Written by: Vicki Xu
Estate planning is imperative for anyone who wishes to leave their wealth to their loved ones in a cost and time-efficient manner. Effective estate planning could reduce taxes payable, prevent lawsuits among one’s beneficiaries, and ensure that one’s wishes are followed.
Below is a list of the instruments you may need to prepare a comprehensive estate plan. Each of these tools addresses a different aspect of estate planning. Therefore, we recommend booking a consultation with one of our estate planning lawyers to create an estate plan tailored to your specific needs.
1. Will
A will is a document that specifies how an individual’s wealth will be distributed after their death. If someone dies without a valid will, their estate will be distributed in accordance with British Columbia’s mandatory intestate distribution scheme. This distribution scheme might not align with the individual’s wishes.
Besides controlling the estate’s distribution, a will could also perform other functions which the intestate distribution scheme cannot account for. For example, parents are able to appoint a guardian for their minor children within their will.
2. Trust
Under a trust, assets are held and managed by a trustee for the benefit of the trust’s beneficiaries. The income and capital of these assets will be distributed to the beneficiaries in accordance with the terms of the trust.
This legal instrument is suitable for individuals with a sizeable estate who seek to maintain control over the timing, amount, and type of its distribution. Trusts also have the added benefit of shielding assets from wills variation claims. For more information about wills variation claims, please read my other article “Wills Variation: The Courts Could Change Your Will After Your Death”.
3. Designated Beneficiary and Joint Tenancy
The government collects a probate fee of approximately 1.4% of the gross value of the estate. Fortunately, there are ways to reduce the amount of this fee. Assets that do not undergo the probate process are exempt from probate fees. This includes jointly held assets as well as assets which have beneficiary designations.
Please feel free to contact our office at (604) 558-2258 or info@hendersonleelaw.com to book an initial consultation with one of our estate planning lawyers.