How Divorce Affects Your Estate Plan

Woman removing wedding ring from ring finger

Divorce is among the most painful events that an individual can go through. But even more so is the need to revisit the legal documentation that governed one’s planned future. When getting married, many couples create estate plans, such as wills and trusts to protect their assets and ensure their wishes are respected in the event of their death. When you get divorced, it’s not just about dividing your assets or finances; it also affects your estate plan. In this blog, we’ll talk more about how divorce can affect your estate plan and what you need to do about it.

Change Your Beneficiaries: If you named your spouse as a beneficiary on any of your financial accounts or life insurance policies, it’s important to update them as soon as possible. Your ex-spouse will automatically be removed from his or her position as a beneficiary if they are named in your estate plan, but if they are named in any stand-alone accounts, they may still receive those assets when you pass away. Reviewing all your beneficiaries and updating them to reflect your current preferences ensures your estate plan aligns with your intentions and goals moving forward.

Update Your Will: Your will determines how your assets are distributed once you pass away. If you had previously designated your spouse as an executor or beneficiary in your will, this will change after your divorce. After your divorce or separation, you will want to have your will modified so that your assets and property are distributed according to your current wishes and intentions. Additionally, when updating your will, you should establish guardianship for any children in case of your death.

Addressing the Trusts: Similar to wills, the terms of any trusts, which are often established to protect and distribute assets, may change when you divorce. For instance, a revocable living trust may have included your ex-spouse as a beneficiary or successor trustee. To ensure that the trust aligns with your current wishes, you should seek the assistance of an estate planning lawyer to review and update it in case changes are necessary to accommodate your new circumstances.

Reexamine Your Powers of Attorney: When you made your estate plan, you probably appointed your spouse or other people to serve as a power of attorney. This person has the power to make healthcare or financial decisions on your behalf if you become unable to do so. After you have legally divorced, it is vital to revisit these documents and update them so that they reflect your current needs and wishes.

Collaborate With An Experienced Estate Planning Lawyer: When you’re confronting probate legal questions and revision of estate plans, you should collaborate with an experienced estate planning lawyer. They’ll assist you in working or modifying your estate plan correctly to ensure that your wishes match your current life circumstances. Estate planning experts will provide the latest and up-to-date information, allowing you to keep a sound estate plan.

Divorce is a life-changing experience that can affect your estate plans in significant ways. It is important to ensure that your estate planning documents align with your current wishes and intentions after a divorce. Collaborating with an experienced estate planning lawyer is a crucial step in this process. By following the above guidelines, you can make the necessary changes to your estate plan and obtain peace of mind that your assets will be distributed according to your wishes and intentions.

Avoid These Estate Planning Mistakes to Protect Your Legacy

Estate planning is not something that people enjoy thinking about, but it is essential for every individual to plan their estate to ensure their legacy is protected for the future generation. Proper estate planning is about creating a comprehensive plan of action for who will receive your assets and how they will be distributed, in the event of your incapacity or death.

However, estate planning can be a challenging task. Many people make mistakes in the process which can cause significant issues down the line. In this article, we will discuss the most common estate planning mistakes that people make, and how to avoid them.

Mistake #1: Failing to Plan

Many people avoid the process of estate planning altogether, thinking that it is not necessary. However, failing to plan properly can lead to significant trouble for your loved ones, if something happens to you. Without a will or a trust plan, your assets will be distributed by provincial law, which might not necessarily align with your wishes.

How to Avoid: The best way to avoid this mistake is to work with a professional estate planning lawyer to create a comprehensive plan that is aligned with your wishes.

Mistake #2: Not Updating Your Plan

Even after creating an estate plan, people make the mistake of not updating it when significant life events occur. Life events such as the birth of children/grandchildren, divorce, and other significant life changes can significantly impact your estate planning needs.

How to Avoid: Ensure that you are reviewing your estate plan regularly with your estate planning attorney to make the necessary changes based on significant life events.

