Have You Had Enough?

When it comes to money, you know there are Haves and Have-nots. Here’s something that may surprise you: when it comes to estate planning, it does not matter how much stuff you have. I have learned you can fall into a different category.

When it comes to helping your loved ones, which category do you fall into?

Are you a ‘Have’?

Many people think, “I have no money or wealth to worry about. Estate planning is not for me.”

These ‘haves’ tell me they’ve had enough – enough information about their rights and obligations. They have an aversion to talking about death. They tell me, “It’s so negative and depressing, Ed. Let’s talk about something else”.

Well, I say, “Estate planning is what you do for the people you leave behind. You really do it for them. You want whatever you have to go to your loved ones. You don’t want it to be wasted on lawyers’ fees. Do you really want to pay more taxes than you need to?”

They respond like this:

  • I ‘have’ nothing to fight over when I go.
  • Who cares about all this when I am gone? The laws dealing with property, trusts, estates, wills, income taxes and family law will not ‘have’ anything to do with me.
  • My family is not dysfunctional. I ‘have’ no problems in my family. Everyone does what is expected of them.
  • Please prepare a simple will for me. ‘Have’ it ready for me to sign tomorrow. I’m leaving the country on holiday right after I sign it. Otherwise, I’ll find a sample will online. It’s all the same to me.
  • I ‘have’ to sign a will and powers of attorney right now, I cannot wait. I don’t understand why I cannot get what I want. What is the matter with lawyers, anyway? You want to know too much about me when I ‘have’ nothing.

Are you a ‘Have-not’?

Seems Have-nots always need more information. They have not made a decision about a guardian for their minor children. Sure, their children are not teenagers yet. They think they have plenty of time left.

The Have-nots see no reason to rush their decisions.  They are perfectionists. They wish to have all the information necessary (without going to law school). They do not trust anyone to make their financial decisions for them. They ‘have not’ developed any trusting relationship with a lawyer or financial advisor. They will go back to your website over and over again looking for more free information. They ‘have not’ yet finished researching. They keep skimming websites that may not be applicable or appropriate for them.

They search online for answers to questions like:

  • My son lives in Hong Kong. What are the income tax consequences under those laws if he inherits?
  • What if my son divorces his spouse in Hong Kong? Will she be entitled to a share of his inheritance?
  • Will my son have to pay income tax on executor’s fees in Canada and Hong Kong?

Have-nots can’t make a decision until all these questions are answered. The trouble is it is stopping them from protecting their loved ones from a disaster.

So, are you a Have or a Have-not?

You don’t want to become a desperate estate planner, either. I tell you all about those in the next post.

You may also enjoy reading Estate to the Heart: How to Plan Wills and Estates for Your Loved Ones. This book is only available via my website www.MrWills.com.

About Ed

Edward Olkovich (BA, LLB, TEP, and C.S.) is an Ontario lawyer, nationally recognized author and estate expert. He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of Executor Kung Fu: Master Any Estates in Three Easy Steps. © 2014


You Need to Answer These Estate Planning Questions

Why do you invest your money? My guess is so you don’t have to stay up at night worrying about it. Money makes a difference in your life. You need it to protect yourself and your loved ones.

But who will protect your family and your money when you are gone?

Everyone can remember when an uncle or aunt died without a will.  You saw what happened to your relatives.  It was a costly learning experience that may still have painful memories.

Your money and your family may also be at risk. All it takes is a bad estate plan.

Sure, you may think a bad estate plan is better than no plan. A bad estate plan is good for the tax department and court lawyers. It is never good for your family. It is a bad investment that too many people make. Only your family really suffers and regrets your failure to make a proper estate plan.

You work hard for your money. So invest in professional estate advice to create a proper estate plan.  If you think you don’t need help, see if you can answer these 12 estate planning questions.

Estate Planning Quiz

Answer either Yes or No to each question. Count the “Yes” answers.

Are you sure you don’t need professional advice to get the right answers?

12 Estate Planning Questions You Need to Answer

  1. Do you know who should be the beneficiary of your RRSP, RRIF, annuities, life insurance policies, and tax-free savings accounts?
  2. Is putting assets into joint ownership with your relatives a good idea?
  3. Should you make bank accounts or your family home jointly-owned?
  4. Do you have a simple probate tax saving plan you can follow?
  5. Are you sure you have the best succession plan for your business?
  6. Is your will up to date with the right executors and backups?
  7. Have you set up a trust in your will for minor children?
  8. Did you set up a trust for beneficiaries with special needs?
  9. Have you provided for ex-spouses and your common law spouses?
  10. Is your cohabitation or prenuptial agreement still valid?
  11. Have you got the right kind of life insurance?
  12. Is your will up to date and can you find the original?

If this were a game, 7/10 correct answers may be a good score. In real life, however, one mistake can be a tragedy for your family.

It’s never too early to write your will. Get a professionally prepared will and help avoid real tragedies for your loved ones.

Keep Your Promises

Didn’t you promise this was the year you would get around to:

  • making a will;
  • getting powers of attorney; and
  • figuring out what happens to your business when you are gone?

Learn more about estate planning by reading my free ebook, Estate Planning: 7 Keys to Success. Visit www.EstateTherapy.com.

