At Duensing Law, we recognize that estate planning can often seem confusing or intimidating. There are legal nuances, personal considerations and future implications involved that make the task appear even more complex than necessary. Unfortunately, this complexity can also create misconceptions that lead individuals to make decisions with incomplete or inaccurate data, or worse, avoid planning altogether. Uninformed decisions or inaction can have severe repercussions for one’s assets, loved ones and legacy. As an experienced estate planning lawyer in Toronto, we believe it is important to raise awareness about estate planning so you can make educated choices. We will address and disprove various myths related to this process and underscore its worthiness through legal consultation services.
You’re Too Young for Estate Planning
One of the more widespread myths regarding estate planning is that it only concerns elderly or wealthy individuals, which could not be further from the truth. Younger individuals might not even think about mortality or incapacity. However, unexpected situations may arise at any age and render someone incapable of managing their affairs or cause early death.
Ontario law dictates that, should you become incapable of managing your financial affairs on your own, assets may become unavailable. Court applications are required to be filed to appoint a guardian of property to access those assets. A valid Power of Attorney for Property can prevent this scenario. The court application process can be time-consuming and costly, and you may not get your first choice of person. A Power of Attorney for Personal Care allows you to appoint someone else who will make healthcare and personal decisions for you in case of incapacitation or illness. Without such documentation, decisions about you or your care could fall to legally appointed decision-makers who do not fully comprehend or respect your wishes. Alternatively, court approval would likely be needed to establish guardianship over you. An estate planning lawyer in Toronto can draft these important documents with care to protect your autonomy and ensure your affairs will be taken care of by someone trusted. Even young individuals may own digital or tangible assets and specific desires regarding care or distribution of property that require formal documentation.
You don’t have Enough Assets for Estate Planning
Another frequently believed myth is that estate planning should only be used by those with substantial assets or wealth. Unfortunately, this misunderstanding fails to comprehend its scope and purpose. Although asset protection and tax minimization are components of strategies, at its heart, estate planning is focused on legal documentation of your wishes, minimizing burdens on loved ones, and providing for dependents.
Even an estate of modest value may become subject to complications and disputes without proper planning. Without a Will in place, assets will be distributed according to Ontario’s intestacy rules as set out in the Succession Law Reform Act. Statutory wills do not always meet personal desires, for instance, you might wish to leave an heirloom or support charity through donations, or create an education trust. These intentions could easily go unfulfilled without proper planning in a Will. Estate planning encompasses decisions beyond simple asset distribution, such as designating guardians for minor children. Appointing one is often one of the most essential steps when planning for young parents, regardless of net worth. An experienced estate planning lawyer in Toronto can help you express your wishes and create a plan tailored to you, to make sure what remains is managed and distributed according to your instructions.
Assuming that Your Spouse will Automatically Inherit Everything
Many married couples living together assume that upon death, all their assets will automatically go to their surviving partner and vice versa. While this might be the desired outcome it is far from being guaranteed legally due to absence of Will. The Succession Law Reform Act governs how an estate without a Will is distributed upon death, such as when someone leaves behind spouse and/or children who live together; for deaths on or after March 1, 2021, their spouse can claim a preferential share (currently $350k for deaths before that date). If the estate’s net value exceeds this preferential share, any excess is divided between the spouse and children according to specific rules. For one child, one-half is allocated to the spouse, and one-half goes to the child. In cases with two or more children sharing, the spouse will only get a portion (one-third or less, depending on the number) while the remaining will go to the children.
Statutory distribution may not reflect your wishes. For instance, you might wish for one spouse or specific beneficiaries to inherit your entire estate. However, under Ontario’s intestacy laws, common-law spouses don’t automatically inherit as part of dependent support claims compared to legally married partners. This can have unintended financial and emotional consequences on loved ones relying solely on assumptions as an inheritance right. A carefully prepared Will with the assistance of an estate planning lawyer in Toronto ensures your assets will be distributed according to your desired plans instead of default provisions set out under intestacy legislation.
