Joining us for our second Beutel Goodman Speaker Series event was Barry Corbin, of Corbin Estates Law Professional Corporation, a Toronto-based law firm specializing in tax and estate planning for small business owners and high-net-worth individuals.
Offered below are insights on some aspects of estate planning that Barry provided to our guests. Each of these items should be carefully considered by anyone contemplating leaving a legacy or revising an existing will – ideally before consultations with a lawyer begin. Please note that these points should not be considered as legal advice.
Having a will in place ensures not only peace of mind, but also that wishes are respected in terms of how an estate will be distributed, and who administers it. Working with a qualified professional to create an estate plan also maximizes opportunities to defer income tax. Dying without a will could require a personal representative to seek an administration bond at an added cost to the estate. It may also mean that not all intended beneficiaries receive an inheritance. For parents of children under the age of 18, a will is essential to ensure that appropriate persons are appointed to manage the children’s inheritance.
Rather, it’s asking someone to take on the burden and potential liability of ensuring that wishes are respected and instructions are followed as closely as possible. Potential executors should always be consulted ahead of naming them as such in a will. Some potential questions to ask may include the following:
A new will should be prepared to include, where applicable, a new spouse, new children, or possibly even an ex-spouse.
As long as they were kept separate and not commingled with a couple’s joint assets or used to purchase a property that qualifies as the couple’s matrimonial home, they will not be included in the calculation of the value of net family property for the purpose of an equalization claim.
It’s advisable to work with a legal professional to get a new will done immediately upon separating. However, a spouse may still have a claim against the testator’s estate under relevant marital property laws, depending upon the circumstances.
While it’s impossible to plan for every conceivable contingency, changing family dynamics may require adjustments to be made to a will over time. What if a family member separates from his or her spouse? Could the separated spouse claim a portion of the estate if the family member dies before the testator? What if a family member has biological children without getting married? Will these children be considered as beneficiaries? Even though these scenarios may sound unlikely, it’s important that every estate plan is kept as up-to-date as possible to reflect evolving circumstances.
Probate is the certification process by which an executor proves that he or she is the person authorized to represent a testator’s estate to government agencies, financial institutions and others. The cost of this process is covered by probate fees, also known as estate administration taxes (EAT) in Ontario, and generally amount to approximately 1.5% of the value of the deceased person’s estate. Joint ownership can reduce EAT, since the deceased’s assets would belong automatically to the surviving joint owner(s). However, this approach is not without risk. For example:
Estate planning isn’t always a cut-and-dried process. It often means asking difficult questions and making tough decisions. Working with financial and legal professionals to develop an effective estate plan is an important part of providing for future generations and ensuring peace of mind.
Barry Corbin has been providing sound advice on wills, estates and trusts for over 37 years and has offered advice on these issues to a number of government committees. He’s also a sought-after mediator within the legal community. His straightforward advice on wills and estate planning calls for parents, grandparents and children to have honest and forthright conversations about the family’s finances and how an estate will be divided.
Barry can be reached at email@example.com or by calling 416-593-4200.
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