Wills, Trusts and Estate Planning

You’ve worked hard for everything you have—make certain you’re prepared for the future with help from our legal team. At Lynn Valley Law, we prioritize our clients’ needs and wishes. We help you write your will, establish a living trust or put your affairs in order through estate planning. Our wills, trusts and estates lawyer in North Vancouver provides advice concerning successful family wealth planning, ensuring family business continuity, estate administration and more. Our team takes the burden off of your shoulders and deals with lengthy and stressful procedures for you during delicate times. Contact our team for pragmatic and informed legal advice for a considerable amount of legal insight and support.

Protecting Your Future

Do you need an expert for drafting a will or guidance in planning business succession and estate distribution? Then benefit from our expert knowledge and practical experience, and get answers to the specific problems you are encountering. Our key areas of practice include:

Wills

We can prepare all manner of wills, from simple to complex, for larger estates and small, so that your wishes as to who should receive your assets upon death can be best realized and reliably carried out. 

But wills are only one method to pass your assets on to your chosen beneficiaries upon your death. Joint ownerships, or direct beneficiary designations, or trusts, or deeds of gift are other methods of passing on your assets. 

They also avoid the chief pitfalls of passing your assets through a will, such as 1) wills variation applications by a disgruntled spouse, or a child who has received a smaller share than his siblings; 2) provincial probate fees and taxes; and 3) the delay caused by the process of obtaining a probate order from the court. However there are risks in some cases, such as joint ownerships and informal trust agreements, and we can advise on those as well.

We can also advise on family law issues which could impact upon your estate planning, such as possible claims on your assets by spouses in the case of divorce or separation, or claims by spouses of one or more of your beneficiaries on their eventual inheritances.

Probate Avoidance

We can advise on a plan to legally avoid the need for probate of your will or estate upon death, hence eliminating the court probate application fees, and related provincial fees/taxes of 0.6% on estates worth between $25,000 - $50,000 and 1.4% on amounts above this, and streamline the distribution of your assets upon death. 

In real terms this means probate fees of $14,000 on every million dollars of value in the estate. Considering the value of residences in the Lower Mainland, an estate worth in excess of a million dollars is far from uncommon. 

Direct Beneficiary Designations

Owners of Registered Retirement Savings Plans (RRSP), Registered Retirement Income Funds (RRIF or RIF), Tax Free Savings Accounts (TFSA), and life insurance policies may name direct beneficiaries on those plans or policies, and upon your death the beneficiaries will receive the remaining funds in the plans or policies. If you name direct beneficiaries on the plans or policies, there will be no need for probate, or probate fees and taxes, to distribute those assets. There may however still be significant income tax considerations depending on how much the value of the Plan or Fund has grown since inception. 

In real terms this means probate fees of $14,000 on every million dollars of value in the estate. Considering the value of residences in the Lower Mainland, an estate worth in excess of a million dollars is far from uncommon. 

Direct beneficiary designations should be used where possible. They do not carry the dangers of other probate avoidance methods such as joint ownerships since the asset is passed directly to the beneficiary or beneficiaries. However there can be unexpected tax consequences that should be taken into account when devising an estate plan. 

TFSA and life insurance policy holders pay contributions and premiums using post-tax dollars or income. So when they are collapsed and paid out upon the death of the contributor, the funds in those accounts or plans are paid out tax free to the beneficiaries with no tax consequences to the estate or the beneficiaries. However RRSP and RRIF accounts consist of contributions made up of pre-tax dollars. When they are collapsed and paid out upon the death of the contributor, the entire account is considered income of the estate in that year and taxed at the marginal rate. On a RRIF or RRSP account of $250,000, for instance, with no other income in the estate, the taxes could be over $90,000. 

Under section 160.2 of the Income Tax Act, the estate and the beneficiary are jointly liable for taxes on proceeds of RRSPs and RRIFs distributed on death of the contributor. If there is not enough money in the estate to pay the taxes, CRA will look to the individual beneficiary for payment based on the amount he or she actually received from the account.

Hence it is imperative for the estate and individual account beneficiaries to plan and ensure that enough funds are held back at time of distribution to pay the taxes at the end of that taxation year.

Multiple Wills

The use of dual or multiple wills is legal in British Columbia, and can be used to minimize probate fees payable. One will can include assets such as real estate or funds held in financial institutions which would require a probate order to access and distribute. The remaining assets, which do not require a probate order to access and distribute, including such potentially valuable items such as company shares, pass through a second will which is not probated. Thus the pro-rated provincial probate fee/tax isn’t levied on the assets passing through the second will. This requires a different executor for each will, and both wills would be potentially subject to wills variation challenges.

Life Estates and Blended Families

A life estate interest in real estate gives the holder the right to exclusive use and enjoyment of the real estate for the rest of that person’s lifetime, or, typically, until they cease occupying the premises. Even then, and depending on the specific terms of the gift or bequest, they may have the right to rental income from the property for the rest of their lives. 

In the case of an investment fund, the life estate holder would receive all of the income generated from the fund for the rest of their lives, but no access to the capital. 

