Hazards to Avoid in Estate Planning

Is estate planning on the radar these days for yourself or your family?  Hearing news of other families' losses and challenges, do you want to avoid such hazards in your own estate planning?   ... It's not just the money; not just the treasures and trinkets saved over 60 or 90 years.  It's the personal VALUES and CARE we can ensure for the next generation and for all whom we love.

So don't leave this to chance:  without a clear WILL to reflect your wishes a family will be left dealing with courts, complexities, and contentions.   And without a clear way to "fund" your intended gifts -- as we'll see below --  the estate can severely damage your family.

LOVE is willing to give the time to write down our wishes, arrange savings or insurances to fund our wishes, and professionally finalize the plan to protect the dear ones we leave behind.

Pic _ Estate PlanningImmediate hazards to avoid in estate planning

Whenever I speak on estate planning people raise various kinds of concerns.  Often it's about how to preserve the family cottage.

Another question is about costs and the length of time it takes to settle an estate!   Even more vital is the question, “Will the kids will get along?”

Complexity will increase with higher value of wealth, owning business interests, relationships among step-parents/children, and health or behavioural issues among heirs.

Less Cost and Less Complexity

I've given many public seminars on estate planning, and often ask people, would they like their planning to cost more money or less money?   They always answer, "less money."

I also ask if they’d like their estate to be more complicated or less complicated.  You know it already, they say “less complicated.”

A third question is, would they like their executor(s) to have a difficult job or an easier job?  Obviously they answer, "an easier job.”

Would you agree?  What would your answers be?

Pic _ Help Is HereWorries of an Executor

Recently a woman voiced her concerns at being executor for her father.  One of her sisters caused a lot of worry after mom’s death, and she expects the same or worse when dad passes away.

I shared a way to have much of dad’s estate pass to heirs directly within a week or two. When such an idea is available and suitable it can absolutely reduce family stress, an executor’s burden, and some of the tax and fees that can apply to an estate.

Avoiding unwanted conflict

Would we want to avoid conflicts that can damage family relationships or mire an estate in courts and legal fees?   Such stories arise all to often in local and world news.  Conflict and contention comes in all shapes and sizes.   Hearing what happens to others can fuel our motivation to learn how our own planning can be successful and happy for ourselves and our loved ones.

Big trouble occurred when a father left his retirement savings to the children, and the house to his wife (their step-mother).  He thought all was fair, that he was taking care of everybody.  Little did he know the catastrophe he was leaving.

In this case (in Canada) the children inherited the retirement plans and the house rolled over to the wife.  But where's the TAX come from on dad's retirement savings?  His estate!  But he hadn't left any funding in his estate to pay the tax bill.  So do you know what happened next?

Ultimately it was his wife (the kids' step-mother) who was forced to pay taxes for money she had never received and with which her step-children paid down mortgages and went on trips. This tax bill forced her to sell her home and move out to a rental.

A few hours in professional estate planning would have made all the difference.  Retirement savings could have rolled to the wife tax-free!  Value to the children could have been easily funded by estate life insurance (...or other timely arrangements from equity of the home in due course).  Wouldn't that be worthwhile to avoid such conflict and grief?

Pic __ GrandchildrenOther common problems

Other common hazards . . .   Have you named an executor and failed to discuss it with them? Did you mention it long ago but now the executor’s health or circumstances have changed and you failed to name a secondary executor?

Did you miss telling your family where to find the Will?  What other instructions and lists would be most valuable to them in event of your illness or death?

Did you fail to mention gifts you want to make directly, outside of your Will?  Are there some unpleasant time-bombs buried in joint-ownership of some assets?

Have you neglected potential conflicts and misunderstandings among family members – “she always told me the 1921 crystal vase would be mine!”   Or as to burial versus cremation, and the care and location of your body or ashes?

Could we safely assume our families will somehow remember our wishes?  Or will they simply “figure it out” when life is ebbing away or death has arrived?   Is that the time you want a family to be discussing and debating such issues?  No of course not:  our clear guidance today is a true balm ...a lasting help to everyone!

Professional care for your estate

Professional advisors (legal, accounting, financial, insurance) are a valuable “stewardship team”  to address and secure all areas of tax, trusts, final wishes and gifts.  Clarity we can assure in this planning is among the most powerful and loving gifts we offer our families in life and beyond.

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Brian Weatherdon, MA CFP CLU CPCA MDRT
905-637-3500 x.223

3 comments

  1. Excellent weblog!

  2. Very good article! We will be linking to this on our website.
    Keep up the good writing.

  3. This is an incredibly good post… but what can I say… I put things off a while

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