Estate planning is an essential component of both life and financial planning that is often overlooked. Neglecting this critical aspect can lead to dire consequences, leaving loved ones with unnecessary burdens and financial challenges. Therefore, it is crucial to prioritize estate planning to ensure that your assets are distributed according to your wishes and your family’s future is secured.
No matter the size of your current estate, it represents a lifetime of hard work and a legacy that you’ve worked to build. However, without the proper estate planning, that legacy can be lost or diminished, and maybe even fall into the hands of unintended recipients.
Few families transition well. It has been widely studied that 70% of families will lose the wealth the first generation built by the second generation and 90% will lose it completely by the third. This outcome starts with poor communication and a lack of estate planning. Luckily, our lawyers have the training and experience to help you avoid some of the most common mistakes individuals make when planning their future.
Wills and Estate Planing
Most people think that wills are the only part of estate planning. This is far from true. When it comes to an estate plan, a will is one component. Other components may include different types of trusts, powers of attorney, implementation of probate fee reduction strategies, marriage/cohabitation agreements and so much more. Our goal is to work alongside your other trusted advisors to help you plan for your future, protect your legacy and help you avoid some of the major mistakes people make when planning their estate. Here are some common mistakes:
1. Not Using a Testamentary Trust
Testamentary trusts, being trusts that take effect on death, can be an essential part of any estate plan. Most of the time, they are just a few extra paragraphs in a will. A trust is a relationship among three parties: the settlor (will maker), the trustee (often the executor of a will) and the beneficiaries. The settlor sets out the terms of the trust (with the help of a lawyer), and the trustee is responsible for overseeing the assets and distributing them to the beneficiaries as outlined in the trust.
We often prepare wills that include testamentary trusts for minors, whereby the will maker specifies terms on which the executor will hold funds for a minor beneficiary. There are many ways in which trusts can be drafted in order to facilitate your own, unique situation.
2. Not Having a Properly Made Will
Having a properly made will is so important when it comes to estate planning. Our laws in British Columbia set out how a will needs to be signed in order for it to be valid. If it is not done properly, it can give rise to uncertainty when you die, particularly if some of the people in your world do not like what you have written. Working with a lawyer ensures your will, and any other documents you put in place, will be signed correctly.
3. Having No Will at All
While many might be dreading the process of writing a will, not having one will have worse effects in the long run. Specifically, it means the government decides where your estate goes, not you. Not having a will can result in your estate going to people you do not like, or do not even know!
By putting an estate plan in place, you get to control what happens to the wealth you have spent a lifetime building up
4. Assuming it’s One-And-Done
Many people make the mistake of assuming that estate planning is one-and-done. The reality is that your situation could change yearly, even monthly. As life changes, your estate plan should be reviewed. Life events prompting a review could be beneficiaries or executors taking up residency in another country, a change in assets or liabilities, an unexpected death, welcoming another child or grandchild and so on. It’s important to make the point of always having your estate plan up to date. We build relationships with our clients so they’re able to reach out and tell us when changes happen and we know just what to do!
5. Considering an Inter Vivos Trust
A testamentary trust is one that takes effect when the settlor dies. On the other hand, an inter vivos trust takes place while the settlor (will maker) is alive. The latter provides you with greater flexibility than other trusts when it comes to asset protection and updating an estate. In the right circumstances, an inter vivos trust is a great estate planning tool. It can help you reduce or possibly totally eliminate probate fees and minimize the risk of will variation claims.
6. Waiting Too Long to Plan Your Estate
Having all your affairs in order is always a good idea. Putting off your estate planning can have significant negative consequences for you and your family. Without a clear plan in place, your assets could be subject to probate and leave beneficiaries dealing with legal battles. Furthermore, without a proper plan for incapacity, your loved ones may be left with the burden of making difficult medical and financial decisions on your behalf. By having a proper estate plan in place, everyone can have peace of mind.
7. Neglecting Estate Planning for Disabled Beneficiaries
Estate planning for disabled beneficiaries is of utmost importance and comes with its own set of considerations. In British Columbia, disabled beneficiaries may rely on government benefits and programs to cover their medical and living expenses. Without proper estate planning, the inheritance they receive could disqualify them from receiving these benefits, which can be catastrophic for their financial and physical well-being. This is why hiring a legal firm like BKS Law, with decades of experience in drafting these kinds of testamentary trusts, is so important to your estate plan.
Estate Planning Lawyer in Surrey, BC
At BKS Law, we understand that estate planning can be a daunting task. Our team has decades of experience handling a wide variety of unique cases. We take great pride in working with you to understand your goals and desires. We work alongside your trusted advisors, such as financial advisors and accountants to craft the best estate plan that fits your needs. BKS Law can help you protect your legacy and general wealth. We have specific training as FEA (Family Enterprise) advisors, which is the gold standard designation in family business advising. As well as having knowledge of relevant tax issues. We are well-equipped to handle the needs of you and your loved ones and build the optimal estate plan for you. It is why people have been trusting us since 1974!