Mistake #3: Not considering Your Beneficiaries

Not all assets are passed by probate, which means you need to pay attention to each asset’s beneficiary designation. In some cases, people forget to update their beneficiary designation or leave it to the wrong people.

How to Avoid: Always ensure that your beneficiary designations are consistent with your estate planning documents and are up to date.

Mistake #4: Choosing the Wrong Trustee or Executor

When selecting a trustee or executor, people often make the mistake of choosing family members without considering their qualifications or ensuring that they are willing to serve.

How to Avoid: Choose a trustee or executor that is reliable, trustworthy, and competent to carry out their duties as defined under your plan.

Mistake #5: No Power of Attorney or Personal Directive

An enduring power of attorney and personal directive is necessary for everyone to ensure that their health care and financial decisions can be made, in the event of incapacity or disability.

How to Avoid: Work with your estate planning lawyer to create an enduring power of attorney and personal directive that is consistent with your estate plan.

Estate planning is about making sure that your assets end up in the right hands and that your loved ones are protected. While it may seem like a daunting task initially, avoiding mistakes can help ensure that your estate plan is comprehensive and up-to-date. Work with an estate planning lawyer and avoid the mistakes discussed in this article to ensure that your wishes are fulfilled and your legacy is protected. Proper estate planning is a tribute to your loved ones and the ideal way to secure your family’s future.

At Summit Legal Group, we include a comprehensive Will Package, which includes the Will and Last Testament, as well as the Personal Directive and Enduring Power of Attorney. Reach out to us today to find out how we can help and ensure your legacy is protected in the preparation of your legal documents.

Estate Planning: Lawyer vs. Do-It-Yourself – Which is Better

Estate planning is important for everyone, regardless of age or the size of your estate. It’s a process of organizing your assets and taking care of your loved ones in the future. Estate planning involves drafting wills, trusts, and other legal documents. Although some might consider doing it themselves, there are several reasons why hiring an estate planning lawyer is the better option.

The Complexity of Estate Planning

Estate planning involves many legal documents, which are complex and require professional knowledge and expertise. An estate planning lawyer can provide guidance and ensure that they draft documents correctly. An experienced lawyer will assess your situation, understand your goals and needs, and create an estate plan that meets your requirements.

Mitigating Risks

Estate planning can help mitigate the risks of potential legal battles between beneficiaries. A lawyer can ensure that the estate plan adequately addresses the clause that outlines the distribution of assets.

Saving Time and Money

Estate planning can be time-consuming and costly, but a lawyer can help you save money and time in the long run. An estate planning lawyer can help you complete your wills and other legal documents much more quickly and efficiently while ensuring they consider any legal and tax implications.

Keeping Up with Legal Updates

Estate laws are constantly changing. An experienced estate planning lawyer can keep you up to date with any updates that might affect your estate plan.

Legal Protection

An Estate planning lawyer makes sure you are protected from unforeseen circumstances, such as heavy tax liabilities, breach of contract, and much more. A lawyer will ensure that the estate documents comply with the legal standards embedded by the province.

Estate planning is vital, and a mistake in this area could bring severe consequences to your beneficiaries. While doing it yourself might be the less costly option, the benefits of using an estate planning lawyer are significant. An experienced estate planning lawyer can ensure that your wishes are met, mitigate any potential risks, and take care of the complexity of the legal documents. Therefore, it could save you and your beneficiaries time and money in the long run. It’s vital that everyone should make an effort to consult and employ an estate planning lawyer to avoid any unpleasant circumstances.

If you have any questions about estate planning or if you are not sure what you need, get in touch! You can schedule a complimentary consultation with our Estates Manager who can assist with some of your initial questions. Get in touch with us today to help you with your estate planning needs.

New Year, New Estate Plan: Why Now is the Perfect Time to Evaluate your Estate Planning Needs

The New Year is upon us once again. With it comes the perfect opportunity to re-evaluate certain aspects of our lives. While most of us use this time to set goals and resolutions, many overlook a crucial element – estate planning. Estate planning may not be the most exciting topic, but it is essential. It secures the future of your loved ones and ensuring that you decide how you distribute your assets. In this blog post, we will discuss why the New Year is the perfect time to evaluate your estate planning needs.

