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Mississauga Wills & Estates Law Blog

Key business planning decisions to prevent estate litigation

When someone dies, particularly without a binding and well-communicated plan in place, it is not uncommon for disputes to arise regarding assets and succession. This is particularly true for business owners, who often own one more more complex nonliquid assets in their businesses. There are a few key decisions Ontario business owners can make in advance to ease this transition and avoid estate litigation.

The first decision that must be made is whether to transfer the business to another person, or to sell it upon the owner's passing. This decision can be somewhat complicated if the business has multiple owners. It can also be complicated if the owner has a child or children interested in running the business who may not have the skills to do so, or if there are multiple children but only one is interested in proceeding with the business. However, avoiding this decision ultimately puts those left behind in a difficult position, so it is important to explore options and make wishes known.

Pros and cons of naming multiple executors

When taking on a big and complicated task, it can be good to have help. This is often the thinking behind naming two or more executors to an estate. There are clear advantages to having two types of expertise and perspectives when taking on a big task like executing an Ontario estate. But, the risk of conflict can also make this a challenging situation in practice, depending on the arrangement. Here are some things to think about in these cases.

One of the positives of naming co-executors is allowing for checks and balances. Another is having a professional perspective for certain tasks. For example, someone might name a child, along with an accountant, as executor.

Consider succession of digital assets in estate administration

Many people are aware that they must plan for the succession of assets like their home, physical belongings and finances in estate plans. But what about those items that exist only in the digital world? Owned websites, accounts, content and digital items such as cryptocurrency can all be worth a significant amount in the digital age. Navigating the legal standards around the succession of digital assets can be an estate administration challenge for Ontario executors.

It is recommended that those working on their estate plans consider digital assets in the process. This includes any online account that is protected by login security. The most obvious of these might be email and social media accounts. However, significant assets could be housed in online bank accounts like PayPal, invoicing software, websites that bring in revenue and accounts that collect travel points. Additional to these so-called "cloud accounts" are passwords needed to access a person's computer or phone. 

Reviewing beneficiary designations can ease estate administration

Many Canadians mistakenly believe that writing a will is a "set it and forget it" exercise. This could not be further from the proof. Regular review, improvements and clarifications are important to in Ontario estate planning. Making some of these updates could save executors from an estate administration challenge down the line.

One of the first things that should be regularly reviewed is beneficiary designations. If one's net worth increases, or an account structure is altered, instructions may need to be adjusted. Should payments be based on account amounts, percentage of overall wealth, or direct amounts? This is something that can be discussed with a lawyer depending on the organization of one's wealth.

Advance financial planning can ease estate administration

There is usually many things on the agenda during a meeting between financial advisors and their clients. With investments, budgets, retirement and so much more to talk about, estate planning can often fall to the wayside. However, Ontario financial advisors can and should make time to mention estate planning to their clients in order to save their families from an estate administration headache down the road.

Financial advisors do not need to know everything about estate planning to support their clients in considering this aspect of their finances. Indeed, many Ontario advisors refer clients to a trusted lawyer to complete the important legal pieces of this process. However, it is a good idea to at least mention it as clients consider the future of their wealth.

Planning ahead for dementia, capacity loss is important

When people think of estate planning, they are usually considering what will happen when they pass away. But, there are other scenarios that Ontario planners must prepare for as well. One of these is dementia, which is a relatively common situation among aging Canadians. Deciding who can make decisions in the case that the planner lacks the capacity to do so is important for all who are preparing for the future.

It can be difficult for family members to accept that their loved one has dementia and may need additional support to manage life as he or she ages. Having a clear plan for this scenario can make what is often a tense and stressful time a bit easier to manage. Powers of attorney, centralized financial documents and advance communication with loved ones can make the path forward a bit clearer.

Managing estate administration if stepparent is sole beneficiary

While some wills lay out specific amounts or percentages for different individuals, others have a sole beneficiary. Typically, this is a surviving spouse. But some children find this a challenging prospect, especially if the surviving spouse does not see fit to leave them in the will although the first parent would have done so. How do such cases play out in Ontario estate administration?

First, it is important for would-be beneficiaries to remember that, even if they do not like it, it is an individual's choice to leave all of their funds to a spouse. This is not an uncommon choice. However, if the person feels strongly that their children should get some of the inheritance once their spouse passes, putting this in writing is a must.

Considering estate plans before birthing can be wise

For many parents, the most important part of their estate plan is who will have guardianship of children if they should pass away. However, there are other parts of estate planning that need to be considered by women and families entering childbirth. Who can make decisions on the mother's behalf if she is incapacitated during childbirth? What happens if complications occur during or after childbirth? These situations can be devastating to Ontario families, but advance planning can at the very least keep the matter out of the courtroom.

The majority of the time, giving birth is a joy-filled for families. However, childbirth is a time when a birthing mother's life is at higher risk than usual. At the very least, there is the potential that they may be medically unable to make decisions for themselves; for example, if they are undergoing an emergency surgery. Along with general instructions, a power of attorney can be named to make decisions on the mother's behalf if she is unable.

Managing estate litigation risks with unequal asset distribution

While it is common to leave an equal amount of assets to all children, many have very legitimate reason for favouring some children over others in a will. For example, one might have been a caretaker or have taken less from parents in their lifetime, or perhaps financial need is different. There is legal precedent for such wishes to be fulfilled under Ontario estate law. However, wills with unequal division of assets between children can also become fodder for estate litigation should one of the children call the will into question.

One way to avoid conflict over a will is to clearly communicate the contents of the estate plans to each beneficiary. This can be an awkward conversation, especially with the children who are receiving less. Some experts recommend this, while others say it may be a conversation worth avoiding if it will cause an uproar within the family. In the end, the efficacy of this advice depends on a person's individual situation.

Estate litigation risks in blended or non-traditional families

Deciding the fate of assets can be fairly straight-forward in some families. In others, especially blended families, deciding who gets what can be dicey business. An non-traditional or "modern" family structure does not have to be a recipe for estate litigation, but it can certainly raise questions and, in some cases, conflict. Here are some things for Ontario estate planners and executors to consider when distribution of assets is less clear-cut.

There are many types of families that may end up facing unique challenges in estate planning and administration. These can include blended families, divorced families, cohabiting couples and even polyamorous relationships. The growing diversity in Canadian families is something lawyers who manage estate planning and administration are very aware of, so they often are able to answer questions about how to broach these unique situations. However, estate law itself can be less compatible with these structures, so a written plan is particularly important in these cases.