Category: Estate Planning

Everyone should have a will. If you don’t have one:

1. The distribution of your estate will be determined by the Wills, Estates and Succession Act. If you are married with children and the value of your estate exceeds $300,000, the excess value will be split among your spouse and your descendants. While a “spousal rollover” would apply to the portion to go to your spouse, you would be deemed to dispose of the balance at death, and that amount would be taxed.
2. If you have minor children, their share of your estate is paid to the Public Guardian until they turn 19. Requests can be made for funds prior to the child turning 19 but the payment is at the discretion of the Public Guardian. The Public Guardian will deduct the cost of administering these trust funds from your children’s inheritance.
3. Guardianship of your minor children will be determined by government authorities if your spouse did not have legal custody of the children at the time of your death or has died before you.
4. If you do not specify when your children will receive their part of your estate, they will become entitled upon reaching the age of majority.
5. If funds are inherited by a disabled beneficiary, the provincial government may discontinue payment of any social assistance. If the funds are instead distributed to a testamentary trust, the beneficiary should be entitled to keep receiving social assistance.
6. Your children could be disinherited. This can especially be a concern for blended families.
7. The administrator of your estate may not be the person who you would want to do the job.
8. Your assets may not be given to your family members until one year following your death.
9. No assets can be diverted to charities or friends.
10. All assets may be converted to cash (i.e. family heirlooms may be sold and the proceeds distributed rather than passing on to your family).
11. The administrator of your estate may be required to post a bond to protect the assets of your estate which is an added cost to the estate.

We would be pleased to help you develop your estate plan. Our rates are very competitive. Contact us for an estate planning questionnaire to get the process started.

 

Succession planning involves exploring a business owner’s options for selling his or her business and putting a plan together to maximize its value upon sale and ensure the continued viability of the business into the future. It involves tax and estate planning, updating the company’s important legal arrangements, and conversations with family members and key employees as well as professional advisors.

Failure to plan could mean that you miss out on significant tax savings. If your company holds a lot of non-active assets like cash or investments in the two years leading up to a share sale, you could be disqualified from the lifetime capital gains tax exemption when you sell the company. There are a number of ways to plan to ensure that you continue to qualify for the exemption.

Planning is particularly important for a family business. For example you might have a couple of children involved in the business, but one might be better suited to running the business than the other. Planning might help you find suitable roles for each child while preventing sibling rivalry, or a way to compensate a child who may not be involved in the business. A plan can also help to ensure that your retirement savings are withdrawn gradually from the business without causing a cash crunch, while also being sheltered from a downturn in the company’s fortunes after your retirement.

If you are thinking about selling the business to key employees, planning can help to ensure that those employees have enough incentive to stick around long enough to buy it from you. You might offer these employees a small equity stake or a gradual buy-in over the short term for example. You might also want to explore ways to sell the company to your employees by way of vendor financing, to help facilitate a deal in cases where more conventional financing might be difficult for your employees to obtain.

If you miss these opportunities, you might eventually be forced to sell the company at a discount or to an inappropriate buyer.