Wills Group Presentation

11Carr & CompanyCarr & Company

WHO GETS MY ESTATE?How do I plan my will?

WHO GETS MY ESTATE?How do I plan my will?

Larry P. Carr, Q.C.Larry P. Carr, Q.C.August 31, 2009August 31, 2009

Participants in this discussion group are advised that this is a “public” meeting, and that no solicitor-client Participants in this discussion group are advised that this is a “public” meeting, and that no solicitor-client privilege attaches to any disclosure made to the group discussion Leader. Further, participation does not create privilege attaches to any disclosure made to the group discussion Leader. Further, participation does not create a solicitor - client relationship and does not prevent the group discussion Leader from accepting a retainer a solicitor - client relationship and does not prevent the group discussion Leader from accepting a retainer from anyone adverse in interest to any of the participants.from anyone adverse in interest to any of the participants.

Tel. 780.425.5959 / Fax. 780.423.4728 / [email protected] / www.carrlaw.comTel. 780.425.5959 / Fax. 780.423.4728 / [email protected] / www.carrlaw.com900 The Phipps-McKinnon Building, 10020 - 101A Avenue, Edmonton, Alberta,T5J 3G2900 The Phipps-McKinnon Building, 10020 - 101A Avenue, Edmonton, Alberta,T5J 3G2


Your Business Law Your Business Law Strategic PartnersStrategic PartnersYour Business Law Your Business Law Strategic PartnersStrategic Partners

Client Focused SolutionsClient Focused Solutions Business SolutionsBusiness Solutions Litigation and Collection SolutionsLitigation and Collection Solutions Personal Financial SolutionsPersonal Financial Solutions

Wills and Estate PlanningWills and Estate Planning Estate AdministrationEstate Administration Real Estate Purchases and SalesReal Estate Purchases and Sales


Wills / Enduring Powers / Wills / Enduring Powers / Living WillsLiving WillsWills / Enduring Powers / Wills / Enduring Powers / Living WillsLiving Wills

- - What’s the Difference?What’s the Difference? Living will: person, while alive

Appointment of AgentAppointment of Agent Preferences as to medical treatment (experimental, maintain Preferences as to medical treatment (experimental, maintain

life, organ donations); style and place of living; activities life, organ donations); style and place of living; activities and associationsand associations

Enduring Power: Assets, while alive - specific authority; “springing” / “immediate”

Will: Assets, after death


Wills and Estate PlansWills and Estate Plans - What’s the Difference?- What’s the Difference?Wills and Estate PlansWills and Estate Plans - What’s the Difference?- What’s the Difference?

WillWill: a document providing how one’s : a document providing how one’s estate is to be distributedestate is to be distributed

Holograph WillHolograph Will: wholly by the testator’s : wholly by the testator’s own handwriting and signatureown handwriting and signature

Estate PlanEstate Plan: plan to preserve and : plan to preserve and enhance the size of one’s estate, enhance the size of one’s estate, minimize minimize taxes, and accomplish certain taxes, and accomplish certain specific specific objectivesobjectives


Estate PlanningEstate Planning - - Where do I start?Estate PlanningEstate Planning - - Where do I start?

Matters to be considered:Matters to be considered:Estate assetsEstate assetsExecutorsExecutorsGuardiansGuardiansBeneficiariesBeneficiariesPowers of ExecutorsPowers of Executors


ESTATE ASSETSESTATE ASSETSWhat are estate assets?What are estate assets?ESTATE ASSETSESTATE ASSETSWhat are estate assets?What are estate assets?

For Tax purposes (capital gains tax)For Tax purposes (capital gains tax) any property that passes or benefit that arises “as a any property that passes or benefit that arises “as a

result of the death”result of the death” no capital gains tax on transfer to spouseno capital gains tax on transfer to spouse

For Will and Probate purposesFor Will and Probate purposes excludes “joint” propertyexcludes “joint” property excludes “direct benefits” - life insurance; pension excludes “direct benefits” - life insurance; pension

death benefits; RRSP and TFSA trust contributionsdeath benefits; RRSP and TFSA trust contributions


ESTATE PLANNINGESTATE PLANNINGAvoiding or deferring capital gainsESTATE PLANNINGESTATE PLANNINGAvoiding or deferring capital gains

Capital gains tax: 50% of gain taxed Exemption:

CCPC or farm (enhanced exemption)CCPC or farm (enhanced exemption) transfer to spousetransfer to spouse

