Tips from an Estate Lawyer

Maya originally prepared this article as a guest post on the blog of Roberts Portfolio Management.

Bring up the topic of estates at any dinner party, and you are likely to be bombarded by horror stories. Probate taking years to complete! Accounts being locked or frozen! Beneficiaries waiting months or years for their inheritance, if the Executor hasn’t run off into the sunset with it!

Although these stories come up, there are many ways to leave a clean, efficient and stress-free estate for your family to manage after your death. Here are some thoughts from a practicing estate lawyer on how to ensure your estate runs as smoothly as possible:

1. Complete a Will – We are always surprised that people often fail to complete a Will, given how easy they are to get completed (and given the risks associated with not having one). Do you have a blended family? Step-children? A corporation? Do you want to make charitable bequests or leave a legacy? If you do not have a Will, none of these issues will be covered off, which often leaves a mess. In addition, there is no Executor who can start to work on estate matters immediately. Working with your financial planner, accountant and an estate lawyer can ensure that your estate flows to the proper beneficiaries with ease while ensuring that taxes are paid.

2. Ensure your Designated Beneficiaries are Updated Regularly – I can’t tell you how often we have clients arrive at our office and realize that their RRSPs (often with the majority of their assets!) are still designated to an ex-spouse! Reviewing your designated beneficiaries on RRSPs, RRIFs, TFSAs, life insurance policies, and pensions regularly is good practice to ensure the assets flow to the proper person and that you don’t end up giving someone an unintended windfall.

3. Be Careful with Joint Assets – A very common request from our clients is that they would like to add a child to an account or title of their property to “avoid Probate”. Probate fees in Alberta are relatively low and currently, there is no provincial estate tax. So avoiding Probate is not as much of a concern in Alberta. As an estate lawyer, we all too often see the pitfalls of joint accounts or joint title – it can unintentionally trigger taxes, reduce your autonomy to sell or liquidate assets, and can make those assets subject to a child’s creditors or a matrimonial property claim. Approach joint assets with caution!

4. Assets Outside Alberta? – Many people have a cabin in British Columbia, a vacation property in Phoenix or a timeshare in Mexico. Each of these assets can cause headaches for those left behind if they are not addressed properly, and should be discussed with your estate planners so that they can consider how to flow these assets to your beneficiaries with the least amount of hassle.

5. Picking the Right Executor – Often, choosing an executor can be the most difficult decision in a Will because nobody wants to burden a family member with the time-consuming and sometimes emotional job of winding up an estate. However, know that an Executor is often aided by a lawyer who can assist in organizing and completing an estate. Alternatively, if you do not want to name a family member or do not have family members nearby, speak to your financial advisor about hiring a trust company to act as your Executor.

The bottom line is that with proper guidance from your financial adviser, accountant and an estate lawyer, you can ensure that each asset goes to the proper place as smoothly and tax-efficiently as possible. This can be the real gift to your family members, who can then focus on remembering you fondly, rather than ruing your estate!

This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.

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