Life estates can be very useful in blended family situations, where the marriage is a second marriage for at least one of the parties who is bringing substantial assets or even a residence into the marriage, and one or both of the parties have children from their first marriages. The couple may be living in a residence owned by the husband, for instance, and he wishes to leave it to her for the rest of her life, and to his children following her death. 

Joint Ownerships

Two or more persons sharing the formal legal title to either real estate or bank and investment accounts is a common and effective method to avoid the need for probate of those assets upon death, due to the right of survivorship held by the surviving owner or owners. We can advise on the benefits, and the dangers and drawbacks, of joint ownerships.

Joint ownerships should in most cases be accompanied by a bare trust or secret trust agreement between or among the owners.

Trusts

Trusts are an extremely flexible and powerful tool for holding or managing assets while you are still alive or after death. It basically involves the owner (the “settlor”) transferring the legal title of an asset to a “trustee” who holds or manages the asset for the benefit of another person or people or organization (the trust “beneficiary”). 

Testamentary trusts can be set up inside a will for an executor or trustee to manage on a continuing basis bequests or gifts to minor children or young adults, or persons with disabilities. 

CRA registered trusts such as Alter Ego trusts (for persons 65 and over) or Joint Partner (spousal) trusts or Family trusts can be used to avoid the need for probate, or probate fees and taxes, regarding assets transferred to the trust. They can also be used to distribute income from the trust in a tax-wise manner on a continuing basis to the trust beneficiaries.

Less expensive to prepare and more flexible in scope, but less secure from abuse, is the Bare trust or more expansive Secret trust. Typically, a parent may add one of their children on to joint title with them to real estate or bank accounts or both, with the understanding that after the parent dies, the child who then holds sole title by right of survivorship to the real estate or accounts will divide the assets equally among all the siblings. 

A Secret trust agreement between the parent and the child being added to title can be used to clarify in writing that the child has no beneficial interest while the parent remains alive; and after death of the parent, the child on title would be bound to divide the property equally among all the siblings, or however is set out in the trust agreement. The result is that the need for probate, and accompanying probate fees and taxes and general delay, have been avoided. As well, there is no possibility of a wills variation challenge regarding these assets since none of these assets has passed through the will.

A Secret trust agreement may also be used to bind the direct beneficiary of an RRSP or RRIF or TFSA or life insurance policy to distribute the proceeds as laid out between the deceased and the beneficiary in the trust agreement, again avoiding the need for probate or a possible wills variation challenge regarding those assets.

Legal Presumptions, Undue Influence, and the Need to Document Intentions

When property is transferred to a spouse or minor children at no cost, it is presumed to be a gift. This is referred to as the Presumption of Advancement. In all other cases, including gratuitous transfers to adult children, it is presumed that the property was transferred on the understanding that the person receiving legal title holds it on trust for the person who transferred it, despite there being no indication nor notation on title that it is held in trust. This is known as the Presumption of Resulting Trust.

These are only presumptions, however, and they can be rebutted by sufficient evidence to the contrary. A trust agreement clearly laying out the terms upon which the person added to joint title has agreed to administer or distribute the property when the donor dies would be sufficient evidence of intention so that there is no need to rely upon presumptions. Or a Deed of Gift or Statutory Declaration can confirm the intention to actually gift the property, immediately or after the death of the donor.

In situations where, for instance, an increasingly elderly parent lives with his or her child, the potential for dependence or domination of the parent by the child is increasingly present. Where such a situation exists, and the parent makes a bequest or gift in their will to that child, and particularly if the bequest is bigger than those left for the other children, the onus is on the child to establish that he or she did not unduly influence the parent. 

Wills Estates and Succession Act section 52 confirms that in situations where the potential for dependence or domination is present, the onus is on the beneficiary to establish that undue influence did not occur.

A Statutory Declaration by the will-maker explaining the reasons for the larger bequest can help to establish that it was not the result of undue influence. This can also be useful whenever one child is provided a significant financial or property gift that his or her siblings were not, or of greater amount than that given to the other siblings, whether by will or joint ownership or direct beneficiary designation or shares in a company or any other method of transfer. It can also be very useful in cases where the transfer is to a second spouse who is not the parent of all of the will-maker/transferor’s children. 

For any older person transferring a significant asset to a spouse or child, and particularly in the circumstances just described, there should also be a letter from the will-maker’s doctor obtained on a date close to the making of the will or transfer of the asset confirming the doctor’s opinion that the will-maker is at that time:

 

a) in stable health;

b) oriented as to person place and time and is able to respond to questions appropriately; and

c) mentally capable of making financial and other decisions, including making a will.

Practical, Legal Support for Will Drafting

Get professional legal advice on wills and estates from our experienced lawyer.

Get in Touch

Contact Details

We are located in the Lynn Valley Shopping Centre in the Lynn Valley area of North Vancouver.

 

40-1199 Lynn Valley Rd

North Vancouver, BC V7J 3H2

604-985-8000

admin@lynnlaw.ca

Hours

Monday - Thursday 09:00 AM - 04:30 PM

Friday 09:00 AM - 03:00 PM

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