Wills & Estates, and Trusts
End of life planning is not easy but it is important. North & Company appreciates the need to balance personal and family needs while considering tax implications and the effect certain decisions may have on close relationships. Thinking ahead and working with lawyers and other professionals to ensure a smooth transition is crucial. This planning is not just about money. It is about ensuring your well-being, your family's well-being, and protecting family relationships.
Wills & Estates
When someone passes away the assets, debts, and associated court and other costs need to be dealt with by someone or multiple persons. This person has in the past been called the executor of the estate but more recently referred to as a personal representative (PR). The PR is responsible for locating assets, paying funeral costs, applying to the court for probate if necessary, paying off debts using the deceased’s assets, and distributing the remaining money and property according to the will. If you are a personal representative you should consult a lawyer on the proper process and steps necessary to administer the estate.
If you are over 18 years old it is extremely important you do some estate planning. Estate planning includes more than just what happens to money. It ensures that you are taken care of in the event you become incapacitated, it allows your loved ones to pay your bills when you can’t, and it helps ensure your last days are comfortable for you and easy for your family. It is even more important if you have children. Through estate planning you can appoint a guardian of your choosing for your children and a trustee to ensure they go to the best home and that they are financially taken care of.
A Will directs how your property will be distributed after your pass away. It can be as specific or as general as you like subject to certain restrictions. It also names the person or people you want to administer your estate. For parents of minor or dependent children a Will also designates guardians and trustees for them. Without a will your assets are distributed according to Part 3 of the Wills and Succession Act. In order to distribute those assets someone must apply to the court to administer the estate which cost time and money. Do you want to leave your loved one with uncertainty and extra costs right after you passed away? If not reach out to North & Company.
Personal Directives come into effect if you suffer from a serious injury or illness and are unable to make decisions about non-financial matters. The trigger for the Personal Directive is when the maker of the document loses capacity. This requires at least one Physician or Psychologist to be consulted, sometimes two. The document allows you to choose someone you trust to act on your behalf after you’ve lost capacity. Imagine you are in an accident and lose capacity. To make matters worse, you need some dental work. You cannot give consent to the dental work and so you remain in constant pain, and there is nothing your family can do to help. It’s too late. This is one of those rather have and not need, then need and not have type documents. Like a Wil and EPA, everyone should have one.
An Enduring Power of Attorney (EPA) is the delegation of authority to someone else to make financial decisions on your behalf. This authority can be given at any time and can be designed to take effect if you lose capacity. Whether is it a serious illness or you have a family history of dementia, this document allows the person you choose as your agent to take care of your finances when you cannot.
When someone passes away with money and property still in their name the executor of the estate will likely require a grant of probate or a grant of administration. Probate affirms the validity of the will and the authority of the executor to handle the assets of the deceased. A grant of administration is applicable when the deceased did not have a will and someone applies to the court to administer the estate. In either case, banks, the land titles department, and other institutions will typically not release information or assets without probate or a grant of administration. This is used to protect both the executor and institutions from liability. These processes can be tricky and it is best to consult a lawyer in these situations.
A Trust manages assets when the beneficiary of the trust may not be able to themselves, protects the assets from being eaten away too quickly, has potential tax savings, avoids probate, the details of the trust are kept private, and more. A Trust can potentially be a very important tool in estate planning. They can be set up prior to death or through the passing of a Testator.
Family and Spousal Trusts can be used to accomplish multiple goals. If you have young children and were to pass away, the assets they are entitled to would be held until they turned 18 and they would get it all. A Discretionary trust allows you to appoint someone you trust to distribute the assets the children are entitled in a discretionary manner. They have the authority to give the funds as they see fit. As another potential scenario, if you have a business and your family is unable or unwilling to take over the business you could put it in a trust with your family as the beneficiaries and appoint a trustee to manage the assets in the trust. No one wants their family to be unprotected and vulnerable on their passing. If you are curious about setting a trust for your family please reach out to North & Company
An inter vivos trust is created during the life of the person who wants to set up the trust. It holds all the benefits of normal trust with the added benefit that the person setting up the trust can appoint themselves as a trustee so they maintain control of the assets within the trust. This ensures a smooth transition of the beneficial interest in the assets of the trust and the Trust avoids probate. If you are curious about how a trust might help you North & Company is happy to talk with you.
A Testamentary Trust is set up upon the death of the testator. A Trust set up upon the death of an individual still provides the same benefits as a family and inter vivos trust. They can be effective estate planning tools. However, recent tax changes have reduced the tax benefits that trusts used to have. In spite of this, setting up a trust can still be a good tool to carry out the testator’s desires and a well drafted trust allows for the trustee to end the trust if the financial burden of the trust were to outweigh its benefits.