A well-formed estate plan can protect loved ones, maintain a family business, save taxes, avoid conflicts between beneficiaries, take care of charitable interests, and accomplish many other objectives. After some careful estate planning discussions, there are a number of elements of a comprehensive and thoughtful estate plan, which may be appropriate in certain cases including Wills, domestic contracts, life insurance, gifts during your lifetime, estate freezes, family and other trusts, and powers of attorney for property and personal care.
A Will is an important part of any estate plan. The following are common reasons you should have a Will:
- to ensure that a large part of your assets, as legally permissible, is transferred upon death to those whom you care for;
- to appoint guardians for your minor children;
- to avoid legislation, such as the Succession Law Reform Act (Ontario), arbitrarily determining the division of your assets;
- to place the administration and control of your assets in the hands of someone you trust;
- to create suitable trust provisions to prevent your children from spending their inheritance prematurely and to avoid the Ontario Office of the Public Guardian & Trustee from controlling your children's assets until they reach the age of majority;
- to save taxes or at least defer them including by means of multiple testamentary trusts;
- to avoid conflict, litigation and unnecessary expense among family members after your death;
- to make sure certain items of special significance are given to designated individuals;
- to make charitable donations in your Will to organizations that you care about and have supported during your lifetime; and
- if you have no heirs and family on death, to avoid all assets being transferred to the government
If you live in Ontario and have valuable private corporation shares, it is sometimes useful to have a second Will which covers such shares. This technique applies to other assets that can be transferred without a probated Will. Usually how this works is that you have two Wills - the primary Will covers all your assets except the private shares, and the secondary Will only covers your private corporation shares. After your death, your executor, when probating your Will, only probates the primary Will and thus it is possible to avoid paying probate taxes on the private corporation shares which are covered under the secondary Will. As an example, if your private corporation shares are worth $2 million, and you only had one Will covering all our assets, you would pay probate of approximately $30,000 on the private corporation shares. If such shares were in your secondary Will, which was not probated, you could save the $30,000 probate fee. The more the shares are worth the greater the probate savings that can be realized in Ontario. Any Ontario shareholder with over a million dollars in private corporation shares should strongly consider using multiple Wills.
Some of the questions that we will ask when you come into our office are:
- who would you like to benefit from your estate;
- what family members are you obligated either legally or morally to support;
- what are your assets and debts;
- how are your assets held and have you made beneficiary designations;
- who would be an appropriate executor; and
- who would be a good guardian, if you have children for whom a guardian is required.
If you require assistance with you Will or Estate Planning please feel free to contact Lize-Mari Swanepoel or if you have any Philanthropy needs or concerns please contact Mark Blumberg in our Charity and Non-Profit Law Group.