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Vacation Properties: How should these be included in my estate plan?

The number of Albertans looking to purchase a vacation property is growing every year... and that’s not surprising! There is nothing better than owning a chalet for weekend ski trips, or a house in Palm Springs, or a place on the golf course in Phoenix.  However, if you own a vacation home, you need to ensure that you have taken it into consideration when you are making your Will and planning your estate.

Something that many families fail to consider is how the location of a vacation property can impact their estate planning.  This is an important consideration because the way that you protect and pass on your vacation property will depend on the applicable laws in the country or province where the property is located.

For example, by owning property in the USA, your estate will be liable for both US and Canadian estate taxes.  Further, by owning property in the USA, you will have two estates that will need to be settled, adding considerably to the amount of...

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How should I include the family cabin in my estate plan?

Many Albertans have fond memories of spending long summer days at the family cabin with parents, siblings, cousins, grandparents, and aunts and uncles – and their intention is usually that future generations will be able to enjoy this family cabin experience as well.  As a result, passing on the family cabin is often a priority when creating an estate plan.  Unfortunately, complications may arise, both tax and otherwise, that can create challenges.

Whether you decide to transfer the cabin while you are still living or as part of your children’s inheritance, capital gains tax will be owing to the extent of any increase in the value of the property.  Some people try to get around these issues by listing their children’s names on the title to the property, but this too can create significant financial and emotional issues for families. 

Some of these issues are as follows:

  • If someone in the family divorces, a portion of the cabin property’s...
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The Top 10 Things Your Kids Don't Want

estate planning May 01, 2019

The following is excerpted from No Thanks Mom: The Top Ten Objects Your Kids Do NOT Want (and what to do with them) by Elizabeth Stewart.

In the following list of the Top Ten Objects Your Kids Do Not Want — inspired by conversations (or lack thereof) about my keepsakes with my 30-year-old son, Lock, and his wife, as well as by similar conversations I’ve had with hundreds of boomer clients and their millennial heirs — I will help you find a remedy for dealing with each:

No. 10: Books

Unless your grown kids are professors, they don’t want your books. There are a couple common mistakes my clients make in valuing books:

The 17th-century books are likely to be theological or grammar-based, and are not rare. The 19th-century books are probably not in good condition, and since most came in a series or set, it’s unlikely you’ll have a full (valuable) set.

Remedy: If you think the book is relatively common plug the title, author, year of...

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Communication: How does it prevent estate litigation?

estate planning Apr 17, 2019

The merging of blended families and the resulting combined estates has created the perfect storm for a flood of estate litigation. Beneficiaries, or people who think they should be a beneficiary, are lawyering up and heading to court like never before to fight for their perceived right to a piece of the pie. Justice is a relative concept depending on where you sit and the fight for this style of justice has never been more expensive.

My advice to clients who are upset and want to fight about the principle of the matter has always been the same…settle quickly and be angry at the person who left the mess. Why? There is an easy way to prevent estate litigation.  The person writing the Will has to lift the veil of secrecy around their Will.  The easiest way to do this?  Hold a family meeting where the beneficiaries can be told about your estate and what their inheritance will be, if any. Holding this meeting may seem a little daunting, but this is a much better way...

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Puppy Love: Who will take care of your pets when you are no longer around?

estate planning Mar 13, 2019

Our office is seeing more and more people who are worried about not only what happens to their children when they die, but also who will be taking care of their beloved pets. 

Our lawyers recently met with a vibrant middle-aged client who had a beloved pet Cockatoo named Tootsie. Our client wanted to make sure that Tootsie went to a good home after she died and needed to make sure that the person who took care of her liked birds. She had asked her friends, but given there ages, they were worried about agreeing to take care of Tootsie. You see, Tootsie had a projected lifespan of almost 40 years, and many of our client's friends may not be around to make sure she had a home.