Changes in Life Circumstances

One of the primary reasons to review your estate plan is if your circumstances have changed since the last time you made one. Did you get married or divorced? Or, did you have a child or adopt one? Perhaps some recent business decisions may impact your assets. Did you sell or acquire assets? All of these events may impact the way you distribute your estate and so it is imperative to update your estate plan to reflect these changes.

Tax Laws and Estate Planning

Tax laws are always evolving, which may impact your estate plan. Sometimes these changes may have an impact on how much your heirs may receive. An estate planning specialist can give you the best advice about minimizing your tax liability and maximizing the inheritance for your beneficiaries.

The Importance of Updating Your Beneficiaries

One of the simplest yet most important parts of estate planning is naming your beneficiaries. However, it is essential to ensure that your beneficiary designations are up to date. Many people forget to update their beneficiaries even after major life changes have occurred, which may lead to unintentional complications.

Ensuring Your Wishes Are Carried Out

One of the primary benefits of having a proper estate plan is the ability to have more control over what happens to your assets after you pass away. Even if you do not have substantial assets, you may still want to have control over your sentimental possessions. By putting a proper estate plan in place, you will ensure that your executor can carry out your wishes.

Protecting Your Family’s Interests

Estate planning is not only about you, it is also about your family. A proper estate plan will ensure that you protect your family’s interests and can outline them clearly. It can protect them from potential legal battles, the probate process, and provide peace of mind during a difficult time. A comprehensive estate plan can give your family the tools they need to move on from your passing with ease.

The New Year provides an excellent opportunity to evaluate your estate planning needs. Regardless of age, income, or family structure, estate planning is essential for protecting your family’s interests and ensuring your wishes are carried out. By reviewing your estate plan and updating it as necessary, you are giving yourself and your family peace of mind and security. Contact us to see how we can help ensure that you manage your assets according to your wishes and your legacy lives on as you desire.

Essential Elements to Include in Your Estate Plan

Death is an inevitable part of life, and we don’t like to think about it much. However, it is essential to think ahead and plan for the future, especially by preparing an estate plan. It’s a critical document that ensures your last wishes are met and helps to prevent chaos and confusion among your loved ones after your passing. An estate plan will divide your property and assets, designate guardians for your minor children, and even help with tax planning. In this article, we’ll discuss the essential elements that must be included in your estate plan.

A Will:

A will is a legal document that specifies how your assets and property should be distributed after your death. If you don’t have a will, the court will decide who gets what, which may not be in accordance with your wishes. Your will must specify the distribution of your assets, the person responsible for executing your will, and the amount of inheritance for each beneficiary.

Enduring Power of Attorney and Personal Directive:

An enduring power of attorney and personal directive designates a person to manage your finances and healthcare decisions if you become incapacitated and cannot make decisions for yourself. An enduring power of attorney will allow your designated representative to access your accounts, pay bills, and make financial decisions on your behalf. A personal directive will allow your representative to make medical decisions for you if you are not able to.

 

Guardianship:

Designating a guardian for your minor children is another crucial element of estate planning. If you have minor children and both parents pass away without naming a guardian, the court will appoint someone. This may be a different person altogether, so it’s essential to ensure that your wishes are met. You’ll want to consider factors such as age, location, and values when choosing a guardian.

 

Beneficiary Designations:

Life insurance policies, registered investments, and other accounts require beneficiaries, and these designations must be updated regularly. Make sure you list primary and alternate beneficiaries, and check with your retirement account custodian to ensure your designations are updated and accurate.

 

Digital Estate Plan:

As our lives become increasingly digitized, it’s critical to include a digital estate plan that covers things like social media profiles, online banking, and other online accounts. You may want to consider designating a separate executor for your digital assets, leaving instructions for how to access and handle these accounts.

