Ep. 16 Understanding Wills

Living Richer

Dec 7 2021 • 30 mins

1. Why a Will is the cornerstone of a good estate plan.

  • Get to dictate where assets go, guardian of children, who administers estate
  • Without a Will, the law decides who gets assets and it’s not necessarily all to a spouse
  • Streamlines estate administration and can help to reduce taxes/fees on death

2. What makes for a good Will?

  • Revokes previous Wills
  • Names executor and alternate
  • Disposes of household items
  • Gifts
  • Residue – no missing pieces
  • Administrative provisions – a few pages at least
  • Signed and witnessed

3.  Beyond the Will, what should someone pay attention to when creating or updating their estate plan?

  • Assets, family situation, contractual or support obligations
  • Executor and an eye to the administration of the estate

4.  What should someone consider when naming an executor?

  • Should be ideally in province, definitely in Canada
  • Financially savvy, time, age
  • Relationship with beneficiaries, potential for conflict
  • Consider professional executor

5. What are some of the main issues that can complicate estate planning and administration

  • Poor Wills, Will challenges (undue influence)
  • Joint assets – who actually owns them?
  • Conflict – siblings; blended families
  • Cottage
  • Accusations against executor

6. What is probate and how can it be avoided or minimized?

  • Probate is a court process to get court’s stamp of approval on the Will
  • Probate fees approx.. 1.5% of the estate values
  • Planning techniques: assets joint with spouse, beneficiary designations, gifting during life
  • Each of the above has complications and pitfalls so important to be done holisticall

7.  Why a trust can be an important part of an estate plan.

  • Trusts – give someone benefit of money, but trustee controls
  • Terms can be very flexible – from discretionary to set; can end at a certain age or continue, can have one or more beneficiaries
  • Generally used to protect vulnerable beneficiaries – minors, disabled (ODSP), spendthrift, vulnerable spouse
  • Can sometimes be used to provide some income splitting, but less so now with changes to trust taxation
  • Need a trustee who knows what they are doing, trustworthy, time, objective