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Estate Planning Archives

Moving to the U.S. and Retirement Plans

Persons emigrating from Canada are deemed to have sold all of their property, with some exceptions such as real estate in Canada and retirement plans, for fair market value proceeds and are subject to tax on any resulting gains. Once resident in another country, a person may be subject to tax in both Canada and the other country on income and gains earned on such property depending on the nature of the property and the relevant tax treaty, if any. Double taxation may also result on future withdrawals from Canadian retirement plans.

Leaving Wealth Well to the Next Generation and Beyond

From time to time in the news we read about wealthy celebrities and business magnates who have publicly stated that their offspring should not expect to receive any sizeable inheritance upon the parent's death. In recent years, these pronouncements have come from a variety of people including Sting, Warren Buffett, Bill Gates, Gloria Vanderbilt and the late Dame Anita Roddick (founder of The Body Shop).

Estate Planning Considerations for Blended Families

Blended families have become common, raising additional complexity for estate planning primarily due to differences in family dynamics and objectives. A failure to take these differences into account often leads to acrimony and disputes, which may irreparably damage family relations and thwart the estate plan. To minimize disputes and to ensure objectives are fulfilled, it is important to build safeguards into the estate plan.

On Death and Dying: The Supreme Court of Canada's Landmark Decision in Carter v. Canada (Attorney General)

There is no doubt that Carter has caused an enormous cultural shift for Canadians as Canada joins the few but growing number of jurisdictions that have decriminalized physician-assisted dying, including Belgium, Luxembourg, the Netherlands, and in the United States, Montana, New Mexico, Oregon, Vermont and Washington.

Dispute-Proofing Your Estate Plan

It's common knowledge that we are at the leading edge of an avalanche of wealth transfer. Baby boomers in increasing numbers are heading into their retirement years and beyond. The succession of capital that will occur is unprecedented. In the recent past, we've also seen higher average annual divorce rates and lower rates of marriage than say 50 or even 25 years ago. Added to the mix of wealth transfer and blended, non-traditional and sometimes dysfunctional families is another topic we've written on periodically in the past--greater proportions of the population living in diminished states of capacity for extended periods of time, dependant on family and friends to act as their substitute decision makers. In certain families, any combination of these ingredients can be a recipe for a nasty and prolonged estate dispute and general fractiousness.

The Importance of Updating your Affairs on Separation and Divorce

Updating your estate plan on separation and divorce in a timely manner is critical in order to avoid unintended results, possible later disputes, and even litigation. The following highlights some of the most common concerns, as well as precautions to take.

Heads Up: Grappling with Family Law's Treatment of Discretionary Trust Interests

Discretionary trusts are common estate planning tools used for a variety of reasons such as tax minimization and general wealth protection, including protection on matrimonial breakdown and from creditors. These trusts are often used in an estate freeze where shares in privately-held corporations are "frozen" to defer capital gains liability which might otherwise arise on a shareholder's death in favour of the next generation where the "growth" shares are held by a trust. Margaret O'Sullivan's recent paper "When Trust Law Meets Family Law" provides a review of discretionary trusts and their recent treatment by matrimonial courts in several jurisdictions. My post highlights some of the observations and concerns raised in Margaret's paper.

Beneficiary Designations - Problems and Pitfalls of Using Financial Institutions' Standard Forms

The case of Kilitzoglou v. Cure highlights the confusion and difficulty sometimes caused when an issuer of a life insurance policy or retirement plan requires a beneficiary designation to conform to its standard form and rules. In that case, the deceased filed a change of beneficiary designation form with Trans-America which was rejected on the basis that it did not precisely set out each beneficiary's entitlement on a percentage basis.

Paying for What You Get: General Considerations for Compensating Executors, Trustees and Attorneys

One aspect of estate planning which is often not considered is how executors, trustees and attorneys should be compensated. Yet compensation claims are a frequent matter of contention and resentment, create disputes between executors, trustees, attorneys and beneficiaries, and can even result in litigation. Common scenarios include the executor, trustee or attorney claiming more than the beneficiaries believe they deserve, or the executor, trustee, attorney and beneficiaries not understanding what compensation is permissible and/or reasonable. Disputes can be minimized with advice and planning which address how the person who is going to do a very important job will be paid for their time and care.