Have you been thinking about the legacy you’ll leave lately? If you are worrying about how your loved ones will fare after you’ll die or whether your assets will be distributed the way you might wish, you’ve come to the right place.
The lawyers at Merchant Law are experienced estate planning lawyers who are dedicated to helping you put your affairs in order the right way. Our services help you structure your estate in a way that ensures your chosen beneficiaries receive their assets in a smooth, hassle-free way.
Why is estate planning so vital?
If you die without a will in Alberta the courts use the Wills and Succession Act to determine where your assets will go. This is known as dying intestate. The default plan for distributing assets rarely lines up with the wishes of the decedent, and can often cause significant problems for families.
Even a will might not be sufficient to meet your needs. There are certain life circumstances that are simply too complex for a will alone.
Dying intestate means that your assets will be distributed to your next-of-kin according to the following schedule.
- 100% to your spouse, common law partner, or adult interdependent partner if you have children in common.
- If you have children from a previous marriage: 50% to your spouse, and 50% distributed evenly between your natural-born and adopted children.
- If you have neither a living spouse nor living children, your assets are distributed as follows:
- To grandchildren.
- To parents.
- To siblings.
- To nieces/nephews.
- To more distant next-of-kin.
The courts will essentially move down the list until they find the appropriate relative or relatives to give the estate to. No grandchildren or living parents? They’ll turn to your brother or sister. No siblings? They’ll turn to your nieces and nephews.
The courts will not look at the needs of the people involved, nor will they pay attention to your relationship. You can’t stand your sister but she’s your only living relative? She’ll inherit everything.
Estate planning allows you to give your money to whomever you wish. It also allows you to take actions that can preserve things that are important to you, such as the business you worked so hard to build or the family land you scrimped and saved to purchase. It gives you the power to provide for step-children if you want to, or to give your money to charity.
In short, the law recognizes your right to leave your estate to anyone you choose, but you have to exercise that right by engaging with the estate planning process.
When is it inappropriate to use a DIY or simple will to plan your estate?
While it is possible to draft a legal and valid will on your own, people who have some specific life complications should usually avoid it.
High net worth individuals should never rely on a simple will. Neither should any business owner, or anyone who owns income-bearing intellectual property. These assets are particularly valuable and need to be passed on properly to continue holding your value. If you own real estate other than the family home, such as rental properties or vacation properties, then you need an estate planner. Farmers who wish to continue passing the family farm down through the ages absolutely need an estate planner.
You should also consider an estate plan if you’ve been married multiple times, if you have dependent children, or if you have any person you want to provide for long-term. If you want to leave your assets to anyone who wouldn’t normally be covered by the Wills and Succession Act, or even if you want to divide up your assets, then you’ll need a clear, concise, and legally air-tight will.
A lawyer can give you the peace of mind that comes with knowing you’ve done your planning and you’ve done it the right way. You’ll know that the people who are most important to you will be able to continue no matter what, and that none of your hard work has gone to waste.
What should you bring to an estate planning appointment?
To make the most of your estate planning appointment, you should take the following steps.
- Put together a binder or a notebook so you have all of your information in one place, or a computer file that you can send to your lawyer.
- Decide who you want your executor to be. This should be someone who is not a beneficiary, that you trust. Your lawyer may fill this role.
- Ask your executor for permission to be named.
- Write down your executor’s contact information.
- If you have minor children, decide who you want their guardian to be in the event both you and your spouse die.
- Ask your chosen guardian for permission to be named.
- Write down the guardian’s contact information.
- Get a copy of your most recent bank statements for your:
- Checking Account
- Savings Account
- Investment Accounts
- Retirement Accounts
- Get a copy of your most recent tax returns.
- Get copies of deeds for all of your real estate property.
- If your real estate generates an income, gather profit and loss statements for those properties.
- Get copies of titles for all cars, trucks, RVs, and boats.
- Make a list of all of your collectables such as paintings, coins, comics, antiques and other art. If you’ve had these items appraised, include a copy of the appraisals.
- Get copies of all stock and bond certificates.
- Get a copy of your life insurance policy and update your beneficiaries.
- Get a copy of your business agreements, articles of incorporation, and profit and loss statements.
- Get copies of licensing or royalty agreements for any intellectual property that you own.
- Gather a copy of all your bills for all of your debts.
- Choose beneficiaries.
