planning ahead- estate planning basics

14
* Everyone gets organized at some point, they just might not be around for it. PLANNING AHEAD * ESTATE PLANNING BASICS E. Susan Elliott, LSM, LL.D., B. Comm. (Hons.)

Upload: gordons-estate-services

Post on 06-May-2015

637 views

Category:

Documents


0 download

DESCRIPTION

Get organized before you're not around to do it!

TRANSCRIPT

Page 1: Planning Ahead- Estate Planning Basics

* Everyone gets organized at some point, they just might not be around for it.

PLANNING AHEAD*

ESTATE PLANNING BASICS

E. Susan Elliott, LSM, LL.D., B. Comm. (Hons.)

Page 2: Planning Ahead- Estate Planning Basics

If you have no Will or Power of Attorney then:

Your assets go to your “nearest relatives”

The Province of Ontario may take over your affairs

It increases the likelihood of family fighting and paying lawyers to resolve issues

Page 3: Planning Ahead- Estate Planning Basics

1. YOU LIKE TO PAY TAXES AND FEES

2. YOU TRUST THE GOVERNMENT TO LOOK AFTER IT FOR YOU

3. YOUR FAMILY ALWAYS GETS ALONG

4. YOU’LL GET TO IT WHEN YOU’RE OLD ENOUGH

5. YOU WILL LIVE FOREVER

Page 4: Planning Ahead- Estate Planning Basics

THOUGHTFUL, UP TO DATE SET OF DOCUMENTS

CAN INCLUDE ANY OR ALL OF:◦ A WILL OR, MULTIPLE WILLS◦ A POWER OF ATTORNEY FOR PERSONAL CARE◦ A CONTINUING POWER OF ATTORNEY FOR PROPERTY◦ A “LIVING WILL” or ADVANCED HEALTH CARE DIRECTIVE◦ AN INTER VIVOS TRUST◦ A TESTAMENTARY TRUST◦ AN ALTER EGO TRUST◦ DESIGNATED BENEFICIARIES◦ JOINT OWNERSHIP◦ LIFE INSURANCE

Page 5: Planning Ahead- Estate Planning Basics

FINAL INSTRUCTIONS TO FAMILY & FRIENDS

APPOINTS SOMEONE TO ADMINISTER YOUR ESTATE:

pay bills, including taxes, funeral etc. distribute assets as specified

ONLY COUNTS WHEN YOU ARE DEAD is a “living document”

SHOULD BE CLEAR it’s too late to spell it out after you die

Page 6: Planning Ahead- Estate Planning Basics

APPOINTS A “SUBSTITUTE DECISION-MAKER”◦ FOR “PROPERTY” – ALL YOUR ASSETS or◦ FOR PERSONAL CARE – MEDICAL & END OF LIFE

MUST BE SOMEONE YOU TRUST WITH:◦ YOUR LIFE◦ ALL YOUR WORDLY GOODS

OFTEN WISE TO APPOINT JOINT ATTORNEYS and, ALWAYS HAVE BACKUP ATTORNEYS

CAN BE AMENDED OR REVOKED AT ANY TIME

Page 7: Planning Ahead- Estate Planning Basics

A PERSON TRANSFERS PROPERTY TO ANOTHER TO HOLD FOR THE USE & BENEFIT OF OTHERS

CAN BE DONE WHILE ALIVE OR IN A WILL

CAN HAVE CERTAIN TAX ADVANTAGES BUT ALSO COULD HAVE DISADVANTAGES

PROVIDES PRIVACY AND FLEXIBILITY

CAN REPLACE MOST OTHER ESTATE PLANNING DOCUMENTS

Page 8: Planning Ahead- Estate Planning Basics

SPOUSE OR DEPENDANTS HAVE RIGHTS

◦ CAN INCLUDE CURRENT and FORMER SPOUSE

◦ CAN INCLUDE BUSINESS PARTNERS

◦ CAN INCLUDE ADULT CHILDREN

THE CLAIMS CAN COMPETE WITH EACH OTHER

IF YOU HAVE NO WILL THE CLAIMS COULD BE HIGHER THAN IF YOU HAVE A WILL

Page 9: Planning Ahead- Estate Planning Basics

DISABLED ADULT CHILDREN◦ REQUIRE A “HENSON TRUST” IF ON ODSP

“SPENDTHRIFT” BENEFICIARIES◦ USUALLY HAVE A SPECIAL TRUST IN THE WILL

MINORS◦ WILL INHERIT AT AGE 18 UNLESS DEFERRED◦ NEED TO HAVE A CONTIGENCY PLAN

2ND (or 3RD or 4TH) MARRIAGES ◦ BLENDED FAMILIES MAY NEED SPECIAL PROVISIONS

Page 10: Planning Ahead- Estate Planning Basics

COTTAGES ◦ VERY DIFFICULT – SENTIMENTAL vs. PRACTICAL

ASSETS IN OTHER COUNTRIES◦ TIME SHARES◦ BANK ACCOUNTS◦ REAL ESTATE

PRIVATE CORPORATIONS◦ CAN HAVE A SEPARATE WILL

PERSONAL POSSESSIONS ◦ SHOULD BE REVIEWED AND “LISTED” IF

IMPORTANT

Page 11: Planning Ahead- Estate Planning Basics

CAPITAL GAINS TAX◦ DEEMED DISPOSITION AT DEATH TRIGGERS TAX◦ HARD TO AVOID OTHER THAN SPOUSAL ROLL-OVER◦ APPLIES TO COTTAGES and INVESTMENTS

RRIFs/RRSPs◦ BALANCE IS INCLUDED IN INCOME AT DEATH◦ TAX-FREE SPOUSAL ROLL-OVER

CHARITABLE BEQUESTS◦ CAN BE A WIN-WIN AND REDUCE TAXES

LIFE INSURANCE◦ CAN PAY TAXES AND AVOID A SALE OF THE ASSET

Page 12: Planning Ahead- Estate Planning Basics

About 1.5% of your estate

Are payable if your Will goes to probate or,

If you have NO WILL and die intestate

Paid on all assets passing through your Will or estate

Can be minimized by: Joint assets Designated beneficiaries Trusts (inter vivos, alter ego)

Page 13: Planning Ahead- Estate Planning Basics

DECIDE WHO WILL BE IN CHARGE OF WHAT

THINK ABOUT ALTERNATIVES OR BACKUPS

BRING A LIST OF ALL MAJOR ASSETS:◦ INCLUDE OWNERSHIP OR REGISTRATION DETAILS◦ IF CAPITAL GAIN OR LOSS KNOW THE VALUES

INVOLVE FAMILY MEMBERS IN THE PLANNING

CONSULT YOUR FINANCIAL ADVISOR and ACCOUNTANT AS WELL AS YOUR LAWYER

DON’T PROCRASTINATE, START SOMEWHERE!

Page 14: Planning Ahead- Estate Planning Basics

Tel. 613-544-1330Fax 613-547-4538Email: [email protected]