Are You Prepared? Discover Your Estate Planning Readiness with my Ontario Quiz – PART 2

Don’t miss Part 1 of this post, Are You Prepared? Discover Your Estate Planning Readiness with my Ontario Quiz

Answer true or false.

Q6. I can change my will by initialing the changes on the original. True or false?

False. This misconception can lead to a court case to interpret what you did. Alterations to a will can invalidate your will. You need two witnesses to sign in front of each other. Speak to a lawyer to confirm the best way to deal with minor changes in your will.

Q7. My spouse is eighty-two and ill. To avoid probate taxes, I can make all my assets jointly owned with my children. True or false?

False. This question raises probate tax reduction schemes. If you jointly own assets, even with your child, you must consider these dangers:

• Theft by the child (Yes, this happens)
• Claims by children’s creditors or their spouse in a divorce
• Child’s refusal to cooperate to return property
• Conflicting goals for the assets
• Loss of control because decisions must be joint
• Unequal division between children
• Legal presumption of ownership
• Independent legal advice is required
• Income taxes on deemed disposition of property

Learn more about the dangers of joint ownership. Set up an initial meeting with me.

Q8. I am the executor or estate trustee in a relative’s will. I do not have to use my own money to pay the relative’s debts except income taxes. True or false?

False. You do not have to use your own money to pay any estate debts or taxes. One exception to this rule is if you hand out money before you pay all bills. Executors are responsible to pay all bills including income taxes but only from estates assets. What if the estate owes $100,000 in taxes and bills? If there is only $50,000 in assets, you do not have to use your money.

Q9. We have a legal “first-aid” kit with wills, powers of attorney for property and a power of attorney for personal care. We don’t need to do anything else to protect our loved ones. True or false?

False. This legal “first-aid” kit is basic protection only if it is up to date. Don’t forget other assets that may be necessary and up to date to protect loved ones:

• Life insurance policies and designations
• RRSP/RRIF’s and pension designations
• Pre-arranged funerals
• Jointly owned assets
• Shareholders’ agreements
• Jointly owned assets
• Wills for business and foreign assets
• TFSA designations

Q10. I gave my new spouse an unrestricted power of attorney for property. My spouse cannot use this power of attorney until I am incapacitated. True or false?

False. Okay, but if you got this far you should know this: this is the biggest misconception about powers of attorney for property. If you want your spouse to have restricted power over your property, you must specify these terms in the document. Otherwise, once this document is signed, it becomes dangerous, like a loaded gun.

I can help you plan, administer or contest a will or estate. I have been helping clients since 1978.

Set up an initial meeting to discuss your will options. As a bonus, pick up a copy of my book, Estate to the Heart: How to Plan Wills and Estates for Your Loved Ones.

Estate law is all I do.