Estate Planning Seminar Ian Lewer Director Planned Giving Dalhousie University

Estate Planning SeminarIan Lewer

Director Planned GivingDalhousie University

Why did the chicken run across the road?

Because his friend asked him to be his Executor

What is Estate Planning

It’s taking time to figure out what you want to achieve

It’s taking time to formally document your intentions

It’s understanding how the ‘plan’ works

It’s understanding how the ‘plan’ might change over time

It’s a process…which evolves and changes…and often needs to be revisited and reviewed

Introduction

Will’s & POA’s

Estate AdministrationExecutor duties and responsibilities

Reporting

Risk management

Tax returns

Red flags

Various Assets and how they are treated

Estate Planning

Will’s and POA’s

What is a Will?

What is a ‘living Will’?

What is a POA?

Will

All other wills are null and void

My Executor (legal representative is….)

Grant my Executor full power and authority

Instruct Executor to pay taxes, debts and outstanding obligations

Distribution of Estate

Other formal powers

Estate Administration

Executor duties and responsibilitiesFuneral arrangements

Collect & Protect

Reporting (penny by penny)

Distribution and Tax returns

Estate Administration

Reporting:Detailed reporting to beneficiaries

Communication (reasonable and detailed)

Probate (if required)

Estate Administration

Probate…what is Probate?- Public document….why bother….do I have to?- $15.53 for every $1,000 (or part thereof) over $100,000 in NS

RoT: 1.5%

Example in NOVA SCOTIA

Home $300,000

GIC’s $150,000

Other $ 25,000

TOTAL:$475,000 X 1.5% = $7,125

Estate Administration

Risk ManagementPersonal Liability Risk

Estate Risk….someone challenging the distribution….family member being ‘left out’ or unfairly taken into consideration

Asset Risk: What risks are associated with different assets?

What steps should an Executor take to minimize risk?

Investment Risk

Estate Administration

Gift Types:General: I give John $5,000 and Rita $5,000

Specific: I give John my stamp collection, or I give John my RBC shares

Residue: I give John 50% of my residue and Rita 50% of my residue

What if a beneficiary dies before testator? Per Stirpes

Gift not in existence upon death? Ademption (specific gift no longer exists)

Insufficient funds exist? Abatement

Estate Administration

Tax ReturnsPersonal Tax Return & T3 Tax Return(s)

Rights of Things? (unpaid income, declared dividends)

Clearance Certificate

Accrued interest on GIC’s and Bonds?

What if the estate drags on?

What if the deceased has not filed personal returns for prior years?

What tax minimization strategies should an Executor be aware of?

Estate Administration

Red FlagsExecutor is unwilling or unable to act

What if an Executor is acting and then unable?

Executor lives out of Province/Country

Executor(s) don’t agree on an issue

Dysfunctional family dynamics

Multiple Beneficiaries

Potential known challenges

Treatment of Various Assets

OwnershipSole ownership

Joint with Right of Survivorship (JWROS)

Tenants in Common

Registered Accounts (Tax issues???)RRSP/RRIF (beneficiary designation…under 18)

RESP

TFSA

Treatment of Various Assets

Life Insurance

Real Estate: (locks, insurance, theft, maintenance)Primary Residence

Cottage

Land in Cape Breton

Rental Properties (RED FLAG)

Cars/Boats/Recreational Vehicles

Treatment of Various Assets

Guns: Registration….are they secure?

Food in the garbage from the night before?

The ‘family’ heirlooms…who gets what….what wants what? The small things that often cause great emotional stress

Estate Planning

Taking care of loved ones

Tax minimization strategies

Creating a Legacy: Charitable GivingProvide your Executor with the authority to gift publicly traded shares ‘in-kind’

100% of your taxable in year of death and prior year