses can make it difficult to create an estate plan that is considered "fair" and reasonable to all in the family. Here are a few of the most important considerations.

Transparency with all beneficiaries is highly recommended when creating an estate plan. It is better to have discussions about one's wishes, even if they may not be pleasant or comfortable. Even those who believe their plans would be self-evident and do not see a reason for such a discussion should still discuss the details with children in order to avoid future conflict or misunderstanding.

Future planning for disabled loved ones with limited capacity

People with special needs and their caretakers have many unique challenges. One that is often overlooked is the prospect of planning for a person's financial future, including formulating an estate plan. This is important for those who have disabled loved ones with limited capacity, especially if the primary caregivers may pass away first as is often the case for parents of special needs children in Ontario.

Having no plan at all can be a big mistake, but it is not uncommon. These are complicated and often emotionally difficult issues to work through, so simplifying things can help. Focusing on a few key items, like life insurance and estate planning, can make a bit difference.

How "do-it-yourself" wills can end in litigation

It is not uncommon for Ontario adults to consider drafting their own will at home. A do-it-yourself will can seem attractive to those who have a good handle on their assets and descendants. The problem is that wills created at home can be much more easily misunderstood and contested, ultimately leading to estate litigation. Here are some risk factors people should consider before trying to write up this important document on their own.

One of the most common issues with wills created without external support is that they leave out important assets or have unclear descriptions. Contradictory instructions are also a common issue that can end in litigation for loved ones. These mistakes may not be identified until it is too late.

Making estate administration easier with a trust

Ontario residents who have a trust may already know that they need to fund it. Without addressing this important step, the trust may not be worth the paper it is written on when the time comes. One of the reasons many people use trusts is to help simplify the estate administration process, but that will not happen if they do not contain any assets.

No one way to add assets to a trust exists. How a particular asset ends up in the trust depends on what it is. However, one consistency exists that no one with a trust can avoid -- paperwork, which changes depending on the asset. For instance, what an Ontario resident needs in order to put a bank account into the trust differs from what is needed to put a piece of real estate into it.

The different fiduciaries in an estate plan

When creating an estate plan, Ontario residents are entrusting certain individuals with acting for them upon either death or incapacitation. These fiduciaries must perform their tasks honestly, in good faith and to the best of their abilities. What does that mean for the people appointed to fulfill the major roles in those plans?

The executor appointed in the will is obligated to settle the affairs of the deceased individual in accordance with that document and applicable laws. Those duties include paying debts, addressing tax issues and distributing the assets of the estate, among other things. A trustee is obligated to manage the assets of the trust and protect the interests of the beneficiaries while carrying out the grantor's wishes as outlined in it.

Events that trigger an estate plan review to prevent litigation

Providing for families members after death is something that many Ontario residents work toward. They create estate plans they believe accomplish this goal -- at the time. The problem is that an estate plan may not always fit their families' circumstances. Certain events require a review of those plans in order to make sure they still apply and will not potentially give rise to litigation upon death.

One event that should trigger a review of an estate plan is divorce. During the marriage, Ontario couples often make sure they provide for each other. For example, changing beneficiary designations is vital in order to ensure that the proceeds from the accounts they are attached to go where an individual intends them to go.