Estate “freeze” inter vivos inter vivos trusttrust transfer to corporation with preferred shares to parents transfer to corporation with preferred shares to parents

and common shares to beneficiariesand common shares to beneficiaries


ESTATE PLANNINGESTATE PLANNINGAvoiding probate feesESTATE PLANNINGESTATE PLANNINGAvoiding probate fees

Cost of probate: legal - suggested $2250 + 1% “Court” costs - generally .006% to a

max. of $400 for estates > $250,000 have 2 wills use “joint” property be careful: re insurance and RRSP benefits to

estate


ESTATE PLANNINGESTATE PLANNINGLife Insurance and Charitable GiftsESTATE PLANNINGESTATE PLANNINGLife Insurance and Charitable Gifts

Is there any one you would like to benefit?Is there any one you would like to benefit? Spouse, dependant child, church, charitySpouse, dependant child, church, charity

Term life, whole life, universal lifeTerm life, whole life, universal life offset taxes by charitable giftoffset taxes by charitable gift pay taxes with life insurancepay taxes with life insurance ““charitable remainder trust” - keep use and charitable remainder trust” - keep use and

incomeincome


ExecutorsExecutorsExecutorsExecutors

Duties: Duties: to liquidate and distribute; to administer truststo liquidate and distribute; to administer trusts

CorporateCorporate Individuals Individuals

joint; alternate; advisoryjoint; alternate; advisory out of province - bondingout of province - bonding beneficiariesbeneficiaries

Remuneration Remuneration +/- 5% capital; +/- 5% revenue+/- 5% capital; +/- 5% revenue


Guardians & BeneficiariesGuardians & BeneficiariesGuardians & BeneficiariesGuardians & Beneficiaries

Guardian:Guardian: care of infant children; Non-binding direction: what’s best

Beneficiaries:Beneficiaries: Family Relief and Matrimonial Property Act Debts, funeral expenses and taxes Personal and household effects: distribution “in kind”; lists and

“tags”; use for minor children

Specific Legacies: specific item, $ or % Residue: common disaster

Testamentary TrustsTestamentary Trusts

Trust set-up in the will – permits Graduated taxes, as an individual Reduction in taxes by allocating income to persons in

lower tax brackets Control of estate

Spousal trust trust for care and education of children - until age? Discretionary trust – protection against spendthrift beneficiaries,

creditors, divorce, etc


Powers of ExecutorsPowers of ExecutorsPowers of ExecutorsPowers of Executors

tax elections; allocating gains; allocating revenuestax elections; allocating gains; allocating revenues fixing values; retaining assets and investmentsfixing values; retaining assets and investments borrowing moneyborrowing money investments - prudent investor ruleinvestments - prudent investor rule carry on businesscarry on business payments to guardianspayments to guardians hiring of professionals - trust company, accountant, hiring of professionals - trust company, accountant,

lawyerlawyer remuneration of executors; bondingremuneration of executors; bonding


WILLSPitfalls to avoidWILLSPitfalls to avoid

RRSP and insurance beneficiaries; RRSP and insurance beneficiaries; “segregated funds”“segregated funds”

Common disaster problemsCommon disaster problems Minor beneficiaries - Public TrusteeMinor beneficiaries - Public Trustee % to charities% to charities Bonding for executorsBonding for executors Investment powers for trusteesInvestment powers for trustees Lack of clarityLack of clarity

CostCost

Simple will (no testamentary trust)Simple will (no testamentary trust) Single: $399; spousal (mirror): $199Single: $399; spousal (mirror): $199

Will with testamentary trust: Will with testamentary trust: $1299 ++$1299 ++

Living will (personal directive)Living will (personal directive) Single: $299; spousal (mirror): $149Single: $299; spousal (mirror): $149

Enduring Power of AttorneyEnduring Power of Attorney Single: $299; spousal (mirror): $149Single: $299; spousal (mirror): $149

(25% discount on package of Will, PD, EPA: $748 single, (25% discount on package of Will, PD, EPA: $748 single, $1120 double)$1120 double)


WILLS and ESTATE PLANSSteps to takeSteps to takeWILLS and ESTATE PLANSSteps to takeSteps to take

1. Prepare detailed listing of assets and 1. Prepare detailed listing of assets and liabilitiesliabilities

2. Do a tax calculation (capital gains, recapture, 2. Do a tax calculation (capital gains, recapture, RRSP’s and RRIF’s) RRSP’s and RRIF’s)

3. Determine who you want to benefit3. Determine who you want to benefit

4. Consider estate freeze, 4. Consider estate freeze, inter vivosinter vivos trust, trust, offshore trust, life insuranceoffshore trust, life insurance

5. Consult estate planning professionals5. Consult estate planning professionals

Wills Group Presentation

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