Estate Planning Seminar Ian Lewer Director Planned Giving Dalhousie University
Dec 24, 2015
Estate Planning SeminarIan Lewer
Director Planned GivingDalhousie University
Why did the chicken run across the road?
Because his friend asked him to be his Executor
What is Estate Planning
It’s taking time to figure out what you want to achieve
It’s taking time to formally document your intentions
It’s understanding how the ‘plan’ works
It’s understanding how the ‘plan’ might change over time
It’s a process…which evolves and changes…and often needs to be revisited and reviewed
Introduction
Will’s & POA’s
Estate AdministrationExecutor duties and responsibilities
Reporting
Risk management
Tax returns
Red flags
Various Assets and how they are treated
Estate Planning
Will’s and POA’s
What is a Will?
What is a ‘living Will’?
What is a POA?
Will
All other wills are null and void
My Executor (legal representative is….)
Grant my Executor full power and authority
Instruct Executor to pay taxes, debts and outstanding obligations
Distribution of Estate
Other formal powers
Estate Administration
Executor duties and responsibilitiesFuneral arrangements
Collect & Protect
Reporting (penny by penny)
Distribution and Tax returns
Estate Administration
Reporting:Detailed reporting to beneficiaries
Communication (reasonable and detailed)
Probate (if required)
Estate Administration
Probate…what is Probate?- Public document….why bother….do I have to?- $15.53 for every $1,000 (or part thereof) over $100,000 in NS
RoT: 1.5%
Example in NOVA SCOTIA
Home $300,000
GIC’s $150,000
Other $ 25,000
TOTAL:$475,000 X 1.5% = $7,125
Estate Administration
Risk ManagementPersonal Liability Risk
Estate Risk….someone challenging the distribution….family member being ‘left out’ or unfairly taken into consideration
Asset Risk: What risks are associated with different assets?
What steps should an Executor take to minimize risk?
Investment Risk
Estate Administration
Gift Types:General: I give John $5,000 and Rita $5,000
Specific: I give John my stamp collection, or I give John my RBC shares
Residue: I give John 50% of my residue and Rita 50% of my residue
What if a beneficiary dies before testator? Per Stirpes
Gift not in existence upon death? Ademption (specific gift no longer exists)
Insufficient funds exist? Abatement
Estate Administration
Tax ReturnsPersonal Tax Return & T3 Tax Return(s)
Rights of Things? (unpaid income, declared dividends)
Clearance Certificate
Accrued interest on GIC’s and Bonds?
What if the estate drags on?
What if the deceased has not filed personal returns for prior years?
What tax minimization strategies should an Executor be aware of?
Estate Administration
Red FlagsExecutor is unwilling or unable to act
What if an Executor is acting and then unable?
Executor lives out of Province/Country
Executor(s) don’t agree on an issue
Dysfunctional family dynamics
Multiple Beneficiaries
Potential known challenges
Treatment of Various Assets
OwnershipSole ownership
Joint with Right of Survivorship (JWROS)
Tenants in Common
Registered Accounts (Tax issues???)RRSP/RRIF (beneficiary designation…under 18)
RESP
TFSA
Treatment of Various Assets
Life Insurance
Real Estate: (locks, insurance, theft, maintenance)Primary Residence
Cottage
Land in Cape Breton
Rental Properties (RED FLAG)
Cars/Boats/Recreational Vehicles
Treatment of Various Assets
Guns: Registration….are they secure?
Food in the garbage from the night before?
The ‘family’ heirlooms…who gets what….what wants what? The small things that often cause great emotional stress
Estate Planning
Taking care of loved ones
Tax minimization strategies
Creating a Legacy: Charitable GivingProvide your Executor with the authority to gift publicly traded shares ‘in-kind’
100% of your taxable in year of death and prior year