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Estate Planning Checklist: Decisions to Make Before Drafting Your Estate Documents
Disclaimer: This article is intended for the purpose of providing an estate planning checklist. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice. It does not purport to be exhaustive.
Estate planning is a crucial process. It allows you to make important decisions about the future of your assets, your loved ones, and even your own well-being.
Whether you have a complex or simple estate, putting an estate plan in place is a gift to your loved ones. Planning ahead for the future, seeking professional advice and creating estate planning documents has many benefits. It will make your wishes clear, can help you lower probate fees and minimize your estate trustee’s liability.
In this blog, we will provide an estate planning checklist with many areas to consider. Let’s delve into some of the essential decisions you must make during your estate planning process.
The importance of a proper estate plan
A well-thought-out estate plan is incredibly important. Not only does it safeguard your assets, but it also ensures that your loved ones are taken care of, and your final wishes are honored.
It will help your estate trustee make decisions and move more quickly through the probate process. Without a comprehensive estate plan, the distribution of your assets can become a contentious and complex process, potentially leading to disputes among family members.
However, it’s not just about your last will and testament. You need important documents, such as your powers of attorney, to allow someone to make critical decisions about who will manage your financial and healthcare affairs if you become incapacitated.
Who will be your executor or estate trustee?
The executor of your estate plays a pivotal role in ensuring your wishes are carried out according to your will. Typically, spouses are named as the primary executors, but it’s important to consider alternates, such as close friends or family members, in case your spouse cannot fulfill this role. You can even select two or more individuals to act as co-executors but remember that they must work jointly to manage your estate efficiently.
Your executor administers your estate and carries out many responsibilities. Learn more about choosing the right person for your estate administration here.
What assets do you currently own (including life insurance policies, digital assets, etc.)?
You will want to make an up-to-date list of your significant assets, including any life insurance policies, real property and other items. With regards to property or bank accounts, are there any of them owned jointly with your spouse?
Do you own any foreign assets? If so, note the location if outside your province. Specify the country in which these assets are located. This information is crucial for the smooth administration of your estate, as different countries have varying laws and regulations regarding foreign assets.
Who did you choose as the beneficiary when you completed the beneficiary designation for your life insurance? It’s important to ensure that your selection aligns with your estate documents.
Who are your beneficiaries?
Making a list of beneficiaries is a fundamental aspect of estate planning. Typically, spouses designate each other as primary beneficiaries, followed by their children in equal shares. Additionally, you should plan for contingencies, such as if one of your children predeceases you, ensuring their share goes to their children (your grandchildren).
Who will be your ultimate distribution beneficiaries?
Consider who should inherit your assets if none of your named beneficiaries are alive at your death and they leave no children behind. Common choices for ultimate distribution beneficiaries include siblings, parents, cousins, close friends, or charities. Your estate planning should reflect your preferences for these scenarios.
Would you like to create any beneficiary trusts?
If your beneficiaries include minors, you have the option of setting up a trust to manage their inheritance. You can choose between a “standard” trust, where the minor receives their full inheritance at a specified age (e.g., 18, 21, 25), or a graduated trust, which disburses the inheritance in stages. Clearly define the ages, amounts, and number of disbursements preferred to meet your objectives.
Would you like to create any other trusts?
Trusts can serve various purposes, from minimizing estate taxes to providing for specific needs of your beneficiaries or even supporting charitable causes. Your decision to establish additional trusts should be guided by your financial goals and family dynamics.
Who will be the guardians of any minor children?
If you have minor children, it’s crucial to appoint guardians who will take care of them if you and your spouse are unable to do so. Typically, spouses name each other as primary guardians, followed by close family members or friends as alternates. You can also designate a second alternate to ensure the well-being of your children.
With regards to your guardians, it is advisable to make sure they know that you have chosen them for this serious responsibility.
Are there any specific gifts or cash legacies you would like to bequeath?
If you have particular items or cash amounts you wish to leave to specific individuals or charities, be sure to document these in your estate plan. These specific gifts ensure that your cherished possessions and causes you care about are remembered and honored.
It may be wise to include specific gifts as a schedule to your will. For example, suppose you want a specific piece of jewelry to go to a certain grandchild. However, you then lose that piece of jewelry before you pass away. A separate schedule makes it easier to update specific gifts without having to amend the entire will.
Who will be your power of attorney for property?
Your Attorney for Property will manage your financial affairs in the event of incapacity. Typically, spouses name each other as primary appointees, followed by alternates.
When it comes to choosing co-attorneys, you have the option to decide whether they should act jointly or jointly and separately.
Jointly: If you choose to have your co-attorneys act jointly, they must make decisions together and reach a consensus. This approach ensures that all major financial decisions require the agreement of both co-attorneys, which can provide an added layer of security and oversight.
