Not Having a Will, Not Updating your Will and Not Having the ‘other’ Two Key Documents

Many people do up a will and forget about updating it. So much can change in terms of your circumstances, assets, beneficiaries and wishes that you need to review your will on an annual basis. Also review your will when any major change occurs in your life. For example, divorce, death of a spouse, executor or beneficiaries. You also want to have two other legal documents as well as a current will. Those are, an enduring power of attorney and a living will (for your health care decisions). For more Canadian-relevant information, go to http://www.estateplanning.ca

Not Selecting the Right Executor

Being an executor of a will can be very time consuming, stressful and complex. Many people are inappropriate choices for that responsibility. Some people don’t even ask the executor if they are prepared to assume that role, they just name them in the will, or the executor predeceases them or moves to another province or country. Consider the benefits of using a trust company as an executor or co-executor and having an alternate executor. You want to avoid hassles that will leave negative memories.

Not Taking the Necessary Steps to Protect Your Estate from U.S. Taxes

If you own any U.S. real estate, U.S. publicly-traded stocks and bonds, or certain other kinds of U.S. assets, you need special tax planning strategies. Properly done, you can save most if not any taxes applicable. Otherwise, you could end up paying U.S. estate tax at the time of your death that could be as much as 50 per cent of the market value of your U.S. assets, with little or no tax relief against the Canadian taxes payable upon your death. For more Canadian-relevant information, go to http://www.snowbird.ca.

Not Adopting an investment strategy for your RRSP’s and other investment portfolios that is consistent with your estate planning goals

Without proper investment and financial planning and implementation, there may not be enough assets in your estate to accomplish all of the requests that are 

set out in your will. For more Canadian-relevant information, go to 

www.retirementplanning.ca.

Not Understanding and Utilizing the Benefits of Trusts

There are many types of trusts that go into effect during your life or on your death that serve a variety of different purposes, all relating to saving on taxes or providing for others such as trusts for minor children are set up to look after the needs of your children until they are adults.

Not taking full advantage of second property tax strategies

If you own a cottage or another second property, you want to set up tax planning strategies to minimize or eliminate the tax consequences of leaving the cottage to other family members. For more Canadian-relevant information, go to 

www.homebuyer.ca.

Not Preparing and Updating a Personal Inventory and Information List

This step is very important. Many executors do not have any information available, which results in frustration and delay. You need to prepare a current, complete and accurate outline with details, of your financial and personal information and update it as circumstances change. For a free downloadable personal inventory profile, go to http://www.estateplanning.ca.

Not Obtaining Professional Tax, Financial and Legal Advice

With customized strategic tax and estate planning techniques, and financial planning strategies, you can definitely maximize the net assets available for those you want to remember. You can also avoid potential legal problems, for example, someone challenging your estate to obtain a financial benefit or increased benefit. You never want to do a “do-it-yourself will”. Skilled advice is cheap money for peace of mind and prudent planning. Otherwise, the government coffers will be significant and happy beneficiaries. 

Excerpted with modification, from 101 Streetsmart Condo Buying Tips for Canadians, by Douglas Gray, published by John Wiley & Sons in May, 2006. Copyright 2006 by Douglas Gray. All rights reserved. Any reproduction of this material without the author’s advance written consent is prohibited. The author assumes no responsibility whatsoever for any informa­tion provided above, as the purpose of the column is for general information only, and not intended to provide professional advice.

Douglas Gray, LL.B., formerly a practicing lawyer in Vancouver, B.C., is now a consultant, speaker, columnist, and author of 24 best-selling books. For more information, visit http://www.homebuyer.ca