Ep. 16 Understanding Wills
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
