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Vancouver Wills & Estate Law Blog

Trusts can help with achievement of goals and objectives

Estate planning involves much more than a last will and testament. Establishing trusts can create opportunities for British Columbia residents to accomplish various estate planning goals. Testamentary trusts and living trusts both offer certain advantages. A testamentary trust takes effect upon the maker's death, and a living trust passes ownership of assets during his or her lifetime. 

Frequent purposes for establishing trusts include a person seeking to protect assets for children from previous relationships. Another goal is for a person to provide a beneficiary who lacks financial skills with money management guidance after his or her death by appointing a trustee to manage the assets. Continued care for a disabled child or spouse can be ensured by providing the necessary funds in a trust, or funds can be kept in a trust for certain beneficiaries, including underage children, until they reach a specified age.

Wills is where to start with estate planning

It is unlikely that any British Columbia resident would prefer the court to take charge of his or her estate. People who die without wills allow the court to decide how to distribute their assets, and that may not be done in the way they would have preferred. Estate planning can avoid such a situation.

An estate includes all property owned by an individual – also property owned with another person. These may be a home, stocks, bank accounts, jewellery, cars and more. Estate planning involves the management of all assets through life, including a time that the person may be incapacitated, and after death. The goal is to keep these documents up to date with life's events by occasional reviews.

Wills are but a small part of business succession planning

Every business owner in British Columbia likely has a vision for the business to continue operations after his or her death or when he or she becomes incapacitated. However, this is not something that will happen without careful planning. Succession planning involves more than wills, and it might be best accomplished with professional guidance.

This does not mean a will is not important. A will is the document with which to start estate and succession planning along with a revocable trust and powers of attorney for both financial and health purposes as well as a living will. With these documents, the business owner will ensure that a trusted person can take over the management of his or her affairs upon death or incapacitation. It may also be wise to explore life insurance and disability coverage at this time.

Wills: Is it possible to leave money to a secret beneficiary?

While most British Columbia readers may think a secret beneficiary would most likely be a lover or an illegitimate child, it is rarely as sinister. One man wanted to leave money to an employee who provided many years of loyal service, but he knew his spouse would not approve, so he sought a legal way to leave that person a secret inheritance. While there are options available that will keep such bequests out of wills, none of them will provide a guarantee that it would not become public in the long term, even if that beneficiary is not named in a will.

The most commonly used method is the use of a trust company that can manage the money while the person is alive. The instruction entered in the trust will be for the money to go to a particular person upon the provider's death. It will not be subject to probate and, therefore, it will not become public knowledge. Another way to deal with this is to leave the money to a trusted person -- such as a sibling -- with the agreement that he or she will give it to the secret beneficiary. However, this arrangement may be based on misplaced trust -- and the secret recipient may never receive it.

Estate litigation: What are the grounds for contesting a will?

When a person in British Columbia attends the reading of a loved one's will only to learn that he or she was disinherited or awarded a seemingly unfair portion of the estate, it will naturally make the grieving process even more difficult. If that individual believes he or she has a right to more than what was bequeathed, there might be grounds for contesting the will. However, estate litigation is a complicated field of the law, and legal counsel may be necessary.

Such a challenge is time sensitive because it must be done before the estate proceeds are distributed. When it comes to grounds for the challenge, the lack of mental capacity of the testator is a common claim. The petitioner will have to prove that the deceased lacked the mental capacity to understand the legalities and the consequences of executing the will, or changes to a previous will. Another issue could be a claim that a previous will was altered under undue influence by another person who would benefit from the change.

Estate litigation might follow disinheritance of a child

Although many parents in British Columbia plan for their children to divide their estates equally, there are those who choose to leave one or more of their children out of their will. This is not something to do without proper consideration and legal counsel because the decision could lead to estate litigation. A disinherited child may have the right to contest a will.

There are specific grounds upon which wills can be contested. It makes sense to discuss beforehand the reasons for leaving a child out of the will with an attorney. The lawyer can make a written record of your reasons, putting him or her in position to testify in support of your intentions should the will be challenged subsequently. To head off any claim of being unduly influenced by another child who might be left a greater share of the estate, that child should not take part in any consultations with the lawyer.

Wills: Medical power of attorney documents must be specific

When giving a person health care power of attorney, what is the scope of the power? This is a question many British Columbia residents may have as they consider the drafting of wills. It is an appointment that requires careful consideration because important decisions will be left for the designated individual to make.

With a medical power of attorney, a person can make decisions about health care, hygiene and nutrition. Furthermore, that person can also be appointed to decide about safety, housing and even clothing of the incapacitated person. When drafting a power of attorney document, it is important to be specific about the decisions the appointed person will have the authority to make.

Wills are not only for those who are about to retire

For some people in British Columbia, estate planning is something that is put on the back burner -- left for another day. However, those who die without wills in place may leave behind families and business partners with multiple problems to sort out. Putting estate plans in place can ensure the proper handling of assets after death, and can also help provide surviving family members with the care they need.

Although help is available, it might be a good idea not to leave it for later. Having a will is not only for those close to retirement. A will can be modified at any time, so a first draft need not be a person's final will and testament. The first step would be to identify the individuals and entities that will be included -- both family members and business partners, if applicable. At this time, it may also be wise to ensure beneficiaries on retirement accounts, insurance policies and more are up to date.

Can online wills and trusts cater for individuals?

Many British Columbia residents avoid thinking of their own mortality. With the prevalence of online facilities to create wills and other estate planning documents, some choose the DIY way -- which may not be the best option. The dynamics of each family are unique, and the materials offered online are designed as a one-size-fits-all solution.

Estate planning laws are intricate, and the legal language required is complicated but essential. Most people do not know the requirements, nor do they understand the legal terms that form part of -- or should be included -- in the documents. Without the necessary knowledge and no legal advice, the person filling in the blanks on the online form would not even know if important details were omitted.

Why are wills more easily contested that trusts?

British Columbia parents, in most cases, would not want their children to fight over their inheritances after the death of a parent. Although the majority of parents leave their children equal portions of their assets, there are circumstances in which unequal inheritances are left to the children. These are typically the cases in which children may decide to challenge the wills left by their parents, and estate planners sometimes suggest the use of trusts to avoid these issues.

A parent may leave one child less because he or she earns significantly more than another child, or one child is left funds to finance studies while the education of older siblings is completed and already paid. There may be a number of valid reasons, and it is advised that parents explain their reasoning to their children to avoid lifelong sibling rivalry. The most appropriate way to leave unequal inheritances is using a trust rather than a will.

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