Can you Ensure your Final Wishes are Honoured?
Many Canadians have taken the precaution of making a will, and chances are most of those individuals will have their estates administered in accordance with its terms. Still, some of those individuals will pass away with their estates becoming mired in litigation despite the terms of their testamentary documents. Legal disputes over wills often arise out of unequal gifting, allegations of inadequate support for dependants, and/or a testator being viewed as mentally compromised and/or unduly influenced to make a will. In many of these cases, a common theme is a lack of communication between the testator and the beneficiaries. Some ways one can avoid their estate becoming the subject of the family fight include:
- Know one’s assets and liabilities – prepare a comprehensive inventory of assets (e.g. real property, personal property, investments, savings etc.) and debts (e.g. mortgages, loans etc.) so one knows all of what will be dealt with upon his/her death; giving a copy of this to your executor will help him/her get the job done;
- Decide who is to administer and how one intends to distribute – choose the person or persons suitable to administer the estate, and determine how to best gift the assets. Seek legal or financial advice to assist in gifting in the most cost-effective manner;
- Document one’s intentions – documenting intentions is critical, as such documentation (e.g. a trust, a will or multiple wills) is the foundation of one’s wealth transfer plan;
- Be timely – avoiding delay in estate planning can mean the difference between a smooth administration and one’s estate trustee(s) contending with allegations of mental infirmity and/or undue influence; and
- Discuss estate planning – meeting with family members to explain one’s estate plan can reduce the chance of disputes; one’s legal and/or financial advisor can take part, which can keep tensions in check. If the family members sign a document acknowledging the estate plan, which we have blogged about here, this can guard against the estate being the subject of legal proceedings.
Of the foregoing precautions, communications between testator and beneficiary (as well as with those who are excluded from the gifting) is likely the most difficult task to undertake, particularly in a family fraught with internal strife. Drafting lawyers may want to keep in mind the proposal of a family conference in cases where it is evident that family discord will result from the will being made. Although a trying process for the family to participate in, it may ultimately result in an estate saved from a lawsuit and in family harmony preserved.
Thanks for reading,