Jointly and separately: If you opt for joint and separate authority, your co-attorneys can make decisions together, but they can also act independently when necessary. This approach balances joint decision-making and the flexibility for each co-attorney to manage specific financial aspects without needing the other’s approval for every transaction.
You also need to specify when their power of attorney will come into effect. You can decide whether it should take effect immediately upon signing or only upon your incapacity.
If you grant them immediate authority, they can begin managing your financial affairs as soon as the document is executed. This means avoiding any delay involved with determining that you are incapable of managing your affairs. However, it also means that they can make decisions without your direct involvement, which may not be suitable for everyone.
Who will be your power of attorney for personal care?
Your Attorney for Personal Care is responsible for making medical and healthcare decisions on your behalf if you become unable to do so. Typically, spouses choose each other as primary appointees, followed by alternates. Again, if you appoint co-attorneys, decide whether they should work jointly or jointly and separately.
In addition to these decisions, there are other factors to consider.
You should clearly state your organ donor status within this document to ensure your preferences regarding organ donation are respected.
Furthermore, you may want to consider whether your appointee should receive compensation for their role, as serving as an Attorney for Personal Care can be a demanding responsibility.
Lastly, suppose you hold specific religious or cultural beliefs that are important to you with respect to medical treatment and end-of-life care. In that case, it is essential to include them in your document. This will help guarantee that your healthcare choices align with your personal values, providing assurance and preserving the integrity of your healthcare decisions.
What are your burial wishes?
Finally, consider your burial wishes. This may include decisions about cremation, burial, or even specific details such as the choice of cemetery. If you have pre-planned your funeral, provide these details to ensure your wishes are carried out.
Regularly update your estate plan.
Life is constantly evolving, and so should your estate plan. Major life events such as marriage, divorce, the birth of children or grandchildren, changes in financial situations, and even changes in tax laws can all have a significant impact on your estate planning needs. By revisiting and updating your estate plan periodically, you can make necessary adjustments, address any new concerns, and guarantee that your loved ones are well-protected and that your assets are distributed as you intend.
Consulting with an experienced estate planning attorney, as well as receiving accounting or similar professional advice can help you navigate these changes and ensure that your estate plan remains a reflection of your current wishes and goals.
Get started on your estate plan today!
Estate planning is a complex process that involves making a myriad of decisions. You must carefully select of an executor, beneficiaries, guardians, and more.
Our estate planning checklist is just the beginning of creating your estate plan . When it comes to the complex legal aspects of planning your estate, Beeksma Law is your trusted and experienced partner. We primarily focus on estate law and with our estate litigation experience, we have the unique ability to craft legal documents that not only reflect your intentions but also minimize potential liabilities.
By reaching out to Beeksma Law, you can be confident that we will handle your estate planning needs with professionalism and expertise, protecting your assets and legacy for future generations.
Do I need an estate litigation lawyer
Disclaimer: This article on choosing an estate litigation lawyer is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Estate law is more than preparing a will or settling an estate after the death of a loved one. There is also the litigation side of estate law. This article is designed to help you understand if you need to pursue estate litigation and if so, what that would look like.
At Beeksma Law, we practice in a variety of areas, including estate litigation. We understand that disputes involving estates can be unquestionably difficult and emotional. We provide guidance to help our clients navigate these complicated cases, so they are able to make the best decisions for their families.
Firstly, a note for those planning their estate.
Preventing Estate Litigation
To begin with, if you are planning your estate, it is important to take steps to prevent future disputes. This includes ensuring that your will is clear and properly drawn with the help of an estate lawyer, that all assets are properly allocated, and that executors and trustees know what is expected of them. With proper planning, you can be more confident that your executor will follow your wishes and avoid disputes.
What is estate litigation?
Simply put, estate litigation is when someone seeks legal action because of a dispute involving the management, control and distribution of property within an estate.
Let’s consider some examples of when someone may want to pursue estate litigation.
- Challenging or contesting a will
- Disputes related to how the estate executor carries out their duties
- Disputes related to how much a beneficiary receives from an estate or how much the estate is worth
- Issues related to how a power of attorney is being used
- Disputes between co-executors
- Disputes between co-attorneys of a power of attorney
- Disagreements between beneficiaries
- Disputes related to compensation for the estate trustee
- Guardianship and incompetency disputes
- Disputes that arise when there is no valid will
If you think you may need to pursue estate litigation, discuss this with an estate litigation lawyer immediately. In Ontario, estate litigation is time-sensitive. You must file a claim within two years after you knew or ought to have known that there was an issue. Generally, the legal standard is that the time limit begins when a “reasonable person” would know there was a problem.
Litigating an estate claim
Let’s very broadly outline how the process works if you need to litigate an estate claim. At any point, either side can file motions requesting that the judge make an order on a certain issue.
