Saving Thousands By Having Your Will Drafted Properly
People generally do not like thinking about death. In particular, people do not like to think about their own. Planning for death is not far off. Yet, there can be negative consequences if you fail to properly have an estate plan. Alberta estate planning involves having three documents. These include a will, an enduring power of attorney and a personal directive. The wills and estates lawyers at Kahane Law Office can help if you want to save money through estate planning. Keep reading to learn the top 10 ways how estate planning saves money.
1) Failing To Plan For Minor Beneficiaries
If you do not have a will, or do not have a trust for minors in your will, there are several repercussions that can happen. First, the minor beneficiaries will receive all the capital in your estate at 18. Many 18 year olds are not responsible enough to receive and manage significant available cash. There is also a cost associated with these situations. Each year, before the minor beneficiary turns 18, someone will need to be trustee for any funds held in their name. As there is no will that sets this out, an application to the court for trusteeship of the minors’ funds. These applications generally cost $2,000-$3,000. If the application is contested, this amount will get more expensive. Learn more about setting up a trust in your will for minor beneficiaries.
2) Adult Guardianship Applications
A personal directive, or living will, appoints someone to make medical decisions for you. These appointments do not take effect until you are unable to make decisions for yourself. Proper Alberta estate planning includes this document. If you do not have this document in place, then someone will need to make an application for a guardianship order. These applications also cost about $2,000-$3000. Again, if there is a dispute as to whom will make medical decisions, or a dispute as to the medical treatment that you will receive, this amount can increase significantly.
3) Enduring Power Of Attorney
An enduring power of attorney appoints someone to make financial decisions for you. A power of attorney can be specific to a limited decision making power. It can also be very broad in scope. Either of these may be effective on signing it, on you losing the capacity to make decisions for yourself or on singing and specifically continues if you lose capacity. Once again, the cost of a trusteeship order for an adult is about $2,000-$3,000.
4) Donations to Charitable Organizations
If you leave a portion of your estate to a charitable organization, your estate may save taxes. Alberta estate planning often contemplates gifting money to charities and the estate receiving a tax receipt for same. You can save thousands of dollars by using charitable gifts in your Alberta estate planning.
5) Flexibility of Asset distribution
A will gives the executor or personal representative specific powers as to how they manage the estate. At times, it is better for an estate to keep assets and hold them in trust. The timing of selling estate assets can make a big difference in the net funds the estate has to distribute. For example, selling shares in publicly traded companies when the share price is low (or if there are significant currency exchange value differences), will leave less money in the estate than if the personal representative has the flexibility to time the disposition better.
6) Naming Specific Beneficiaries Capable of Running Your Business
Each business has its own subtle nuances. Knowing how to run that business can be tricky for an outsider. Without a will, any business that you own will be split up and divided among the beneficiaries as set out in provincial legislation. A person without business know how may devalue the business. This can occur both when the personal representative steps in to run things upon a business owners’ death, and when a beneficiary gets control of that business. In your will, you can stipulate who will get the business and run it. You can pick the best person able to continue your business legacy.
7) Guardianship of Minor Children
Children are a frequent part of Alberta estate planning. Deciding on who will be the guardian of your children can be difficult. You have to look at lifestyle, parenting style, financial and geographic factors to name only a few. If there is no dispute as to guardianship, the application to the courts can cost between $2500-$3500. Disputed applications for guardianship orders not only tear at families but are also extremely costly. A will sets out what your specific wishes are as to whom will raise your child.
8) Avoiding Family Fights
Alberta estate planning with a will helps to reduce the likelihood of a legal battle between family members. If your wishes are not committed to paper in your will, different people may have different perspectives of:
- What your wishes were
- What they were expecting to inherit
- What they were expecting others to get or not get
- Who was going to be in charge of it all.
Estate litigation is very expensive and can be very drawn out. This often happens in litigation where emotional states are elevated. In estate litigation, the estate generally is represented by a lawyer. The lawyer is paid out of the estate’s assets. Each beneficiary disputing the estate also has to hire their own lawyer. Estate litigation can cost tens of thousands of dollars.
9) Having Your Alberta Estate Planning Done When You Are Able To
With estate planning, many people leave it to the last minute. Specifically, they wait until, they are a few days away from a trip, surgery, or they have received a negative diagnosis. Having to prepare and execute a will in a very limited time frame can be more expensive than when you are not in a rush. Whenever you require a lawyer to act in a very rapid timing window, you will often have a higher premium charged. Likewise, if you are not able to get to the law office, you will likely have to pay more to have a lawyer attend at a hospital or seniors’ care facility. Depending on the situation, you may be looking at an extra $200-$500.
10) Creditor Protection, Wayward Children And Spendthrifts
Wills can be drafted to help protect beneficiaries who are not expected to manage their inheritance reasonable. These situations often include beneficiaries with addictions, poor budgeting skills or people who just make bad choices. By setting up a trust, you determine when your beneficiary gets how much. You can also set it up so that the trustee has discretion to distribute the estate to these beneficiaries in a responsible manner. In other situations, your will can set up a life estate in real property so that a beneficiary gets the benefit of the property until their own death. At that point the property will revert to the other beneficiaries. It is not possible for the life estate interest holder to mortgage or sell off the asset.
Getting Legal Help From Lawyers: Setting Up Alberta Estate Planning
The wills and estates lawyers at Kahane Law Office are happy to assist with your Alberta estate planning. We offer flat rate fees for a will, enduring power of attorney and personal directive. We even have a package that contains all three for a flat rate. You can reach us toll-free at 1-877-225-8817, 403-225-8810 locally or email us directly here.