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One in five Canadians who received a family inheritance say they experienced conflict with their siblings or other relatives over the division of assets.
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The family cottage should invoke memories of warm weather, sunshine, and happiness. Unfortunately, for some, estate battles or family fights surrounding the cottage can tarnish these positive memories upon the death of the owner of the property.
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Disinheritance is defined in Black's Law Dictionary as "the act by which the owner of an estate deprives a person of the right to inherit the same, who would otherwise be his heir." As such, it can be extremely unsettling for a child to find out that they have been disinherited from their parent's estate.
As morbid as it may seem, death is inevitable and preparing for our last day of life is a key component in a solid financial plan. Without proper planning, death can trigger a significant income tax bill which can cause significant financial stress for already devastated loved ones left behind.
One scenario commonly encountered is the situation in which an individual dies while negotiating a separation agreement with their spouse, or in the midst of divorce proceedings. While a divorce order will void specific bequests to a spouse, merely initiating negotiations or proceedings may not.
Family law and estate law often function independently. However, when a spouse dies, features of both practice areas quickly become interconnected.
Disinheritance is a profound element of an estate plan. It can be triggered by a single, specific event, or result from the lifelong flaws of a relationship. For example, a parent may decide to remove one child as a residuary beneficiary under his or her will because of a heated dispute and subsequent estrangement.
After the death of a family member, it becomes much more difficult to manage relationships, especially when it is the family matriarch or patriarch, the "glue" that has held the family together, who passes away. Sometimes an individual will plan on creating an estate plan "someday." Neglecting the need for an estate plan can result in unmanaged family dysfunction, which is likely to lead to disputes that end up in court.
The importance to a client of estate planning and properly drafted testamentary documents cannot be overstated. However, mistakes can be made -- we are all human after all, and the intricacies of an individual's final wishes can often lead to errors made by even the most seasoned of professionals.