 

When it comes to estate planning, everyone’s circumstances are unique, so it’s essential to talk to a lawyer or estate planning professional who can help you create an estate plan that meets your specific needs. While drafting an estate plan may seem overwhelming, it’s an essential step to take that can provide peace of mind for you and your loved ones. By following the steps discussed in the article, you can create a comprehensive estate plan that helps to ensure your last wishes are met.

Reach out to us today and let Summit Legal Group guide you in the estate planning process. 

AUTHOR

Craig Gorham is a Certified Executor Advisor at Summit Legal Group, guiding clients through the Estate Administration process with compassion, empathy and a wealth of specialized knowledge. Craig can be reached directly at 587-393-2069 or craig@summitlegalgroup.ca.

Summit Legal Group wins the 2024 Top Choice Award for Wills and Estates Law Firm!

UPDATE (January 11, 2024)

We are pleased to announce that Summit Legal Group WON the 2024 TOP CHOICE AWARD for WILLS & ESTATES LAW FIRM!

Check out all the 2024 Winners here.

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Summit Legal Group is pleased to announce that once again, we have been selected by the prestigious Top Choice Awards as a nominee for the “Top Choice Wills & Estates Law Firm” of 2024!

This nomination is a testament to all the hard work and dedication of our team, providing high-quality legal services in wills and estates. Each of our lawyers and our Certified Executor Advisor are committed to providing our clients with top-notch legal expertise and advice. Our lively and engaging staff are passionate about helping clients navigate estate planning, trusts, and other services related to wills. With our experienced team behind us, we feel confident that we can achieve this great honour!

We invite you to join us in celebrating this incredible opportunity by casting your vote today to help make us YOUR TOP CHOICE!

VOTE HERE: https://topchoiceawards.com/vote?survey_id=V0uE4zGn

But wait, there’s more! By simply voting, you automatically enter a draw with a chance to win one of four incredible $500 cash prizes generously offered by Top Choice Awards!

Stay tuned for further updates and exciting developments on our journey to victory!

I Have No Assets, Do I Still Need a Will?

When you hear the word “estate,” you tend to think of wealth, property, and assets. As such, people assume that creating a Will is only necessary for the wealthy. Regardless of your financial status or age, having a Will is an essential component of your life planning strategy.

Protecting Your Loved Ones: Your Will enables you to specify your wishes for your children’s guardianship should something unexpected happen to you. Without a Will, the courts decides and manages decisions regarding their well-being.

Protecting Your Digital Estate: In today’s technological era we have various digital assets including social media accounts, web domains, crypto currency emails, and online storage. Assigning someone you trust as the executor of these accounts in your Will can save your family members from a lot of stress and difficulties.

Ensuring Quick Dispensation of Your Assets: When someone dies, the process of dispersing the estate could take years. With a Will the process to can be more convenient and faster for your family members.

Trust and Peace of Mind: A Will is a way to provide reassurance and support for your loved ones by providing clarity and ensuring distribution of your estate is according to your wishes.

Flexibility: A Will does not take effect until your death, so you can modify or revoke your Will anytime you wish while you’re alive.

A Will is essential for everyone—not only the wealthy. A Will is a valuable component of a well-structured life plan. It’s a symbol of your love and care for your loved ones and proves invaluable to ease their difficulty when you’re gone. So don’t hesitate, make your Will and provide peace of mind to those who matter the most to you.

Craig Gorham
Certified Executor Advisor

AUTHOR

Craig Gorham is a Certified Executor Advisor at Summit Legal Group, guiding clients through the Estate Administration process with compassion, empathy and a wealth of specialized knowledge. You can reach Craig directly at 587-393-2069 or craig@summitlegalgroup.ca.

Estate Planning for Self-Employed Individuals and Small Business Owners

When you leave your pet for a weekend, you have a plan. You know who’ll feed it and how much it will cost. So, what happens when you step away from your business for the weekend? More importantly, what will happen when you leave your business for much longer – as in, permanently?

