Peter Boys, Boys Financial Services

Are You Planning on Leaving an Estate? Part 2

estate planning

Continuing from last week, here are some more points to consider to avoid stress and conflict when planning to leave an estate to family members.

Avoid leaving conflicting documents: If you’ve signed an enduring power of attorney detailing how your assets will be dealt with in the event you’re incapacitated, that’s great! But do you have different powers of attorney documents at various financial institutions? It’s commonly done, so it’s important to ensure that all powers of attorney give authority to the same individual. If not there could be confusion around who can manage certain assets and result in gridlock in settling any issues.

Children move away: We live in a global world now, and children pursuing their careers and raising families in other provinces or countries can create challenges. For example, naming a resident of a foreign country as your executor may require that person to post a bond before acting as an executor, complicating the distribution of your estate. Further, leaving an inheritance to a child in another country dictates that you should obtain estate-planning advice that takes this into account. An example might be to leave assets to a U.S. resident child in a trust for them, to help the child avoid U.S. estate tax on those dollars later.

Complexity can come with blended families: For those in a second marriage, it’s important to consider what you’d like to have happen to your assets if you die before your spouse. Some parents would like to see their assets go to the children from their first marriage. In this case, you might leave those assets directly to your kids when you die. A spousal trust might make sense so that your spouse can receive income from your assets while they are alive, but the assets themselves will go to your children once the surviving spouse dies. This is where seeking advice from a trusted lawyer will help avoid any issues after your gone.

No will or out of date wills: If you want to create disagreements and stress for everyone involved in your estate after you’re gone, dying without a will or one that’s out of date is sure to do it. Consider a farm family with one sibling working with dad and mom for 30 years, only to find out when their parents pass away that everything is to be split between the surviving children. And the non-farming kids don’t want to be involved in the farm, they just their share in cash!

Talk to your children: This is a major cause of conflict after your gone so please be sure to make this a priority. You don’t have to share actual dollar amounts with them (although this might be prudent) but tell them what you want to happen after you’re gone. Getting their thoughts on your estate plan, particularly if it involves assets like a lake cottage or the family farm or business.

For those of you who own incorporated businesses or farms, stock portfolios, rental property or other significant assets, it’s important to leave details in the will how these will all be disposed of.

An open discussion with your family covering the issues I’ve covered here could avoid some serious problems for your family. This is where some detailed discussion and thorough planning with a trusted lawyer, accountant and financial advisor can help avoid pitfalls after you’re gone.
Image licensed through Shutterstock

Leave a Reply