A DIY Will Kit Will be Sufficient
Due to easily accessible online resources, the temptation of DIY Will kits or templates is popular due to perceived cost savings. However, wills are complex legal documents with specific formal requirements for validity. Any mistakes during drafting, execution (signing and witnessing), interpretation (errors in interpretation can render your Will invalid), or ambiguous language can make your intentions unclear or cause costly litigation, so professional assistance must be sought if this option is pursued.
DIY kits often lack the customization required to address individual circumstances, including blended families and beneficiaries with special needs (requiring, for instance, Henson Trusts) as well as complex asset structures. Implementation of Wills is subject to specific legal requirements in Ontario. One formality involves having two independent witnesses present who aren’t beneficiaries. Failure to abide by such formalities can render your document invalid and invalidate all its provisions. An improper DIY Will can often exceed its initial investment by far. Costs associated with fixing errors often involve court applications or estate litigation to resolve errors that were overlooked during writing or execution of it yourself. Engaging a qualified estate planning lawyer in Toronto provides assurance that your Will is tailored specifically to meet the requirements of your situation, all legal obligations are fulfilled, and it protects you and your beneficiaries’ interests.
Estate Planning is a One-Time Event
Creating an estate plan is no small accomplishment, yet it should not be seen as something which, once complete, never needs revisited or revised. Life and circumstances change constantly. Marriage, birth of children/grandchildren, separation/divorce proceedings or death of beneficiaries or executors and significant shifts in your financial circumstances. Which could necessitate revisiting and amending an estate plan.
Laws surrounding estates, trusts, and taxation often evolve quickly, which can render an estate plan that was ideal five or ten years ago invalid. Marriage will typically revoke an existing Will unless it was created with that specific marriage in mind, though separation might not immediately nullify provisions for an estranged spouse in such documents. Review your estate plan periodically or whenever significant life events arise to ensure its relevance, effectiveness and alignment with your current circumstances. Consult an estate planning lawyer in Toronto regularly so your plan remains relevant, effective and aligned with your goals.
My Family Knows My Wishes, So I Don’t Need to Write Them Down
Although discussing intentions with family is ideal, relying solely on verbal declarations regarding asset distribution or estate matters is risky. Without a legally binding will, verbal expressions hold little legal weight in determining how your estate should be administered. Memories fade over time or differ, and even harmonious families can find themselves divided when faced with emotional distress caused by grief and estate settlement matters.
A Will provides clarity for beneficiaries and executors as it reduces disputes among beneficiaries while guaranteeing your estate is managed and distributed according to your wishes or by an executor chosen by you. It protects your wishes from being challenged or misinterpreted and offers clarity to your family at this difficult time.
Probate is Always a Nightmare and Should Be Avoided at All Costs
Probate (formally a Certificate of Appointment of Estate Trustee with Will) is the legal process by which the Superior Court of Justice validates a Will and authorizes its executor (Estate Trustee) to manage and distribute the deceased’s assets according to their Will. While probate involves time and expenses such as paying Estate Administration Tax fees (probate fees), it should not always be seen as a headache, nor is avoiding it desirable or possible.
Probate provides legal protection to executors and beneficiaries by validating Wills and their authority as executors. Particularly when dealing with financial institutions or real estate transfers. Although certain estate planning strategies, like joint ownership of assets with right of survivorship or trusts, can potentially help avoid probate for certain assets, they must be implemented carefully with knowledge of all implications. Tax implications as well as loss of control may exist. Avoiding probate on your own can often prove futile. Therefore, it is wise to consult an estate planning lawyer who can understand your circumstances and suggest strategies to manage them effectively. Possibly strategies for minimizing probate.
How Duensing Law Can Help with Your Estate Planning
Estate planning can be a complex undertaking that requires accurate information and professional guidance to be done successfully. At Duensing Law, we are dedicated to dispelling such myths, offering assistance with estate plan creation that ensures a strong plan. Protecting your legacy, providing for loved ones, and honouring your wishes are responsibilities that should never be ignored or put aside due to myths. Consulting an experienced estate planning lawyer should be your initial and primary step to creating peace of mind and ensuring a protected path forward for your beneficiaries.
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