This blog was written in collaboration with David Morgan Smith at Hull and Hull LLP.
Despite many people claiming to be aware of the importance of proper estate planning, nearly half of Canadian adults report not having estate planning documents in place. Ontario adults who die without the appropriate wills and other important documents lined up will have their assets and liabilities disseminated according to provincial law. This lack of planning is known to cause tension within families, so it is a good idea for people to consider the implications of procrastinating on or neglecting this important task.
Passing along wealth when everything is either available in cash or held in a bank is straightforward enough. While solid estate planning and proper communication with financial institutions has always been a good idea, for a long time the documentation needed for most was limited to wills, real estate deeds and stock certificates. However, an increasing number of Ontario residents are needing to consider digital assets such as cryptocurrency and online businesses when drafting estate plans.
What happens when people leave inheritance to their children? Often, the assets are spent and wealth only makes it to the third generation in 10 percent of families. While it is a challenge, there are some steps Ontario families can take when planning their estates to encourage wealth to continue through to more generations of children and grandchildren.
Wills are an important part of the estate planning equation, and they are intended to allow for a smooth transition as one's final wishes are preserved. However, there are times when you may feel that some of the provisions in a will are not legally justified - so much so, that you may actually want to contest or challenge the will.
In Ontario and the rest of Canada, many people believe that there is no estate tax to be paid upon their death. The truth is that there is a tax with a different name applicable to the estates of Canadians. The deemed disposition tax is similar to estate tax, and it applies to gains on a person's assets which are triggered after his or her death.
If one were to ask most people in Ontario, they would probably say they hope to live to a ripe old age and pass away peacefully. When people think about wills and estate planning, many consider these important for older men and women who want to pass along their estates. Yet, not everyone is fortunate enough to enjoy an extended lifespan. Having one's estate planning in place can help protect the future of a young family in the event of a tragedy.
In a typical will and estates scenario, after a person passes away, his or her assets pass along to a spouse and/or any children. Such is an ideal situation, but that is not always how things work out, especially given the prevalence of blended families in Ontario.
Following a death, it sometimes occurs that a person who anticipated an inheritance receives nothing, whether by design, oversight or an unforeseen technicality. Whatever the reason, it may be necessary to begin a court battle to right the perceived wrong.
All residents of Ontario should make provisions for the distribution of their estates after they pass away. For some, this may mean little more than creating a simple will and granting power of attorney in case of incapacitation. For those with more complicated estates, careful estate planning is essential, especially in the digital era of the 21st century.