First, one party files a claim, along with any affidavits and evidence to support those claims. Then, the respondent responds to the claim, which includes their own affidavits and evidence. The applicant may or may not reply to the respondent.
Thereafter, each party cross-examine the other under oath about the materials, as well as any affidavits that they have filed.
Mediation is mandatory in Ontario. Mediation is where a neutral third party helps the parties come to an agreement. However, if this is unsuccessful, the case goes to trial, and both sides present their evidence and arguments to a judge. The judge will make a decision and issue an order that the parties must abide by.
Resolving an estate dispute without going to trial
It’s important to acknowledge that estate disputes are highly emotionally charged. Beyond the legal issues involved, grief sometimes makes people act irrationally or want to right wrongs that have nothing to do with the facts being disputed. We understand that and therefore work hard to help our clients move forward in a healthy manner while protecting their legal rights.
Litigation is simply never the best option. Litigation is time-consuming, difficult and expensive. It does not allow you to move forward in handling the estate or putting the dispute behind you. In many instances, mediation or negotiation resolves any estate disputes.
Understanding Estate Litigation With Beeksma Law
At Beeksma Law, we understand estate litigation and how to handle it in a respectful way. With extensive experience litigating estates, we are strategic advocates when it comes to protecting your legal rights.
Book a call with our team today for your complimentary consultation.
How to Avoid Estate Litigation
Disclaimer: This article on estate litigation is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
The death of a loved one is hard enough, but for those embroiled in estate litigation, the process can be protracted, expensive, and emotionally draining.
It stands to reason that when considering what happens when you pass away, you will want to avoid the possibility of your loved ones going to court to settle any disputes. The good news is that there are things that you can do to lessen the likelihood of that happening.
This article will consider five things that you can do today to help your beneficiaries avoid estate litigation. Of course, there is always the risk of estate litigation, but creating a plan with the right group of professionals can go a long way towards estate peace.
The True Cost of Estate Litigation
Estate litigation can quickly become costly in terms of time and money.
However, the cost of estate litigation can be much more. In many cases, the death of a loved one and subsequent estate litigation has resulted in irreparable damage to the relationships between beneficiaries.
Avoiding Estate Litigation
What are some things you can do to help your estate avoid litigation? Let’s take a look at five key tips.
1. Have an estate plan
The first and most important thing you can do to help your beneficiaries avoid estate litigation is to have a well-drafted estate plan. Your estate plan should be tailored to your unique circumstances and take into account your goals for your estate. You should work with an experienced estate lawyer to create an estate plan that considers your unique circumstances.
Many think their net worth is too small to warrant an estate plan. Do not fall into this trap! Even a small estate can become the subject of a large argument – something that you certainly want to avoid.
Also, estate planning is not just about distributing your assets after you die. An estate plan can also help you manage your affairs if you become incapacitated. An estate plan can give peace of mind to both you and your beneficiaries.
2. Review your plan regularly
Your life will change. Maybe you will have children, buy a new home or cottage, or change jobs. As your life changes, so should your estate plan. Review your estate plan regularly with your estate lawyer to ensure that it still meets your goals and objectives.
3. Communicate with your beneficiaries
Your estate plan should be designed to meet your goals and objectives. However, it is also important to communicate your estate plan to your beneficiaries. Let them know what you have done and why you have made the decisions that you have. This will help to avoid estate litigation down the road.
4. Choose your executor(s) wisely
Your executor(s) will be responsible for carrying out your estate plan. Therefore, choose someone you trust implicitly and who can handle the responsibilities of being an executor.
If you choose to have co-executors, consider their relationship. If they currently do not get along, they will likely not work well together when facing the weighty responsibility of caring for your estate.
5. Work with a team of professionals
Estate planning is not something that you should do on your own. In fact, you should work with a team of professionals, including an estate lawyer, financial advisor, and accountant. This team of professionals can help you create a comprehensive estate plan that meets your goals and objectives.
An estate lawyer can help see potential difficulties that may arise and help you to avoid them. There may be provisions that you had never even considered but will protect your beneficiaries and estate. This is especially true if your estate lawyer has a practice that includes both the transactional and litigation aspects of estate law.
Working with a team of professionals will help to give you peace of mind knowing that your estate is in good
Proactive Estate Planning With Beeksma Law
Too often, estate litigation is the result of confusion and a lack of communication. By having a well-drafted estate plan, communicating with your beneficiaries, and choosing your executor wisely, you can help to avoid estate litigation.
However, estate litigation can still arise. If it does, working with a team of professionals can help to resolve the matter quickly and efficiently.
At Beeksma Law, we have a comprehensive estate practice that focuses on building strong estate plans and dealing with any estate litigation matters. This is important – our estate litigation background informs how we approach your estate plan. We have seen how disagreements can arise and use that practical knowledge to help you avoid estate litigation.