About Ed

Edward Olkovich (BA, LLB, TEP, and C.S.) is an Ontario lawyer, nationally recognized author and estate expert. He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of Executor Kung Fu: Master Any Estates in Three Easy Steps. Visit www.ExecutorSchool.com. © 2013


More Real Reasons Not to Do Any Estate Planning – Part 2

Think you have good reasons for not making an estate plan?

You may have reasons that raise legitimate questions. But sometimes a reason is an excuse to avoid making decisions.

Let me help you overcome your excuses. I’ll give you answers to help you protect your family and act.

Excuse 4: Making a will is scary… I’m afraid of making a mistake.

“Online will forms are confusing.”

“I want to use a will kit but I don’t know what kind of will I need.”

“I am afraid to spend money on hiring a lawyer. I want to save money.”

“I can wait until I really need a will.”

Answer: Why do you have a spare tire in your trunk? You really don’t need it until you have a flat tire. But every car has a spare tire for a reason; you need protection. You need it in case an accident happens. Invest in a lawyer-prepared will. The protection is pennies a day. I tell everyone that you can find a lawyer in every price range. Most do-it-yourself wills usually lead to complications never intended by will makers.

Excuse 5: I’m afraid to talk about money with my family.

“I’m afraid this kind of talk will only start an argument.”

Answer: You may be right. Money is a taboo subject in many families. This risk may be worse with a blended family. There, competition for attention and money can generate Oscar-worthy performances.

A lot of financial writers advocate open money discussion.

My answer to that advice is every family is different. I understand why some clients want to avoid the subject altogether. When someone in a family dies, the disruption changes lives. Families often need lawyers because they could never talk to one another.

Excuse 6: I don’t know what will happen to my business if I die.

“Who will run my business if I die?”

“Will my partners have the money to buy my share of the business?”

“Do I need a shareholders agreement with insurance to provide for my family?”

Answer: You need a contingency plan even if you don’t have a succession plan. You will want powers of attorney for property. You can designate someone to control the business bank account if you are a sole proprietor.

Are you running a small business by yourself? If you die without a will, your business account will be frozen. No one will have authority to even draw money out of the account.

You can set up a trust or a will to deal with your business. Give your trustees power to operate the business until it is sold.

Use an estate plan to reduce taxes from the sale of the business. That leaves more money for your loved ones.

Excuse 7: Everything in my life keeps changing.

“I can’t keep up with my children’s needs, money for school or their marriages.”

“I’m still paying for my divorce.”

“I don’t know if my new relationship will work out.”

Answer: Estate plans are not cut in stone for a reason. Things change. Every time your relationships, assets and beneficiaries change, you must update your plan. It may be a simple and inexpensive change. You may need to change the beneficiary of your life insurance, RSP or pension plan. You can do this without any expense.

Remember, estate planning is what you do for loved ones you leave behind.  Read the 7 Keys to Successful Estate Planning here.

Edward Olkovich (BA, LLB, TEP, and C.S.) is an Ontario lawyer, nationally recognized author and estate expert. He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of seven estate books. © 2013

How to Prepare a Proper Will Quickly: Key #3

Are you, like Simon, travelling without the protection of a will? Simon had no clue how to divide up his estate. He was going on a trip to Dallas. He wanted to make a will before he left. Here are some will tips to help you and Simon.

Simon said, “I want to leave $25,000 to Billy and $25,000 to Sally. Will I have enough money in my estate to make my promises?”

Let me share this secret with you about what Simon should do.

No one knows for sure exactly what their estate will be worth. You should think of dividing your estate in terms of percentages or, better still, shares. This is a lot easier than figuring out “how much will I have left for each person?”

Leave 5% or, even better, five shares for Billy and five shares for Sally.

When you die without a will, the government distributes your estate.

If you do not have a will, you have no say in who gets what and who is in charge of your affairs.

Want to know what you must do to make a will?

Things You Must Decide

• Who will be in charge of your estate (executor).

• Who gets what (beneficiaries).

• Who your executor and beneficiaries will be in case the ones you name are not around (backups).

 Technically, there is a fourth thing your will should do. If you have minor children, you need to name their custodians or guardians.

Lawyers Can Answer Questions

Your will is your most important estate planning tool. Don’t underestimate the legal skills required to prepare this document. It’s a job for professionals, not amateurs.

Wills protect assets from costly court cases and your loved ones from uncertainty and hardship.

Do-it-yourself will kits are not a good way to protect your family.

They may seem like a good idea at the time. But most homemade wills have flaws that people cannot see.

Even if mistakes do not make the will invalid, they usually cost the estate more in legal fees.

The Trick with Wills Is to Have One

People forget that wills are legal documents.

You may not fully understand the law when you make a will. You still must comply with all the formal legal requirements.

Families go to court to interpret, challenge and contest wills every day. Invest in a proper, lawyer-prepared will to avoid mistakes that could drive loved ones crazy with a court case.

You don’t have to be afraid of making a will. Learn more tips and tricks in About Wills: You Need to Review These Essential Tips.

Next let’s talk about how to find the right executor to handle your estate.

See my related blog posts:

Successful Estate Planning Key #1

Estate Planning Key #2 Major Tax Traps

Who Inherits Your Money?

About Ed

Edward Olkovich (BA, LLB, TEP, C.S.) is a nationally recognized author and estate expert. He is a Toronto estate lawyer and Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of seven books. Visit his website, mrwills.com, for more free valuable information.

© Edward Olkovich 2012