In that case, we found a local bird trainer who agreed to take care of Tootsie if and when our client flew off to the great blue yonder! To ease the cost burden on the bird trainer, we left her $5000.00 in the will to be used for the care of Tootsie. 

In addition to the legacy,...

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Five Estate Planning Questions for a Family Business

business estate planning Mar 06, 2019

Sadly, many family businesses don’t survive after being transferred to the next generation.  This is often due to a lack of effective succession planning – and a vital component of any succession plan is careful estate planning!

Take a moment to consider the following estate planning questions:

  • Do you have a buy-sell agreement with any co-owners of your business that will be triggered upon your death? If yes, do you understand the effect of these provisions and is your family aware of them?
  • Do you have a plan in place for if you are incapacitated before transferring your ownership interest in your business?
  • Have you appointed a successor or established a process for selecting a successor for your business?
  • If you are leaving the business to a family member, have you made arrangements to give other family members assets of similar value?
  • Have you taken steps to minimise the potential tax liability related to your business that your estate may face upon your death?
...
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Succession Planning With a Family Business

business estate planning Feb 27, 2019

One of the most preventable causes of a failure to sustain a family business across generations is a lack of preparation and in particular, the development of a succession plan. Unfortunately, a considerable portion of family businesses have no succession plan in place.  

Below you can find a list of a few simple steps that can be taken within a family business to increase the chances of a smooth transition of the company from generation to generation.  Of course, there are numerous more technical estate and tax planning tools that should also be considered, and we recommend that all owners of a family business consult with an estates lawyer to learn more about these tools.

COMMUNICATE – ALWAYS COMMUNICATE!

Communication is key to ensuring that all of the parties involved understand their roles, responsibilities and expectations.  More importantly, the discussion provides that everyone agrees with the plan and is on the same page.  It is not uncommon...

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What are some of the key benefits to creating a trust?

estate planning trusts Jan 09, 2019

A Trust allows you to control your assets from beyond the grave. You can clearly outline who gets your assets, when they get them and under what regulations or situations they’re able to use them. It provides a means for you to spread your assets out and spread the tax liabilities. It also allows your assets to flow to people outside of your estate. If you create a Trust today for all your family members, that money will leave your estate and it will not pass through your Will, so it saves you some tax as well as some probate fees if you have to pay them. This becomes especially important if you have assets in the United States or if you have assets that you may not want people to know about. Trusts can be a great tool in an estate plan!

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Three Factors to Consider When Naming an Executor

estate planning executor Dec 26, 2018

1.     Pick someone who lives in the Province of Alberta:

When you are looking at picking an Executor for your estate, you want to make sure you pick somebody who lives in the province of Alberta. If you pick someone from outside of the province, we may have to post bond which can be time consuming and costly. Additionally, if you have an Executor who is a United States citizen, there can be tax implications as they are considered our foreign trustee. 

2.     Pick one individual:

When you’re looking at an Executor, pick one individual; don’t pick all three of your children. One individual can go into the house and make decisions and wrap up the estate quickly. When you appoint more than one, it becomes time consuming and a lot of times their schedules conflict and they don’t get anything done.

3.     Pick somebody who has the time:

Finally, when you’re looking to pick an Executor, pick somebody who...

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Advancing Money to Children

Sometimes our children or close family members run into a financial bind and need to borrow money. In many cases both the lender and the borrower assume that this money will be paid back quickly. What happens if the lender, who is frequently an elderly parent, dies before the loan is repaid? In my experience this is when the family feud begins, as the borrower will say this money was a gift to them, and the other beneficiaries, frequently the borrower’s siblings, will feel it is a loan that should be repaid from their inheritance. You can avoid this devastating situation by talking to an experienced estate lawyer. If your intention is to have money provided to your children by an advancement on inheritance, the amounts you have advanced should be clearly documented and you should have a clause in your Will saying any advancements are taken into consideration when the estate is divided up. If you are going to “gift” this money to the borrower, then your estate...

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