In our office, we meet with clients to discuss what types of gifts people want to leave in their will. On a daily basis, we see clients who try to give away more then they have. These clients typically arrive at our meeting with a long list of who gets what, and many times the list of who gets what if the first beneficiary dies can be even longer. However, many times after we examine the person's assets and analyze what amount of tax will need to be paid upon their death along with any items that have a beneficiary listed on them, such as life insurance, we discover that the number of gifts exceeds the value of the estate.
Cash gifts are easy for an executor to figure out and pay. If you have an $800,000.00 estate and leave $150,000.00 each to your 4 children, and the residue of your estate to your spouse - we know exactly who is getting what - perfect planning. However, in a recession when real estate and investments go down, and if you live a long vibrant life and spend your money, we may discover after your death that the value of your estate is less then $600,000.00. If your estate is now worth under $600,000.00, guess what, both your children and your spouse will not get the gifts you had envisioned and litigation may arise.
When you are thinking about gifts you want to include in your will, think about including a flowchart for a variety of situations so that you will be sure that once all specific cash gifts are distributed, and CRA is paid the estate will not have a negative balance. Speak with your lawyer about ways in which your will can be drafted so that overall intentions will be carried out regardless of significant changes in the net worth of your estate.
If you have questions about specific gifts in your will, call our office to discuss. My team and I are here to help. 780-458-8228
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