Category: Estate Planning
This week on Hull on Estate and Succession Planning, Ian and Suzana start a discussion on their global philosophy toward the estate planning process. There are direct and indirect approaches to capacity and estate planning and in this episode, Ian and Suzana explore these approaches as they pertain to the choice of attorney.
If you have any comments, send us an email at firstname.lastname@example.org or leave a comment on our blog.
This week on Hull on Estates, Ian and Suzana bring us up to date on what has been happening at Hull and Hull over the summer. Jordan Atin appeared on Canada AM to talk about how to avoid The Family War. They have also added two books to their recommended reading list:
Duct Tape Marketing by John Jantsch
Endless Referrals by Bob Burg
Ian and Suzana then discuss issues to consider in estate planning for the newly separated spouse. They talk about the two different types of claims that can be made: Equalization and Claim for support.
A new Hull and Hull breakfast series will take place on Wednesday, October 8, 2008 and participants are encouraged to attend either via webcast or in person. You can also contact Hull and Hull by leaving a message or question with any of the following:
Send us an email at email@example.com, call us on the comment line at 206-350-6636, or leave us a comment on the Hull on Estates blog.
I recall a good deal of discussion when Leona Helmsley left millions to be held in trust in her Will last year, some of it on the Hull & Hull blogs and podcasts.
Well, the website for Estate Planning for Pets provides some interesting reading in this vein, although the kind of trust established by Ms. Helmsley is obviously rare. My own eye was drawn to the “for skeptics” section, which admonished professionals to put their clients’ wishes first, not their own priorities.
The point seems to be that rather than focus on one’s own, subjective opinion that money to pets could be used for other purposes, it is more appropriate to consider what happens to the pet if the testator makes no provision. Absent provision, the pet could end up abused, ignored or euthanized. Anyone who has lost a beloved pet can probably understand why testators want to soften the blow to a pet who loses them.
Thanks for reading.
Estate planning and litigation professionals are still mulling over how the legalization of same-sex marriage will affect their practices. Even more complex developments may be in the offing.
An allegedly polygamist community in British Columbia and increased concerns about the possibility of polygamy elsewhere in all but name in other regions of the country raise any number of issues, not only of policy, but also estate planning.
For example, if someone dies leaving multiple spouses but only one legally-married spouse, what advantages would the legally-married spouse have over the others in the division of a contested estate?
How will the fact that bigamy and polygamy remain illegal play out in civil estate disputes?
If proscriptions on polygamy are or become ignored by governments, will the law evolve? And as it did in the case of same-sex marriage, what happens if bigamy or polygamy becomes legal, since families may become large enough that dependant’s support claims could exhaust most estates rendering much estate planning redundant?
Stay tuned and thanks for reading.
Dame Anita Roddick, the founder of the Body Shop, gave away her entire wealth, approximately 102 million dollars, to various charities while alive. She only left enough money in her estate to pay the inheritance tax on those charitable gifts. Once the inheritance tax is paid, the value of her estate will be nil.
Roddick had been very vocal about her intentions to give her wealth to charities and called the idea of bequeathing her estate to her two daughters obscene. Prior to their mother’s death, her two daughters were interviewed and reportedly relieved to not be inheriting their mother’s wealth and supportive of their mother’s charitable giving.
Needless to say, Roddick’s decision to leave nothing to her two daughters sparked some discussion. David Smith’s previous blog on wealthy parents and transfer of wealth discusses some of the concerns such individuals have about estate planning.
Thanks for reading,
By my count, in the relatively short history of our website, our firm’s lawyers have blogged on the transfer of wealth by the boomers to their children on six separate occasions. See, for example, this blog and this blog. And our blogs reflect a trend to report on the subject as the dominant sociological issue in the business media. See, for example, this piece by Jonathan Chevreau of the National Post.
Numerous surveys have been released as to the intentions of boomers with respect to their estate plans. The fundamental characteristic is a focus (on those in their fifties) on enjoying quality time with their families and ensuring that their estate plan properly provides for their children both before and after they are gone. Some have suggested that this "family focus" is a departure from previous generations although I think this is open to question. Nonetheless, the statistics are illuminating, particularly respecting inter-vivos gifts to children.
Take, for instance, the findings of a Royal Bank of Canada Poll released in November, 2007:
1. Fifty-seven per cent of Canadians in their fifties have received or are expecting to receive money from their parents and in-laws;
2. Approximately three in five respondents in their fifties expect to give money, during their lifetime, to their own adult children; of those, sixty-nine per cent say they will do so because they want to see their children enjoy their lives; seven per cent say that they would not, believing that their children need to earn their own way or wait until their parent dies.
5. When contemplating their legacy, seven in ten respondents want to be remembered as a person who enjoyed time with their family. This family focus is also reflected in the finding that four in five of those in their fifties believe that "their children are their legacy."
