Hey, Where did the Money Go?!!
By Martha Mingay BA, LLB
Downsizing? Decluttering? Getting your house in good shape is also a very good time to think about getting your estate plan in good order. After all, those things that you have decided were important enough to keep should also have a final resting place. Having a good estate plan in place should provide much certainty for the future of your assets and peace of mind for you.
After a sale of a major asset many people consider gifting right away to family or setting up their accounts in a way that they feel might reduce taxes or probate fees. Clients often focus o
n “keeping things simple” and “not paying taxes” as their estate plan goal. However, steps they take based on such an objective may not lead to the result they actually intended.
So when clients ask: “Should I put all my accounts and real property joint with my son or daughter?” The answer to this loaded question really starts with a series of probing questions such as:
- Do you have a Will?
- Will a joint account accomplish, override or undermine your Will dispositions?
- What is the composition of your family and the dynamics among family members?
- Do the intended joint owners have their own Will?
- Are they easily influenced by spouses or are they going through a divorce or separation?
- What happens if you change your mind about these joint arrangements?
- Do they have debts or obligations that might expose your assets to claims?
- What has been their own investment strategy and track record?
- Will a change in ownership now trigger an unexpected tax consequence like a capital gain or deemed disposition?
- Is there any potential for abuse of the situation, particularly if you can no longer make your own decisions?
- Will you wake up one morning wondering: “Where did the money go?”
Joint ownership can be an important part of your estate plan but it is not usually best to rely on that alone - Sort of like having a car without a steering wheel. It might be hard to end up where you intended to go. Similarly, tax planning is different than tax avoidance! At the very least, you should have a Will in place that compliments your ownership arrangements, incorporates contingencies and reflects a carefully thought out means to achieve your intentions. A simple Will does not always equal a good one. The language we lawyers use in the drafting of Wills might be complicated at times but it serves a purpose. At Mingay & Vereshchak we take the time to help you map out the best route to get to your own estate plan destination in the context of your personal situation. Our goal is to make sure those you leave behind know where the money is supposed to go and that the right vehicles are in place to take them there!
To see about mapping out your estate plan contact:
Martha A. Mingay, Barrister & Solicitor,
Mingay & Vereshchak,
81 Main Street North,
Markham, Ontario. L3P 1X7
905 294 0550