- Write down the name, address, phone number, date of birth, and social insurance numbers for all beneficiaries.
If you have all of this information on hand your lawyer should be able to advise you on the best way to handle your estate.
You should be prepared to go over your estate plan every three to five years. This allows you to make sure your will and estate plan continue to reflect your current asset profile, and gives you an opportunity to update the contact information for beneficiaries as necessary.
What is probate?
Probate is the process that validates a will and authorizes an executor to begin administering it.
Probate is meant to protect you, and the fees are not very high, especially in Alberta. Nevertheless, there are times when it is desirable to create an estate plan that passes some assets outside of the estate, skipping the probate process.
There are several ways to do this. Life insurance policies automatically pay out to the beneficiaries regardless of what is in the will. Trusts can be set up to pass their assets directly to your beneficiaries on your death. If you own a piece of real estate or a business with another person they generally take full ownership of the asset after you die.
If your will is poorly constructed or invalid for some reason, the probate process could end up circumventing your wishes. Working with a lawyer to craft your estate plan can prevent that problem.
How much does it cost to make a will, and how long does it take?
Wills require very little investment. A simple will can often be completed for as little as $300. A more complex estate plan that covers many assets and requires more intense legal vehicles may cost as much as $3000. These are small investments to ensure your wishes are honored after your death.
It also doesn’t take very long to get the job done. We can often complete an estate plan in 24-72 hours. If your estate plan requires us to set up trusts it may take as long as a week to get everything into place.
If you use our checklist and come to your appointment prepared the appointment itself should only take 1-2 hours. Putting together your estate plan can be easy and convenient!
What is the difference between a will and an estate plan?
A will is the foundation for an estate plan. An estate plan will always include a will, but a will alone is not going to constitute thorough estate planning for everyone.
Estate plans can also include life insurance policies, succession planning for your business, trusts, buy/sell agreements, and joint ownership agreements. It’s a full suite of legal vehicles and services used to help you pass assets to your loved ones after your death.
It will be up to you and your lawyer to create an estate plan that meets all of your needs.
What is a trust?
A trust is a legal vehicle that holds certain assets. The most common assets to place in a trust are real property and bank accounts. Every trust comes with a trustee, an individual with a fiduciary duty to the beneficiaries of the trust. The trustee manages the assets of the trust and distributes them when appropriate.
A trust can be used to pass assets directly to your beneficiaries after you die, without forcing those assets through probate. It can also be used to do what a will can’t: set conditions on how money may be used.
For example, if you want to make sure a relative can pay their hospital bills then you might set up a trust with the condition that the money inside can only be used for medical expenses. If you want to make sure a loved one can always meet their living expenses and don’t want to leave them a lump sum of money then you can have those assets paid out monthly with a spendthrift trust.
Can my relatives challenge my will after I die?
Only certain relatives may challenge your will. Your spouse or common law partner may, as may your adult children. Individuals who have a proven financial stake in the will may also issue a challenge in certain circumstances. Your own lawyer can challenge a version of a will on your behalf, and the Public Trustee can make a challenge under certain circumstances.
Wills may only be challenged if they meet one of the following criteria:
- You have a dependent, and the will fails to make adequate provisions for that person’s support.
- Your will is not legally valid.
- You were not mentally or physically capable of understanding your estate at the time that you made your most recent changes to your will.
- The challenger can prove that changes were made to the will because you were a victim of intimidation, harassment, or fraud.
- Your will is vague, poorly worded, difficult to understand, or expresses wishes which are physically impossible to carry out.
- Your will has mistakes in it which can prevent the wishes contained therein from being carried out appropriately.
Working with an estate planning lawyer can protect your will from challenges, and can ensure that you have an unbroken chain of previous wills on file in the event that the courts find they need to move to an older version of your will to settle your state.
Why choose Merchant Law?
Our lawyers have decades of experience with wills, estates, business law, real estate law, and civil litigation. We have the breadth of understanding that it takes to tackle even the most complicated estates.
Life is unpredictable. Get your affairs in order by calling (403) 237-7777 to set your estate planning appointment today. Our responsive, caring lawyers are here to help.
We have offices in Airdrie, Calgary Bowness, Calgary, Cochrane, Red Deer, and Edmonton, but we serve the entire province. We even remote appointments! If you live in Alberta, don’t hesitate to reach out. We can help! Call today to get started.