What is a Timeshare?
In simple terms, a timeshare is ownership of a property (typically, a vacation home) for a limited period of time (one to two weeks).
As all timeshare contracts are different, it is important to understand the specific terms of your agreement. In addition to maintenance fees, owners may be required to pay a special assessment if, for example, structural damage occurs to the property. Many timeshares are old and need to be reconstructed, and the cost of this could pass on to the owners if there is a provision in the contract stating so.
Inheriting a Timeshare
Most timeshare agreements include an “in perpetuity clause”, meaning that the individual who inherits the property can be required to pay the annual maintenance fees for the length of time it is owned. This obligation would pass on to any individual who inherits the timeshare upon the original owner’s death. While the beneficiary can be held liable for this...
Blended families are becoming increasingly common and often face several estate planning challenges. Consider the following scenario:
Don and Pat were married in 2000, and it was a second marriage for each of them. Don had 1 child from a prior relationship, and Pat had 3. Don and Pat had equal financial assets at the time.
While drafting their wills in 2009, Don and Pat agreed that all property would transfer to the survivor of Don and Pat on the death of the first of them. They also agreed that, on the death of the survivor of them, all property would be divided equally among their 4 adult children. Their wills were drafted accordingly and endorsed.
Five years later, in 2014, Pat passed away, leaving Don to inherit all of the couple’s property. In 2017, Don endorsed a new will. The new will did not include any mention of Pat’s children, and so Pat’s 3 children could not inherit anything from Don and Pat’s estate. Don’s singular child...
Family Trusts are a powerful and effective financial planning and asset protection tool. Traditional reasons for creating a trust include will and succession planning, asset and legal liability protection and asset administration.
However, trusts have evolved as a tax planning and minimization tool, especially for the family business and high net-worth individuals. In many instances Trusts were created solely for tax purposes.
In response, the Government of Canada has slowly been closing tax "loopholes" where trust structures result in favourable tax results and income splitting opportunities. The introduction of the TOSI (Tax on Split Income) which restricts income splitting with individuals not actively engaged in the related business.
Nevertheless, access to multiplication the Lifetime Capital Gain Exemption remains, as well as the opportunity to split some investment income.
Here are 10 administration practices to follow to avoid reassessment from CRA Trust...
When thinking of the legacies you are leaving people, it can be difficult to decide what to give and to whom. Money is often a large part of inheritance, but perhaps there are certain items you wish to bequeath to family and friends as a way to remember you. To whom and what you bequeath is an important consideration that is worthy of as much time as is put into considering your residuary beneficiaries.
What are the main concerns?
What you leave to your loved ones after your passing can define the legacy left to them. Being too ambiguous in leaving heirlooms opens the door for litigation and disputes over the distribution of your personal property after you pass. While it is possible and recommended to bequeath items you know you want to pass on in your Will, your collections and personal property may change from when you have a Will created and when you pass. It is always possible to leave a memorandum that directs your executor to distribute your...
Appointing an Executor to administer and handle your estate is an important decision. This is the person (or people – or organization) that you are entrusting with the disposition of your property and possessions. Basically, your Executor will grant your final wishes.
Here are three things to consider when appointing an Executor:
It is important to take the qualifications of your Executor into consideration. While they are not required to be an expert in finance or in law, they may be more comfortable in the role if they have had experience submitting taxes, selling a home, locating assets, paying debts, etc. This consideration strongly corresponds to your Executor’s age. Many people want to name their children as Executor – and while it depends on the situation at hand, our office generally recommends a minimal age of twenty-five (25) years;
While the disposition of your estate is largely...
A bank account held jointly by spouses has many benefits – one being convenience. It enables both parties to deposit or withdraw monies in accordance with any guidelines set by the account. The pairing may choose to hold a primary joint account that is used to pay bills with ease, and to hold additional accounts in each of their individual names – and that is fair, but if the intent is to avoid probate altogether, this may not be functional.
If spouses hold a bank account jointly and one spouse passes away, the surviving joint owner will automatically obtain the deceased person’s share. This is known as a survivorship right, and it could facilitate the bypass of probate, but only if ALL assets are held jointly.
If not ALL of assets are held jointly by spouses, the accounts held in any one person’s name will form a part of the residue of their estate. If their spouse is the primary beneficiary on their Will, the spouse will still inherit the funds, but they...
Family cabins provide memories of times sitting in the sun, sipping wine or drinking beer, however for some families the cottage goes from being the family castle to being the family haunted house.
Whenever a married couple owns a family cottage their wills should state who gets the cottage after the last of them dies. Many time the couple will want to give the cottage equally to all their children equally. While other times people may want to create various other vehicles for the ownership of the cottage such as the creation of a family to purchase the cottage, creation of a family trust, or a shared ownership agreement for the land. All of these schemes have their own positive and negative points and each families circumstances will determine which mechanism is the correct way to deal with the cottage.
The best time to determine what should be done with the family cabin is when you are alive. After you die the options for handling this asset are extremely limited. If...
It is this premise that serves as the foundation for determining how funds will be distributed in a joint bank account. The exact definition of “intent” becomes an issue when a parent holds a joint bank account with their child – let us explain:
Parents may hold a bank account jointly with their children because:
While the right of survivorship is presumed when spouses hold a joint account – in other words, the account is recognized as a gift – there is no such presumption for an account held between a parent and child. For the surviving child to be entitled to the account, they must establish the parent’s (the transferor’s) intent to provide them with this right. Both parties depositing funds into the...
These days, blended families are more common than the traditional nuclear family. As a grandparent who has step-grandchildren, you may wish to understand who will inherit should you leave a portion of your estate to your “grandchildren”, or should you provide in your Will that if your child pre-deceases you, their share will go to “the deceased child’s children”.
In Alberta, step-grandchildren are not automatically included in a Will. Unless you or your child adopts a step-grandchild, they are generally not treated as a member of your family from a legal perspective. As a result, unless step-grandchildren are explicitly included in your Will, they will not inherit.
Some grandparents wish to include their step-grandchildren as fully as their biological or adopted grandchildren, and others prefer to leave their step-grandchildren out of their Will. It is entirely up to you and will likely depend greatly on your...
Each blended family is unique. Maybe your second marriage happened later in life, after your children and your spouse’s children became adults; as a result, maybe you don’t want to include your stepchildren in your Will. On the other hand, you may have a very close relationship with your stepchildren, having raised them as if they were your own. In this case, you may very much want to ensure that they get to share in your estate when you die.
If you DO want to provide a stepchild with a share of your estate, it is crucial that you make a Will. The current law in Alberta is such that if you die without a will, your stepchildren will have no claim to your estate as they will not fall under the definition of “descendants” set out in the legislation. The law does not take into account how close you may have been with your stepchildren or how long you were involved in raising them.
If you don’t have a Will, your stepchildren will get...