Posts in category: Inheritance

When you create your will, one of the most important things you need to do is choose your executor. This is an important role that comes with the responsibility of taking care of the probate process, estate inventory, payments and notifications, final tax returns, and distributing your assets. You need to choose someone who is reliable, organized, and honest enough to carry out your estate exactly as you planned. To help you make a well-informed decision, here are some of the factors to consider when trying to decide who should be the executor of your will.

Family Dynamics

The majority of people prefer to choose a family member as their executor. While this can be a more comforting choice, it’s not always the right one. If your family is already experiencing conflict, then choosing one over the other as an executor will only lead to more problems. If this is the case, you may want to select a reliable friend or a third party to carry out your will.

Health and Resilience

Your ideal executor should be of good health and younger than you. They’ll also have the patience to carry out the lengthy process and deal with government agencies and the banks. Being the executor of a will is a truly stressful responsibility to — they need to be ready for that.

Proximity

It’s essential that the person who you choose lives in the same area as you. It’s not only easier to deal with the process when you’re close by, but it could also speed up the process. There may be regulations in place that will prevent you from choosing someone outside of province or state. It’s important to check with your local jurisdiction to find out what is required if you decide to go this route.

Experience

Although a degree in finance and accounting is not required to be an executor, it’s always wise to choose someone who has experience working with finances in some capacity or is willing to do the research. There will be a number of documents and tax forms that will need to be filled out, followed up on, and managed into the future, so it’s important to choose someone who is comfortable with bookkeeping and dealing with all the relevant agencies.

Deciding who to assign as the executor of your will is an important decision and one that should be given careful thought. At The Beacon Group of Assante Financial Management Ltd., we are dedicated to managing and securing the finances and assets entrusted by our clients. Contact us today to learn how we can protect your legacy.

Every family has their own complications and sometimes a death can exacerbate existing problems. When a parent dies and they are survived by their adult children who don’t have the most harmonious relationships or dynamics, this could affect their inheritance. Disputes between heirs in an estate distribution is a very common occurrence, and unfortunately can tie up a lot of time and estate funds if the disputes lead to estate litigation. If you think there is the potential for conflict with your future estate, it may be beneficial to set up some preventative measures while you have the capacity to do so. Here are some options to consider.

Jointly Held Assets

A good example of this is joint bank accounts. Often, aging parents will have trustworthy and geographically accessible children be joint on their accounts to assist with paying bills or as part of a tax planning strategy. The problem arises upon death and the bank account technically passes automatically to the surviving owner. This could be problematic because technically the bank account would not form part of the estate and not be divisible to the other beneficiaries. In order to avoid this conflict, it should be stated very clearly in the will what is to happen with jointly held accounts.

Family Cottage

Many families have cottages or vacation homes that form part of the estate when the head of the family dies. Problems arise when the heirs to the cottage differ in their desires of what to do with the cottage. This can be upsetting if one heir wishes to keep the cottage while others don’t want to take responsibility for it and wish to sell it. This is an issue that can be dealt with in the will, or even better with an honest discussion prior to death. If it’s clear that one beneficiary wishes to keep the cottage while others wish to sell it, perhaps leave the cottage solely to the heir who wants it and give an equal bequest to the others. If this is not financially possible, then it will be up to the heirs to figure it out amongst themselves.

In Terrorem Clause

Sometimes heirs will challenge a will if they think that they are not left their fair entitlement. Children can be written out of a will or given less of an inheritance at the discretion of the person writing the will. To minimize the chance of having a beneficiary contest the validity of the will, and possibly tie the estate up in litigation, put in an “in terrorem clause,” or an anti-litigation clause in addition to some sort of bequest. This type of clause threatens to take away any bequest in the will should the identified recipient start any litigation challenging the will. This may cause some waves in the distribution of the estate, but if the heir wishes to receive their guaranteed bequest they will be deterred from challenging the will.

There is no way to guarantee that there won’t be conflict between heirs while distributing an estate, but by planning ahead and addressing certain problems surrounding distribution you can help ease the process for your heirs when the time comes. Your financial advisor can help guide the estate planning process to ensure your wishes are met after you pass.