Development professionals working in planned giving often come in contact with individuals who are contemplating will and estate planning.  Why not share the following tips with your donors?

 

To read more click here for estate planning tips to minimize family upheaval

 

How to Minimize Family Upheaval and Avoid Your Will Being Contested:

 

1. Get expert legal advice to protect your interests.  In addition to ensuring your will is valid, the legal counsel could insert explanation clauses that articulate the reasons behind the wording of the will.
    
2. Anticipate who might contest your will.  Who might challenge the content? Those who feel they should have been included, those who didn’t get as much as they thought they should, or those who have restrictions around their receipt of the bequest.
    

3. Pre-plan your own funeral.  Pre-planning alleviates the burden placed on your family and friends and allows you to make a meaningful decision.  It also protects you against inflation.  In addition, it can save you money because those making arrangements at the time of your death may feel obliged to spend more money.
    

4. Make a decision on organ donation:  Make your wishes known to your family.  They could face added stress if they have to deal with this request at the time of death.
    
5. Minimize the amount in your estate. 

   o   Deplete the value of the estate covered by the will by dedicating beneficiaries for RRSPs, RRIFs and life insurance

   o   Have joint ownership of the bank accounts and/or property

   o   Set up living trusts or testamentary trusts

   o   Consider gifting to others while you are still alive

Reasons for Gifting While You Are Alive

• A family member needs financial help now
• It gives you the pleasure to see them enjoying it while you are still alive
• It prevents family from fighting over it

 

Some ways to do this include:

• Contribute to RESPs for children and/or grandchildren
• Change to co-ownership with family members

 

Vacation Properties:  One of the most contentious issues is often what will happen to the family cottage or vacation property.  There are a number of options including:

 

1. Transfer ownership to a child.  The cottage can stay in the family much longer before the capital gains tax is triggered at the time of someone’s death.

However:

You need to decide which child or children to transfer the property to

What if the child’s marriage dissolves in the future?  Will family law legislation exempt the vacation home from a marriage settlement?

Should you keep ownership as a safeguard against inflation?  For example, you could sell the property later, invest the proceeds and live on the income.

 

2.  Transfer ownership to a trust.  This keeps the ownership one step removed from your child.   Terms could include your right to occupy the cottage for the rest of your life and that you are the income beneficiaries.  The Capital beneficiaries will be the children.  After the parents’ death the trust is dissolved and ownership will be transferred to the children in equal shares.  No capital gains will arise on the parent’s death.

 

Things to keep in mind:

• If thinking of selling or changing ownership, talk it over with your family before you act.
• If planning to leave the property to one or more kids, discuss plans with all the children now to resolve hard feelings
• Also, if planning to leave the property under joint ownership, think it over carefully.

 

 

Legal disclaimer:  The Planned Giving Pulse provides this information for your interest and information but takes no legal responsibility for its accuracy.  We advise you to consult your legal and financial advisors for advice on your particular situation.