Surrey Complexed Wills Lawyer
Most people require a straightforward and simple will to look after their affairs when they pass. Typically, a simple will leaves all of the estate assets to the spouse and/or the children. However, there are situations where a complex will or multiple wills can provided more flexibility and advantages over a simple will. As well, inter vivos trusts are another method to manage your assets during your lifetime for the benefit of yourself, your spouse and children.
Inter vivos trusts:
Inter vivos trusts are legal entities that create a fiduciary relationship between the settlor of the trust, the trustee of the trust and the beneficiaries of the trust during the lifetime of a person. This is different from a testamentary trust where the trust is only created upon the death of the will maker. Two common types of inter vivos trusts are the family trust and the alter ego trust. Typically, these trusts are discretionary – meaning that the trustee has discretion in making distributions of income or capital to the beneficiaries of the trust. One of the big advantages of an inter vivos trust is that although the beneficiaries have no legal interest in the assets of the trust, they may receive income or capital from the trust at the discretion of the trustee. Trusts require careful planning, particularly in regards to the applicable provisions of the Income Tax Act of Canada and any future changes to the said Act.
Disability trust provision:
If you wish to provide for a person with reduced capabilities, either mental or physical, setting up a disability trust clause within your will can be an effective solution. Such a clause will appoint your executor or another person (the “Trustee”) to be responsible for carrying out your wishes in regards to the disabled person. Typically, a will maker will set aside a portion of their estate which will be held in trust for the benefit of the disabled person and administered by your Trustee. Usually, the will maker grants broad powers to the Trustee to manage the trust and provide for the needs of the disabled person which can include paying for clothing, household equipment, transportation, healthcare costs and care providers and education costs. As the disability trust can last for a lengthy period of time, ensure that your Trustee has provided consent to being appointed and that an alternate be named as well. In addition, the trust clause should allow discretion in giving any benefit to the disabled person such that any government benefits received are unaffected or reduced minimally as possible.
If your estate is large and complex, it may be easier for your beneficiaries if a professional is used to administer your estate rather than a beneficiary or family member. Being an executor of a will is a time-consuming endeavour, especially if the estate has many assets or owns a business. Most executors have a full-time job and are unable to devote their full time and attention to probating the estate. A will maker can appoint a trust company to be the executor of the estate. Many trust companies are affiliated with chartered banks or credit unions. They have dedicated persons who offer professional executor services. However, trust companies do charge a fee for administering an estate whereas a regular executor has the option to charge a fee. As well, trust companies require specific wording to be included in a will to appoint them as executors.
For business persons, it may be advantageous to have multiple wills. In order to probate a will in BC, a fee of approximately 1.4% of the gross value (not the net value) of the estate must be paid to the province. The Wills, Estates and Succession Act of BC, does not require a will be probated. A business worth millions of dollars can attract a hefty filing fee in order to obtain probate. However, government agencies, such as the Land Title office and ICBC require probate to transfer assets to the executor of the will. By splitting the estate assets and dealing with them in separate wills, a will maker can use one will to deal with assets that do not require probate (such as shares in a closely held private corporation) and a separate will can be used to deal with assets that do require probate (such as real estate).