Anyone who owns a small or medium-sized business, regardless of age or stake in the company, should give some serious thought to succession planning. Why? Because you never know when you’re going to be hit by a wayward bus. That metaphorical bus could kill you; or worse, could leave you physically or mentally incapacitated. In addition to a will, you should also have a personal directive and power of attorney to deal with financial and health care matters in the event the metaphorical wayward bus doesn’t kill you, but you become physically or mentally incapacitated.

If a business owner dies and there’s no plan in place, it’s the survivors who are left without direction. While your business might be humming along right now, how will it be if you’re not around? Executing someone’s affairs after death is a whole new, and potentially messy, ballgame. If you want to take care of business even after you’re gone, you need to plan what will happen to your estate, and that includes your business.

As a business owner, it’s quite likely that a significant portion of your wealth, and your family’s source of income after your death, is tied up in the family business. The success of your estate plan is dependent upon the business being transitioned to the next generation or sold to someone outside the family for a fair price. Proper estate planning can keep your business from becoming a fire-sale.

The key to successful estate planning is communication and documentation. You want to communicate with your family about a wise path for the future. But you also want to document those wishes in an estate plan to prevent future disagreements. I recommend clients review their wills every five years, or when their circumstances change, such as the birth of children, deaths in the family or a change in their financial circumstances.

SELF EMPLOYED & SMALL BUSINESS OWNERS

Estate planing considerations for small business owners include:

Minimizing Taxes

If nothing else, one good reason for estate planning is to minimize the amount your estate will owe in taxes. You’ve worked hard to establish your business as a profitable entity. Don’t lose the fruits of your labor to the CRA in taxes.

Owner Dependent Business

Although the business may, in fact, become worthless upon the owner’s death, tax may theoretically be imposed on the value of the business on the day before the owner died. If the owner’s death is unexpected the business may be thriving immediately prior to the owner’s death. To minimize the risk of the surviving family members owing tax on a business that no longer exists, you should document the business plan and the business’ characteristics that act to limit transferability of the business. Your ability to prove the limited value of the business is crucial to avoiding tax on a business that no longer exists.

Sole Proprietors

If you’re a sole proprietor, you’re well aware that your business is not separate from your personal assets – in a sense, your business is you. Probably more than any other type of business organization, you need a clear plan of action for what should take place after you’re gone. What you own personally can be used to cover business debts. Delegate and prepare your successor if you want to pass on the business. If you want to sell the business, do the research that will make selling it easy and inexpensive for your heirs.

Family Run Business

In a family-run enterprise, you may have some heirs who are involved in the business and others who are not – how do you divide your business assets? Many people choose to distribute assets based on a relative’s contribution level. Let’s say two of your children are going to take over the family business. Do you want your third, uninvolved child to have an equal share? Perhaps you want the two involved siblings to buy out the third. Regardless of what you decide, controlling these types of choices is critical. After all, the passing of a family member is hard enough to deal with on its own. Proper estate planning at least allows your business to have a smooth transition.

Buy-Sell Agreements

A buy-sell agreement is a contract between shareholders or partners which establishes a plan for the business in case one of the owners dies or becomes incapacitated. The principal benefit of a buy-sell agreement is that it establishes a sale price for the business and your share of the business. A buy-sell lets you document whether or not you want your partners to buy out your share, if you want to block certain individuals from having a role in the business, or if you want your heirs to sell your portion. Since the business price has been established, family members know they are receiving a fair price.

As any good business plan anticipates the future, a buy-sell agreement is simply another aspect of good business. While creating a buy-sell agreement requires open communication with both your family and your business partners, which can be difficult to achieve, it will establish a solid path for the future, greatly reducing any potential for disaster.

Life Insurance

If the business assets are not liquid, where do partners get the capital to buy out a deceased partner’s shares? Very often, the necessary capital comes from life insurance. This is a common business practice – each partner takes out a life insurance policy which names the other owners as beneficiaries. This strategy gives surviving owners tax-free proceeds to purchase the deceased’s portion of the business from his or her estate.