Estate Planning Zen

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Estate Planning Zen

So far in my life, no one has mistaken me for a yoga instructor.

I have participated in yoga classes, I own a few pairs of Lululemon shorts, but admittedly am not very flexible.

I appreciate yoga teachers as they have learned and practiced the craft, seem truly in touch with their mind and body, and exude a sense of peaceful calmness.

I have been fortunate to practice as a lawyer in Medicine Hat for almost 30 years.  I have set up and completed many estate plans and estate adminstrations – from the simple to the complicated.

I wanted to share my insight on what things a testator (the will maker) may consider in order to make their Will and ultimately their estate adminstration peaceful and calm.

If you are interested in reaching Zen in your estate plan and administration, here are some things to consider:

  • One at a time please

In estate planning documents (the Will, Enduring Power of Attorney and Personal Directive), the client typically names 2 and sometimes 3 people to make decisions, or do things on their behalf when they die or lose mental capacity.  I have clients who want to appoint 2-3 people to act at the same time to make decisions. In some cases the number of people acting = the number of children they have.  They don’t want someone to feel left out.   Having multiple people acting concurrently, may slow down the estate administration process.

Sometimes people live in different cities and provinces.  In other cases, they are not exactly on the same page and need time to discuss and agree on matters.  In rarer cases, they dislike each other (a lot) and the lawyer may need to act as referee.

Choosing people to act one at a time can streamline the process.

  • Less means more

An estate that includes multiple beneficiaries, whether individuals (grand children, nieces/nephews) or charities can be cumbersome to administer and increase the legal fees to complete the Will and estate administration.

Each beneficiary is typically notified by the lawyer for the estate serveral times during the estate administration.

If a beneficiary is provided residue (a percentage of the estate after the bills are paid), the beneficiary will need to approve the estate distribution and the actions of the executor.

In some cases getting the approval of a large number of beneficiaries costs more in legal fees and may delay the timing of estate process if a beneficiary goes missing, is slow to respond, etc.

  • Grandchildren

Grandkids have a special place in the hearts of their Grandparents.

Including small financial gifts (like $1,000.00) to each grandchild can be challenging to administer, especially where the grandchildren are minors and funds are held in trust until they turn 21 (or 25) years old.

Options to consider are:

  • Giving the gift while you are alive
  • Giving the funds to your adult child and have them decide how to use them for the benefit the grandchild

 

  • Consolidate

While sudden injury or illness may not give you time to prepare your estate, for most people, time is generally on your side.  Do you need to have multiple banks and investment brokers?  What about the time share in Mexico or place in Arizona you are no longer using?  Even old paperwork or assets people would politely call “junk” can increase the time and fees to properly administer the estate.

The more you consolidate (and in some case purge) your assets, the easier the job for your Personal Representative to administer your estate.   Don’t forget to address the stranger assets you might own like digital assets and genetic materials (see my blog on “Stranger Gifts”).

  • Shares and shares (are not alike)

I have been involved in estates where the testator owned a small number of shares of a modest value (<$2,000.00).

In a number of cases the testator did not hold physical shares – those were kept with a company like Computershare.

The transition or sale of a small number of shares can be quite labour (cost) intensive relative to the share value.

If you own these, consider other options such as selling them, gifting them or possibly donating them during your lifetime.

  • Should you keep a secret?

Telling your children you have a will – good.  Telling your children how your estate will be divided among them – better.  Telling your children you are making an unequal distribution or leaving someone out – never happens.

Parent(s) don’t want to tell the bad news or sour their relationship with their children while they are alive.  Keeping secrets like this from your family is part of the reason why estate litigation arises.  Of course it is easy on my side of the desk to say these things.

Consider a meeting facilitated by a trusted lawyer or mediator to explain to family why your plan is set up a specific way.  I have seen how poor communication by a testator create animosity and legal challenges by children who are not treated the same or fairly.

  • Summary

Is reaching zen important to you in your estate plan and administration?  If so, tell your lawyer.  While lawyers are pretty good at teasing out what is important to their clients, getting to point is better.  By declaring what is important to you, your lawyer can work with you on how to achieve them or to redirect back to them when you stray away from the goal(s).

Namaste.

 

mm
Les Scholly
Les Scholly helps you navigate the turning points of life. He is a partner with Pritchard & Co. Law Firm, LLP and member of the Society of Trust and Estate Practitioners (STEP). Contact Les at 403-527-4411 or at lscholly@pritchardandco.com