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Preserving legacies through trusts instead of wills

January 31, 2017/in Wills /by gartonandharris

It may be that a man or woman has the good fortune to acquire an asset of such value, financially, historically, or sentimentally, that he or she wishes to be certain it stays within his or her family. Ensuring the continuity of a treasured asset can be an important part of estate planning. For most people in British Columbia, wills are the preferred way to bequeath an asset. However, a trust may, in fact, be a better choice for passing along and protecting an asset.

Recently, the owner of the NBA’s Utah Jazz transferred ownership of the team and arena from herself to a legacy trust. Together with her late husband, she acquired 100 percent ownership of the team in 1986 in order to ensure the team would remain in the state. Her intent was to secure the future of the team in Utah and within her family.

Under the terms of the trust, she will act as trustee until her demise, after which control is passed to a board of managers. The board counts among its members four of her children and one grandchild. The trust is set up to provide the resources necessary for her family to operate the team well into the future, potentially for many generations.

Creating trusts to keep valued assets in a family may provide opportunities wills cannot, including tax benefits. Providing for the future of one’s family is a noble undertaking, but it may not be one an individual would want to take on alone. A skilled lawyer experienced with British Columbia estate law may be the right person to contact for help.

Source: USA Today, “Jazz ownership transferred to trust“, Jan. 23, 2017

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Paying taxes is an important part of estate administration

January 24, 2017/in Estate Administration & Probate /by gartonandharris

Acting as executor of an estate can be an emotional roller coaster. While seeing beneficiaries receive their gifts may bring some comfort or even joy, there are other aspects that provide neither. For example, no one enjoys paying taxes at any time, but even after an individual has passed away, the government is still owed its share. This is an important, if less pleasant part of estate administration.

The first order of business for the executor as far as taxes are concerned is to settle up with the Canada Revenue Agency. If any taxes are owed to CRA, or if there was an installment payment due prior to the date of death that had not been submitted, these must be paid. Once all outstanding taxes have been paid, it may be worth requesting a certificate of clearance. The certificate is not required, but it is proof that taxes have been paid; if the estate is divided among the beneficiaries before taxes are settled, the executor, as legal representative, may end up liable for any money still owing.

Even after outstanding taxes are paid, it is still necessary to file a final tax return to CRA. This return will cover the deceased’s income from the first of the year until the date of death. This must be filed on time to avoid penalties. Any income generated after passing away is to be reported on a separate form called a T3 Trust Income Tax and Information Return. Additionally, it may be possible to file up to three optional returns, depending on the nature of the estate.

For anyone not very familiar with the tax system in Canada, filing taxes for someone who has passed away may be quite challenging. Fortunately, it is possible to assign a representative to handle this task on one’s behalf. Having the assistance of a lawyer who practices estate law in British Columbia could be very valuable at a time like this. A lawyer’s experience with taxes and estate administration in general can help the process move more smoothly.

Source: FindLaw Canada, “What taxes apply after a person dies?“, Miriam Yosowich, Accessed on Jan. 21, 2017

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Speaking to parents about power of attorney and money issues

January 16, 2017/in Power of Attorney /by gartonandharris

One of the great benefits of modern health care is people are living longer lives, which means British Columbia parents and their children can enjoy more time together. For some, however, an extended life goes hand in hand with diminished mental capacity. Even those who do not end up enduring full-blown dementia may find they lack the acuity they once had. For that reason, it is important for children to pay attention to their aging parents and watch for signs they may be losing the ability to manage their own affairs. If they are, it may be time to discuss making arrangements such as granting a power of attorney before matters get worse.

Researchers have found that the average person begins to lose the ability to deal with new information at age 60. The aging individual may be unaware of the change, so it is important for children to watch for warning signs. These signs may include difficulty grasping simple monetary ideas, struggling with basic math, omitting important information on documents and forms, or simply taking longer to complete routine financial tasks.

Introducing a topic of this nature may not be comfortable for everyone. Experts recommend easing into the subject by using a recent example from the news or from one’s own life as a starting point. It is important to make it clear that the intention is to try and offer protection from scams, or making less than ideal choices, and not an attempt to take control of their life.

No one wants to give up their independence, or admit their mind isn’t quite what it once was. It is important, however, to make provision for the day when it is no longer possible to make important decisions without assistance. Helping parents to gain peace of mind is a noble effort and no one should feel badly about setting the ball rolling. The professionals at a British Columbia law firm who regularly handle estate matters can help to create a power of attorney, or any other advanced planning directive an individual might wish to have.

Source: Canadian Business, “Signs your aging parents need help managing their finances“, Jan. 4, 2017

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Legal guidance can make drafting wills uncomplicated

January 13, 2017/in Wills /by gartonandharris

Up-to-date estate plans can provide a significant level of peace of mind regardless of your age and the value of your assets. In fact, as soon as individuals start earning incomes, drafting wills are sensible things to do. Some British Columbia people only start considering their own mortality once they marry and start families.

You might find the prospect of drafting a will overwhelming. Fortunately, with the support and guidance of an experienced lawyer, you can accomplish the entire process drafting of drafting wills, trusts, powers of attorney and other estate planning instruments. At the law firm of Garton & Harris, a seasoned lawyer will help you to record your wishes for taking care of your loved ones once you are no longer there to do it.

Your legal representative can explain the legal requirements of a will and help you draft it in a way that will hold up in court if it is challenged. For example, if you do not make acceptable provision for your children and your spouse, the court may challenge your will upon your death. You can address most of your assets in your will, and you can include exceptions such as retirement accounts for which you have already appointed beneficiaries in a trust.

A lawyer can make sure guardianship for your children is included in your will, along with naming the individual you want to be the executor of it. Drafting of wills is complicated but necessary to ensure that asset distribution follows the wishes of the deceased person. British Columbia estate planning attorneys can make estate planning easy by providing valuable advice and input.

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Sharing estates through trusts as well as wills

January 2, 2017/in Wills /by gartonandharris

It is the desire of most people to pass along their personal wealth, whatever it may amount to, to their heirs after they are deceased. In British Columbia, as in most places, wills are the most common method for doing so. However, more and more men and women are taking a closer look at trusts as a way to share the fruits of their labours with their families before they die.

Once upon a time, a trust was viewed as a tool for the very wealthy to control the distribution of their money to assorted heirs. That is no longer the case; anyone with a reasonable amount of money, or other valued assets, can reap the benefits of establishing a trust. The main reason for doing so is to be certain of exactly where one’s money is going and for what it is being used.

For many, one of the best aspects of a trust is having the opportunity to see their heirs receive and enjoy their gifts.  While a trust can be set to pay out after the settlor (the person establishing the trust) dies, they can also be used to distribute funds before that day comes. Furthermore, the exact purpose for the gift can be specified. For example, a trust can be used to pay tuition fees for a grandchild, with instructions given to only allow payments when fees are due.

Another appealing feature of a trust is the ability to avoid probate tax if the settlor dies before the trust is fully paid out. In some cases, this may save the beneficiary a lot of money. Not that money is the only thing that can be left in trust; a cottage is an excellent example of a non-monetary asset that may be best handled in this manner. The trust can specify exactly how the asset is to be shared, and can even be set up to pay associated taxes and fees.

The advantages and versatility of trusts makes them worth considering for many people. To be certain what makes sense for a particular situation, however, it may be best to speak with a lawyer about estate planning in British Columbia. His or her experience with estate law can help simplify the process of writing wills, trusts and other important directives.

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