You’ve worked hard to grow your assets. Have you taken the steps that you need to take to protect your legacy?
Estate planning is vital for anyone who wants to pass the fruits of their hard work on to future generations. Without estate planning, you’re going to leave the decision of where to send your assets up to the courts.
Make sure the people you care about the most are protected. Work with an estate planning lawyer from Merchant Law to get the peace of mind that comes from knowing your loved ones are protected in the event of your death.
What happens if you die without a will in Manitoba?
Dying without a will means that you die intestate, and your assets will be distributed according to the Intestate Succession Act. This is a simplified, “default” formula for distributing your assets.
- Spouse but no children? Your spouse, adult interdependent partner, or common law spouse gets everything.
- Spouse with children in common? Your spouse gets everything.
- Spouse with children from a previous marriage? Your spouse receives either $50,000 or half your estate, or whatever’s largest. Your children divide up the rest.
- No spouse, no children? The estate goes to your parents.
- No parents? The estate goes to your siblings, or your nieces and nephews.
You can begin to see some problems right away. The Intestate Succession Act doesn’t make provisions for grandchildren. It doesn’t worry about whether or not you had any kind of a relationship with individuals who might get your money. It only worries about moving through the list.
It also only makes provisions for natural-born or adopted children. If you want to provide for step-children then you’ll need to do some estate planning.
How does probate work in Manitoba?
Probate is simply the formal process of validating a will and authorizing an executor to begin administering your estate. In Manitoba, there are no probate fees. In some ways probate protects both you and your heirs. It certainly protects the financial institutions who are holding your funds, which is one reason why financial institutions will often require the probate process.
Protecting some assets from creditors can help you manage tax consequences for your heirs. You can also protect parts of your estate from creditors and pass assets to your heirs much faster. Developing a strategy for managing probate is a vital part of the estate planning process.
Who needs a formal estate plan?
Almost anyone can benefit from a formal estate plan. While it is possible to write a will without the help of a lawyer, there are many instances where it’s not at all advisable to do so.
You should consider a formal estate plan if:
- You own more than $250,000 in assets.
- You own a business or a farm, or own multiple businesses.
- You’ve been married more than once, especially if you have children from a previous marriage.
- You have step-children you want to support.
- You have disabled family members you want to support.
- You want to give any part of your estate to charity.
- You own income-bearing intellectual property such as apps, software, or novels.
- You own multiple parcels of real property, especially if these are income-bearing properties.
- You aren’t confident that you understand how to communicate your wishes in a way that the courts will honor.
- You have assets you’d like to pass outside of your estate, avoiding probate.
- You have dependent children and want to be absolutely certain that the guardian you name is the guardian they end up with if something happens to you.
Few people have simple lives. Formal estate planning helps you make your death as simple as possible for the people who are left behind.
What should you bring to your appointment with your estate planning lawyer?
First, gather all the documents that pertain to your assets. You need to be able to give your lawyer a full and complete picture of what your estate will look like. This means bringing copies of bank statements for all accounts. You’ll want to gather all the documentation related to your businesses, your role in it, and its value. If you have intellectual property bring licensing and royalty agreements.
Bring stock and bond certificates, bring lists of collectables, bring titles for vehicles and deeds for real property. Bring copies of your tax returns. If you have a life insurance policy already, bring that policy as well.
You’ll also need to bring copies of your bills for all of your debts.
In other words: if it pertains to something you own or something you owe, bring it to your appointment!
The other thing you’ll need to do is provide the names and contact information for your chosen executor and beneficiaries. If you have minor children and plan on naming a guardian for those children in the event that you and your spouse can’t be there, then you’ll need contact information for those individuals as well. You should provide DOBs and social insurance numbers for your beneficiaries whenever possible just in case it becomes necessary to find them and difficult to do so.
Make sure you ask your intended guardian’s permission, as well as your intended executor. The courts can’t force them to fulfill the roles you’ve written for them, which means you want them to be on board.
