Tag: Succession Planning
A recent article in the Ontario Lawyers Gazette discusses succession planning for lawyers with respect to their practice. Lawyers often fail to plan for their retirement or death and often do not set up a formal succession plan for their practice to the determent of their families, clients, and colleagues.
The article states that 41% of practicing lawyers are over 50 years old and 34 % of all lawyers in Ontario are sole practitioners with an additional 29% working in firms of two to ten lawyers. However, often lawyers do not prepare well enough in advance for the winding down of their practice or what will happen to their practice in the event of their death or disability.
The article makes a number of helpful suggestions including:
- Advising sole practitioners to assign another licensed lawyer or paralegal with alternative signing authority for their trust account in the case of an emergency;
- Suggesting that practitioners name a licensed lawyer or paralegal as a limited trustee in their Will for the sole purpose of winding up a practice;
- Advising lawyers that a non-lawyer trustee or attorney pursuant to a Power of Attorney may not be able to deal with some of the issues with respect to winding down a practice;
- Advocating that lawyers communicate with their families, partners, and employees their succession plan; and
- Advising lawyers to plan well in advance (i.e. five years) to maximize their financial compensation.
The Law Society offers A Succession Planning Toolkit and a Guide to Closing Your Practice to assist lawyers. On May 20, 2009, the Law Society will be offering a teleseminar Succession Planning for your Practice discussing these topics and more.
Thanks for Reading,
This week on Hull on Estate and Succession Planning, Ian talks about a seminar he attended and participated in last week called ‘Insights on Aging and the Elderly’. The seminar was hosted by B’nai Brith and featured Dr. Nathan Herrmann, Ian Hull, Rabbi Roy D. Tanenbaum and Charles B. Wagner.
The Dog Days of Summer: Planning for the Transfer of the Family Cottage – Hull on Estates Podcast #67
Justin and Megan discuss estate planning issues surrounding the family cottage. They cover specific practice tips of transferring the family cottage and the consequences of poor planning.
Listen to "Powers of Attorney and Elder Abuse"
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During Hull on Estate and Succession Planning Podcast #64, Ian Hull and Suzana Popovic-Montag express the importance of educating an individual chosen as Power of Attorney on their roles and responsibilities, as well as full disclosure between all parties involved in the estate planning.
They also discuss the issue of duelling Powers of Attorney during the succession planning process and the strategy of using Power of Attorney for limited purposes.
Ian and Suzana also touch on the problem of elder abuse and mentioned the helpful emergency hotline provided by the Public Guardian and Trustee at 1-800-366-0335.
Using Insurance Instruments for Effective Succession Planning – Hull on Estate and Succession Planning Podcast #61
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During Hull on Estate and Succession Planning Episode #60, Ian and Suzana discuss how term policies and whole life policies can apply to succession planning.
They cover three important aspects to consider when reviewing your insurance policies, especially in a separated spouse situation including the funding of support obligations, the designation of the policy’s beneficiaries, and how the policy will be funded after death.
Listen to "Mutual Wills"
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During Hull on Estates Episode #61, Sean Graham and Paul Trudelle discuss mutual wills and mirror wills. They discuss examples where a mutual will and a binding agreement would be used, such as second marriages.
They also cover the importance of documentation of intent and discuss potential drawbacks of the mutual will.
For more information on this topic, see the article by Debra L. Stephens, "Mutual Wills: A Primer", which was presented at The Six Minute Estates Lawyer 2007, on April 10, 2007.
Separation Agreements in the Context of Estate Planning – Hull on Estate and Succession Planning Podcast #59
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During Hull on Estate and Succession Planning Podcast #59, Ian and Suzana discuss Separation Agreements and the general elements of estate planning upon separation from a spouse.
They cover many important aspects of a separation agreement that should be considered when turning your mind to estate planning, including joint assets, joint debts, property, and disability planning.
It’s always good to end the week on a high note and once again the baby boom generation is in the news. A recent report by Decima Research says almost $1 trillion in cash and other assets will be transferred to the children of baby boomers in the years to come. The baby boomers are without a doubt the richest generation that Canada has produced to date. Even in death, the baby boomers will continue to shape our society.
In the past, the typical inheritance was likely considerably less than $100,000. However, when asked, more than 50% of the children of baby boomers expect to receive $283,000 on average. This figure represents a significant increase from the past and is indicative of the wealth that baby boomers have accumulated over the years. Half the $283,000 will be received in cash and the rest in real estate and valuables.
However, to me it is also clear that baby boomers will live longer than past generations and likely spend at a greater rate than their parents ever did as they fight the ravages of old age. Ultimately, there may not be as much to pass along as their children would like to think. The baby boomers also have an altruistic streak and may leave some of their wealth to their favourite charity.
Regardless of who gets the money, the need for proper estate planning is clear. Now is the time for boomers to get their personal affairs in order if they haven’t already. Baby boomers should let their children know now what their wishes are in order to avoid family fights in the future when their estates are being distributed. If parents are afraid that their children will react angrily if treated differently, they should nevertheless let them know and the reason why. The emotional and financial costs to the next generation is far greater than the immediate upset if a parent tells a child that he or she is being treated differently under the terms of their Will or that a charity is slated to receive the bulk of their estate. Perhaps a family conference with an outside facilitator is the way to go. Unfortunately, no matter what the baby boomers do, estate litigation is likely to increase as their children fight over their inheritance or try and prove what the “true wishes” of their parents were.
Finally, the generation which benefits from this trillion dollar transfer will have to carefully decide what to do with the windfall. Many will pay off their mortgages or other debts affording them the opportunity to accumulate their own personal fortune and pass it on to the next generation. Estate planning will always be with us… the sooner it’s done the better.
Thanks for reading and enjoy the weekend.
Justin de Vries
Hull on Estate and Succession Planning Podcast #53 – Beneficiary Designation Considerations for Spousal Trusts
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During Hull on Estate and Succession Planning Episode #53, Ian Hull and Suzana Popovic-Montag build on their last podcast regarding succession planning for married couples, and turn their focus to spousal trusts.
They discuss administrative expenses surrounding trusts, the circumstances that lead to surviving spouse litigation, and methods for ensuring the balance between beneficiary designations.
Hull on Estate and Succession Planning Podcast# 52 – The Necessity of a Will in Successful Succession Planning
Listen to "The Necessity of a Will in Successful Succession Planning"
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During Hull on Estate and Succession Planning Episode #52, Ian Hull and Suzana Popovic-Montag discuss the importance of having a Will in succession planning.
They cover a range of necessary Will provisions including:
- The appointment of a guardian for your children;
- How to deal with authority over your children’s property and the Office of the Children’s Lawyer ;
- Avoiding the Corvette effect;
- Common disaster clauses; and
- US Estate taxes.