As part of your overall planning, you should update your Wills and Power of Attorney on a regular basis. A properly constructed will is an act of care, concern and generosity and provides direction with respect to asset distribution, and your final wishes.
If you die without a valid will (known as intestate); the courts will direct who receives your property/assets and appoint an administrator to manage and distribute your estate with no consideration of your wishes or concerns.
Probate is the process where a Will is deemed valid and it gives your Executor the authority to act. In Ontario, probate fees are charged as a percentage of the assets that flow through your Will. In Ontario if you want to reduce probate fees, you may consider preparing two wills; one for your probated assets (i.e. bank accounts and personal investments) and one for your non-probated assets (i.e. shares of your corporation). The secondary will remove the non-probated assets out of your primary residue estate and avoids probate tax (1.5%) on these assets. Assets may also be passed by joint tenancy, joint accounts for cash and investments, and by designating beneficiaries on RSPs and life insurance. Without proper planning, taxes may consume a substantial portion of your estate. At the time of death, you may owe tax on the income earned that year, capital gains tax on capital property (i.e. your investments and the value of the shares of your corporation), registered assets (RSPs/RRIFs) are taxed as income, and if you own US property, are a US citizen/resident or have a green card you may owe tax in the United States.
Trusts may be considered if you have minor children, a second spouse (while retaining the assets for the children of your first marriage), to provide income to family members at lower tax brackets, or to establish an insurance trust. While not part of your will, powers of attorney are part of a comprehensive estate plan.
A power of attorney gives another person the authority to make decisions on your behalf. There are two types of power of attorney, one for personal case and one for property. With respect to power of attorney, it is important to have one in each jurisdiction where you own assets.
If you have not updated your wills or power of attorney or have not yet written these documents, please let us know so we can refer you accordingly.