Your first estate planning appointment will be the most thorough, but you should be updating your estate plan every 3-5 years, as well as every time you go through a life-changing event like a marriage, divorce, separation, or death in the family. Whenever you acquire new, major assets you should get in touch with your lawyer to update your estate plan as well. Treating estate planning as a lifelong process will ensure that your plan always matches your most recent asset profile.
How much does it cost to write a will or an estate plan?
Wills require only a very small investment. A simple will can be less than $300. A more complex estate plan will generally be less than $3000. Much depends on the amount of time required to adequately meet your needs, but that means that the investment amount will be proportional to the value of putting a firm, solid estate plan into place.
Wills are convenient and fast to put together as well. Our team can usually put together a simple will in less than 48 hours. A more complex estate plan may take less than a week to put into place. The appointment itself will only take a few hours.
In other words, estate planning is both easy and affordable. There’s no good reason to avoid it!
What is the difference between a will and an estate plan?
A will is one component of an overall estate plan.
The purpose of a will is to clearly communicate the ways you want to see your assets allocated after your death. It does not help you pass assets to your beneficiaries faster. It can’t protect your estate from creditors or tax consequences. It can’t dictate how money gets used. It can’t guarantee your business will exist when you’re no longer here. It can’t ensure that someone you trust takes care of you if you fall prey to dementia, nor can it communicate your wishes in the event of a medical emergency.
Other aspects of your estate plan can do some of these jobs for you. A life insurance plan can ensure heirs receive money regardless of what happens in probate court. A trust can pass even more assets quickly, and can, if you so desire, allow you to set conditions on how the money will be spent. A succession plan can help you protect your business. A medical power of lawyer and guardianship document can protect you in your old age.
When you put together a thorough estate plan your loved ones will be ready for any eventuality and will be shielded from the worst consequences of your death. It’s a comprehensive legal strategy that makes use of any number of legal instruments to ensure that your wishes are carried out.
How do trusts work?
Trusts hold assets and essentially become the owners of those assets. They are managed by a trustee, a person who has a fiduciary duty to the beneficiaries of the trust. A trust can hold bank accounts, real property, and other assets while allowing the beneficiaries of the trust to use those assets. Trustees may distribute funds from the trust when appropriate.
Trusts can accomplish several things.
First, a living trust passes outside the estate. When you die they pass to the next beneficiary that’s been named. Testamentary trusts still need to be probated.
Second, trusts allow you to have some say in how your inheritance is used. You can set them up for specific purposes, ensuring the trustee will only release funds under certain circumstances. For example, if you don’t want to give a lump sum of money to an adult child you can have the trust distribute a predetermined amount of money on a monthly basis.
Trusts are complex legal instruments. To ensure that your trusts meet your goals it’s necessary to get a lawyer involved. You may need to set up multiple trusts to meet multiple aims.
Can a will be challenged in Manitoba?
There are only three reasons why a will may be challenged in Manitoba.
The first is that the individual was not of sound mind and body when they created the will. The challenger may be claiming that you were suffering from dementia, for example, and thus were incapable of understanding your estate or the impact of your actions on the estate.
The second reason is that the willmaker was the victim of undue influence. The challenger would have to prove you were a victim of fraud, coercion, or intimidation to make this claim.
The third reason is that the will itself is fraudulent, forged, or invalid in some way.
When you work with a lawyer you protect your will from all of these challenge grounds. Your lawyer would typically know the reasons why you’re making any changes to your will and can attest to having given you advice on those changes. The lawyer can also provide evidence of your fitness to make those changes.
When a challenger is successful the courts may adjust the will, revert to an earlier version if one exists, or declare the will invalid, at which point the law reverts back to intestency. It is vital to protect your estate against these challenges and claims.
Why choose Merchant Law?
The award-winning lawyers at Merchant Law have over three decades of experience helping Manitoba residents put their estate plans into place. Our team of lawyers also has a deep reserve of real estate, business, and civil litigation experience. This experience comes in handy when it’s time to put an estate plan together.
We’re responsive, caring, and are some of Canada’s most trusted lawyers. We’re a full-service law firm capable of helping you manage every legal issue that life can throw at you. Call (204) 896-7777 to set your estate planning appointment today. We serve the entire province! Remote appointments are available for your convenience.