At Beeksma Law, we work closely with our clients to ensure that their estate plan meets their goals and objectives. We also regularly review estate plans to ensure that they are still up-to-date and meet our client’s needs.
The best gift you can give your family is a well-drafted estate plan. To start on your estate planning, reach out to our friendly and knowledgeable team today. We would be happy to help you achieve peace of mind.
Estate Trustee or Executor Fees in Ontario: How Much is Executor Compensation?
Disclaimer: This article on executor fees in Ontario and your estate plan is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
We have previously discussed that being an executor, or estate trustee, is a weighty responsibility. To carry out the terms of the will requires substantial time and energy. These responsibilities include collecting and distributing the estate assets (including large items like any real estate) and paying any debts.
To carry out these duties, the executor must keep accurate records of the estate accounts and all transactions related to the estate. They must also act in the best interests of the estate and the beneficiaries of the estate. Depending on the value of the estate, this can be an onerous responsibility.
It is not surprising, then, that executors often may be entitled to compensation. However, the question becomes, how much can an executor be paid for their role?
In this article, we will outline how to calculate executor fees in Ontario. We will also look at how that applies to multiple executors and others who perform the tasks of an executor.
If you are an executor, you do not need to handle this heavy responsibility alone. You should seek guidance from a lawyer to ensure you carry out your duties correctly and in the estate’s best interests.
How much is executor compensation in Ontario?
Executor fees for administering an estate are provided for in the Trustee Act. It says:
61 (1) A trustee, guardian or personal representative is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate, as may be allowed by a judge of the Superior Court of Justice. R.S.O. 1990, c. T.23, s. 61 (1); 2000, c. 26, Sched. A, s. 15 (2).
However, section 61 (5) states, “Nothing in this section applies where the allowance is fixed by the instrument creating the trust.”
What does this mean? The first step is to ask, “Does the will set a flat fee for executor compensation? Is there a clause explicitly stating an amount or percentage of the estate that will be paid to the executor?” If so, that is usually the amount that the estate executor will receive.
Generally speaking, we do not recommend including a clause in the will that will set executor compensation at a specific fee. This is because it can be challenging to determine the size and complexity of the estate beforehand. An amount may have seemed reasonable when drafting the will, but it may not be appropriate when actually administering the estate.
What if there is no provision for payment in the will?
What if there is no amount of compensation stipulated in the will? The Ontario courts have determined five factors in determining what is “fair and reasonable” compensation. These are:
- The size of the estate;
- The care and responsibility involved;
- The time spent by the executor performing the duties;
- The skill and ability demonstrated and required by the executor; and
- The success resulted from the estate administration.
In Ontario, the executor of an estate is generally paid a percentage fee – meaning it would depend on the estate value. Executors generally receive roughly 5% of an average estate. The Court has applied guidelines where an allowance is usually set at 2.5 percent for capital and revenue receipts and 2.5 percent for capital and revenue disbursements.
However, it is vital to remember that this is just a guideline. The court will ultimately decide what is fair and reasonable based on the circumstances of the particular estate. A simple estate may warrant a lower fee than a more complex estate and vice versa.
One fee for one role, no matter how many executors
In some instances, a will appoints multiple people as executors. The amounts listed above apply to anyone who is an executor. For example, let’s say that there are two executors and that 2.5% of the capital receipts is $10,000. The estate would pay $10,000 for both executors ($5,000 each), not $10,000 each.
This also applies to anyone who is not an executor but performs tasks that are part of the executor’s duties. If the executor hires someone to help with the estate, the executor will pay that person from their compensation.
Let’s use estate lawyers as an example. Estate lawyers are careful to carefully document their time. Are they performing work the executor usually does, such as notifying and reporting to beneficiaries? If so, they charge for their time as the executor.
If the lawyer were to charge the estate for those tasks, the estate would (in effect) be paying twice for the same performance. So those costs would be subtracted from the executor’s compensation.
However, on the other hand, a prudent executor is expected to seek out professional advice to ensure that the estate is being administered properly. In that instance, the lawyer would charge their time to the estate, and not deduct it from the executor’s compensation.
Navigating Estate Planning and Executor Fees in Ontario
The role of executor comes with many responsibilities. It can be a daunting task, made even more complicated by the fact that executors are not always familiar with their duties.
That is where we come in. At Beeksma Law, we have a team of experienced estate lawyers who can help you navigate the executor process from start to finish. We can help you understand your responsibilities and provide guidance on how to best manage the duties of an executor.
Our breadth of experience, from preparing estate plans to handling estate litigation, gives us the knowledge and skills to help you through every step. To learn more, please book a call with us today. We would be more than happy to discuss your specific needs.