Every year, thousands of consumers create their own wills, powers of attorney, and other estate planning documents using kits which are available either on the internet or in retail locations. With a more sophisticated population and increasing numbers of people on the internet, there has been a proliferation of products available in recent years.
People have always sought out new and innovative ways to reduce or avoid taxes. In estate planning, some of the more traditional methods have included designating a beneficiary directly in an insurance policy or naming a joint account holder with a right of survivorship. Multiple wills are another effective technique and as a result, have become increasingly popular over the last decade.
This New Year as you make your resolutions, commit to making one that will get you healthy and fit -- financially. While setting personal resolutions have become second nature, the New Year should also be the time each of us sits down with family. Talk about what your financial goals are in 2014 and what you need to have in place to ensure that your family is protected and aware.
The shift: divorce and other complicated family dynamics mean closer ties between the two worlds of family law and estate law. As family dynamics shift away from the previous norm of a single traditional marriage and nuclear family, and toward increasing numbers of second and subsequent marriages, blended families, and common law relationships, the need for estate planning becomes a more pressing and complex concern.
Those in the market for snowbird condominiums or other properties south of the border need to buy what it is they can afford and can make them happy, without their estate plans at the forefront of their mind. However, it's important not to be naïve in these cross-border property purchases, in order to ensure assets pass on in a meaningful way.
Increasingly, Canadians are finding happiness later in life with second spouses and second families. In these situations, professional advice may be desirable to balance the competing demands of providing for the first and second families in an estate plan. This has resulted in a host of creative solutions.
With social media, electronic banking and online investing, our lives are becoming increasingly digital. Important documents containing crucial information, such as financial statements and tax receipts, are being stored in on-line databases, creating elements of a virtual estate. With this in mind, technology is playing a bigger and bigger role in estate planning.
On an individual's death, a new taxpayer is created. The estate trustee is responsible for tax on income earned by the individual up to the date of death. All too often, an estate trustee will begin administering the deceased's assets, only to realize that the deceased had failed to properly file and pay taxes during the later years of his or her life.
When a person is an executor of another's estate, it is a lot of hard work. The task often puts the individual in an unpleasant position of conflict. In order to remunerate these individuals for the risks and efforts that they have undertaken, attorneys, executors and trustees may claim compensation for their work out of the assets which they administer.
Estate litigation can be costly, both financially and emotionally. Thankfully, there is another avenue besides the courtroom that can serve to reduce both types of stress: alternative dispute resolution. Alternative dispute resolution mechanisms allow for disputes to be dealt with outside of the courtroom and are often an attractive means for litigants wishing to push toward settlement.
Because of the importance of powers of attorney to the rights and quality of life of an individual who has become incapable, it is absolutely essential that they be kept up-to-date. A careful review of your powers of attorney should be undertaken every three to five years or after any material life events, such as a marriage or a change in health conditions.
The modern family often incorporates second and third marriages, step-children, half-children and common law spouses. We often recommend to our clients that they create a 'global' estate plan, incorporating other agreements such as cohabitation agreements, marriage contracts and separation agreements. Having these documents well-synced to wills and powers of attorneys can go a long way in sorting things out when plans go awry.
Any approach to dealing with an emotionally charged asset such as the family cottage may lead to disagreements. By taking appropriate steps, communicating with one another, finding creative solutions, and by working together as a family, the cottage can continue to be the source of cherished memories for future generations.