Sursa d-voastra de Estates si Real Estate Law - Why is an estate plan important?
People's lives are unique and complex. Your relationships might result in legal obligations you may not be aware of, and that is why there is no substitute for a good plan. Clients often ask me… why do you do the “estate plan” portion of the work? Can’t you cut that out and skip to making my will?
There is more to estate planning than just writing a will. In fact, having your will done is the last piece of the puzzle. Much work needs to be done before that to ensure that the will is properly prepared. Thorough estate planning means accounting for a smooth transition for the survivors, and making their life easier when you pass away.
The estate plan does not need to be a heavy meal layered by complexity, obscurity and confusion. It can be simple, but most importantly, it must be clear. It can take very little time to put together or it can take a longer time, depending on each person’s situation.
But what is an estate plan, after all? It is a snapshot of your life at a point in time:
- who are the members of your family?
- do you belong to a blended family or not?
- is there anybody who does not get along?
- does/will any beneficiary/executor of yours live in the US?
- is anybody dependent on you financially?
- what are your assets?
- what are your liabilities?
- did you ever sign a cohabitation/marriage/separation/shareholders’ agreement?
- did you get married/divorced recently?
- do you have a previous will?
- do you have life insurance?
- do you have registered savings plans?
- do you have any debt?
- and any other life circumstances…
The answers to all these questions and beyond can have legal ramifications that you may not be remotely aware of. Without knowing the answer to these questions, your will may be completely inappropriate for your situation and this may cost your estate many headaches and a long time trying to undo them.
To give a few examples, here are some common mistakes:
- large sums of money left to minors outright – this will lead to the involvement of the Office of the Children’s Lawyer, which could include them taking control of the money until the child turns 18
- leaving money to a disabled beneficiary without placing it in a special trust called a “Henson Trust” – this could lead to disqualification of ODSP
- not accounting for your estate’s liabilities as a result of a separation/shareholders’ agreement – this could lead to an estate claim from an ex-spouse or a business partner
- not taking RESP’s into account; if the RESP is only owned by one of the parents, if that parent passes away, all the funds matched by the government must be returned back to the government
- not addressing life insurance left to minors through beneficiary designation; even though a trustee is selected in the insurance document, this does not create a trust and the trustee can take the funds and possibly mismanage them
- not inquiring about assets and how title is held could lead to a void gift because the asset passed outside the will to another beneficiary due to the manner of ownership
- not taking into account blended families and their unique dynamic (who doesn’t get along with who, who is excluded from the will etc.)
I consider it to be my utmost duty to you as my client to alert you with any red flags and risks. It can be dizzying to read all those questions and have to think about all the consequences on your own. But you are not alone. I will be there to figure all of this out with you and for you.
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
Raluca M. Soica, BBA, CPA, CMA, JD
Barrister & Solicitor
647.280.6497
raluca@rms-law.ca
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Raluca M. Soica raluca@rms-law.ca 11/10/2022 |
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