David M. Smith
Checklists are wonderful things when it comes to the practice of law (list makers would argue that that is true in life as well). In today’s busy practice, a checklist can ease the troubled legal mind.
I was looking at several estate planning information checklists earlier this week. It is worthwhile to highlight some issues/items that can be easily overlooked but which a thorough solicitor should ensure is on his/her checklist:
· If you are acting for both spouses/partners, advise the clients that you cannot act for one at a later date without the other’s knowledge;
· Is the estate trustee to manage funds for minors and distribute monies to the guardian for care, maintenance and education of minor children. Who is the guardian;
· If they can be transferred, who gets air mile/loyalty points. What about transferable equity in hunting/fishing lodges or sports clubs;
· Joint Assets and the presumption of a resulting trust – is there a clear intention of ownership;
· For foreign property, consider the necessity of executing a separate will or appointment of a local estate trustee;
· Ensure every life interest is coupled with a remainder interest; and
· Ensure any charitable organization named as beneficiary is still in existence and properly described.
Have a great weekend and for all those skiers out there, let it snow, let it snow, let it snow.
The oft-repeated phrase "unprecedented transfer of wealth" has been invoked by estate planners and financial advisors alike to describe the pending inheritance by the children of baby-boomers. But what if they don’t inherit that wealth? Several months back, Warren Buffett raised more than a few eyebrows when he very publicly announced a commitment to benefit the Bill & Melinda Gates Foundation, rather than his children, with the bulk of his estate. And he is not alone.
Enter "The Trust Fund Whisperer" as Dr. Lee Hausner was described in a recent article in The Globe and Mail (October 16, 2007), Dr Hausner is a psychologist who, as Siri Agrell so succinctly put it in her article, "is paid to tell families how to avoid screwing up their children with their cash." A lot of cash, that is, if the title of her book Children of Paradise: Successful Parenting for Prosperous Families is anything to go by. Essentially, Hausner challenges what she sees as a culture of entitlement enjoyed by the wealthy elite by arguing in favour of fostering a strong work ethic. Agrell’s article provides a well organized summary of Hauser’s approach together with some of her key recommendations such as: (i) paying for expenses rather than transferring substantial wealth to a child during their career building years and (ii) when transferring cash, spreading the payments in three installments over a prolonged period rather than in one lump sum.
Certainly, trust and estate practitioners play a key role in implementing such recommendations. The increasing popularity of such estate planning techniques as incentive trusts (detailed in a transcribed podcast and an audio podcast on our website) can be seen as a response to the thesis espoused by Hauser and others.
Thanks for reading,
Welcome to my week of blogs! As you may have gathered, lawyers at Hull & Hull alternate weeks when it comes to blogging. The hope is to provide you with a cornucopia of perspectives on various issues of interest to the estate bar and the profession generally. We try to mix light-hearted topics with serious ones.
Turning to today’s blog, I read with interest that Pavarotti’s Will was recently opened. The great tenor ultimately succumbed to pancreatic cancer. Pavarotti was colourful both on and off the stage. He was married twice and sired 4 children. It now turns out that Pavarotti’s estate is as rich as his voice.
Pavarotti left the bulk of his estate to his second wife and four children pursuant to a recent June 13th Will (his youngest and only child from his second marriage is four years old). In a second Will dated July 29th Pavarotti apparently created a trust in favour of his second wife of approximately €15 million. This was a surprise to his friends and family. The second Will dealt with Pavarotti’s three New York apartments as well as personal items, including paintings by Matisse. The family has denied rumours in the Italian press that Pavarotti’s first and second families were at odds. Like so many, Pavarotti waited until the end of his life to deal with his Estate. No doubt, the opera star was reluctant to confront his own death (though death looms large in many operas).
The reading of a Will by family members is often fertile ground for surprise and disappointment. Many testators use a Will to settle old scores, reward or punish behaviour, or favour those who nursed the testator through illness or old age.
I struggle with whether to advise a client to reveal the contents of his/her Will to family members before death. Overcoming the trepidation to execute a Will is one thing, but to then reveal its contents to family members, who may benefit unequally, is an entirely different matter. For example, a disappointed son or daughter may punish their parents by no longer seeing them or cutting off access to grandchildren. However, if the Will comes as a surprise after the testator’s death and is a disappointment, the potential for litigation is rife. A disappointed beneficiary will justify litigation by claiming that they are only doing “what mom really wanted”. Emotions come into play, judgment becomes clouded, and lawyers are retained.
In the end, there is no easy answer as to whether to advise your client to reveal the contents of his/her Will.
Listen to "The Family Cottage and Capital Gains Taxes"
Read the transcribed version of "The Family Cottage and Capital Gains Taxes"
This week on Hull on Estate and Succession Planning, Ian and Suzana discuss different options for dealing with capital gains tax as it pertains to investments like ‘The family cottage’.