Planning Your Estate

By Cristina De Leon Culp

Most of us do not want to think of death and avoid thinking about estate planning and preparing a Last Will and Testament. However, these matters flow out of responsible stewardship of our properties and thoughtful consideration of the welfare of our loved ones. A sensible estate plan, which may include a Will enables us to preserve and protect our hard-earned assets and provide for the efficient and tax-effective transfer of these assets to our families and other beneficiaries. I suggest that making a Will should be as important to us as investing in our children’s education, or buying an accident or life insurance policy. The inevitability of death renders estate planning almost obligatory. At the very least, I suggest it is a loving and prudent final gesture toward our loved ones.

Estate Planning affords the opportunity to consider taxes and avail of legitimate tax-saving or tax-deferral measures. Probate or estate administration taxes attach to properties passing pursuant to a Will and one must consider valid will alternatives, to preserve a greater portion of our estate for our beneficiaries. One may also consider whether a secondary or excluded properties Will also known as non-probate Will is appropriate to deal with one’s shares in a corporation, to allow the administration of such assets without probate and without being subject to probate fees. As well, taxes on inchoate capital gain are added to our final income tax on the deemed disposition of capital property on death. Again, to minimize taxes and ensure our loved ones obtain the benefit of our life time savings, there is need for careful planning and if necessary, taking certain mindful steps.

Making a Will also gives us the opportunity to choose the individual who will administer our estate as Executor or Trustee. We most certainly will want to appoint a person we can trust to faithfully carry out our intent for the benefit of our families. We would also choose someone who knows us well enough to exercise his or her discretion in accordance with our objectives.

For those of us who have very young children, the making of a Will provides an opportunity to appoint a guardian and custodian of our children during their minorities, in the event neither spouse in a typical joint custody situation, survives.

Some of us have concerns about providing for both a second spouse and children from a first marriage. Estate planning can involve preserving assets held jointly with one’s spouse to pass by survivorship on one’s death while maintaining non-joint assets which will form part of one’s estate for transfer to children of a first marriage on one’s death. It can involve beneficiary designations in favour of either spouse or children. Estate planning can also include the making of a Will which creates a family trust, with the surviving spouse and the children as the potential income and capital beneficiaries as well as an exclusive spousal trust, with the surviving spouse as the sole beneficiary.

I suggest it is worthwhile to ponder these issues in our lifetime, rather than leave them to the presumptive application of intestacy laws and/or the guesswork (albeit well-meaning) of our loved ones, when we are gone. A good estate plan which may include a Will, ensures that our post-mortem objectives are clearly expressed and carried out, thus avoiding expense, family disputes and even litigation.

We should also consider the usefulness of powers of attorney in estate planning. Powers of Attorney allow us to delegate personal decision-making regarding our health, personal care and medical treatment, as well as the authority to conduct our financial affairs. By naming an attorney and providing specific guidelines for the exercise of his or her power while we have the capacity to do so, we can maintain some control over the administration of our affairs, should we become incapacitated.

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