Have Those Difficult Conversations Now: What Are Your (or Your Loved One’s) Wishes?
Note: This is the 3rd of a series of blog posts on the difficult conversations we all need to have with our loved ones. This series is also published in the Local Seeker.
In the first post in this series, I recommended starting your difficult conversations with your loved ones with the basic question of “What legal documents do you have in place?” The second post reviewed how important it is to know who is doing what if you (or your loved one) pass away or become incapacitated.
The next part of the conversations is to review what are your (or your loved one’s) wishes in the event of death or incapacity. There are several questions to either ask or answer here:
- What are long-term care preferences? Is a facility or home care preferred? If a facility is preferred, what amenities, location, et cetera is preferred. If in home care is preferred, at what point should care be transitioned to a facility?
- What are medical preferences and wishes? What type of medical care is wanted after a diagnosis of Alzheimer’s disease, cancer, et cetera? What are wishes about life support or other end-of-life decisions? I speak to clients all the time about these tough choices and most people have VERY specific wishes.
- What are funeral or burial wishes? Again, many people have quite specific wishes here and their loved ones should know what those are.
The above three topics can lead in several directions. The most important thing is to have a discussion about all of the “what ifs” and make sure that everyone involved knows what things are important to you (or your loved ones).
It is very difficult to honour someone’s wishes if you don’t know what they are. It also can be a challenge to make difficult decisions without knowing what the deceased or incapacitated person wanted. Lastly, a frank discussion with members of your family about what you want and who is to make the decisions for you can be helpful in preventing family disagreements when difficult decisions need to be made. Although you still need to ensure your legal documents reflect your wishes, having the difficult conversation is essential.
Stay tuned for the final article in this difficult conversations series, but don’t wait for it – get started talking about these issues with your loved ones today!
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Michele R.J. Allinotte is the owner of Allinotte Law Office in Cornwall, Ontario and she helps her clients make the best decisions for themselves, their families and their businesses. Her practice focuses on the areas of business law, estates and estate planning and real estate. Visit www.YourCornwallLawyer.com to get her FREE Peace of Mind Personal Inventory to make sure that your family has all the information they need.
Cornwall Wills and Estates Lawyer Asks, “Will Your Small Business Survive after Your Death?”
You’ve worked so hard for the success of your small business, but have you thought about what will happen to it after you’re gone? By planning in advance, the small business owner can ensure that his or her wishes are followed should the unthinkable occur. Not only does this kind of planning make for an easier transition on those left behind, but it also saves money and can literally keep the business from failing altogether.
Your small business is a part of your estate, and just like your home and other assets, planning needs to be done for how it should be handled upon your death. You’ll want to go over your options with a qualified Cornwall and area wills and estates lawyer (as well as your accountant!) and make your decisions legal and binding with proper documentation. Of course, you’ll also want to communicate with those individuals who will be charged with following your wishes and keeping the small business running smoothly.
Unfortunately, the death of a small business owner can also spell the death of the business. Estate administration (also known as probate) taxes and income taxes can be so expensive that the business just can’t survive paying them. Or, the other partners in the business cannot afford to buy the decease’s share in the business, so the business gets sold to a third party and the profits divided.
Laws like this play a role in the fact that small businesses do not typically survive through the generations. According to The Small Business Review, only about 30% of family businesses make it to the second generation, 12% to the third generation, and 3% to the fourth generation. Obviously, there are a number of factors involved, but the need to pay taxes and take care of other transitional costs creates a significant burden in passing a business on to heirs.
By planning in advance, you can take advantage of tax reduction planning and limiting (or avoiding) probate taxes. Many of the options available to small business owners can only be utilized before death, not after, so it is important to make plans for your business succession now.
Are you interested in using this article in your newsletter or on your blog or website?
You can, but please use this complete caption with it:
Michele R.J. Allinotte is the owner of Allinotte Law Office in Cornwall, Ontario and she helps her clients make the best decisions for themselves, their families and their businesses. Her practice focuses on the areas of business law, estate planning and real estate. Visit www.YourCornwallLawyer.com to get her FREE Peace of Mind Personal Inventory to make sure that your family has all the information they need.
How Canadian Citizens Should Own Florida Property
Note from Michele: This is a guest post by my colleague, Maura S. Curran of The Curran Law Firm, P.A. in Jupiter, Florida (www.TheCurranLawFirm.com), which originally appeared on her blog at: http://thecurranlawfirm.com/blawg/?p=37. This issue is an important one for those of you who own or are thinking of buying a vacation home outside of Canada.
By Maura S. Curran
Are you a Canadian and own real property south of the border? Far south, say in Florida?
If you are like many Canadians, you own a second home in the US, and in particular, the Sunshine State, Florida. Why not? Florida has beautiful winters – no need for parkas and galoshes here, nope, just sunscreen and sunglasses. But do you understand what happens if you die leaving property in the US? What about if you become incapacitated?
There are many questions to consider if you become incapacitated or die while owning real property in Florida when you are not an American citizen. Will there be US federal estate taxes? Do you have to probate? Who is allowed to be the personal representative? Does my estate need an attorney?
Florida law requires anyone dying and owning Florida real property in their own name to file a probate in a Florida Circuit Court so the property can legally transfer to your beneficiary. The probate process can take several months, cost thousands of dollars in fees and costs, and is public record plus it can create unnecessary stress on everyone involved with an international probate.
But did you know that probate is voluntary? You can legally avoid the cost and time and public nature associated with probate. One common way is to have a revocable living trust own your property. When a trust owns the property you avoid probate and your beneficiaries can avoid the hassle, delays, costs and stress of having not only a probate, but an international probate.
Do not be confused however, a trust alone will not avoid federal US estate taxes. Depending on the size of your assets, your estate may be subject to federal estate taxes. Currently there are no federal estate taxes, however, starting in 2011 depending on the size of your estate, your estate could be taxed at 55% ! So if you own property exceeding $1 million you need advanced estate planning in order to minimize, if not avoid, federal estate taxes.
Want yet another reason to have the property held in a trust? Should you become incapacitated, there is no need to have a Florida probate court approve the guardianship of the owner – another time consuming, stressful court procedure. Rather, if you are the Trustee, the successor trustee will assume your duties – much quicker and easier process to change a trustee than to get court approval for a guardianship.
If you are a Canadian citizen and own or are considering purchasing property in Florida, call my office and ask to have a consultation regarding your Florida home or visit my online virtual office at www.AbacoaVLO.com – serving all of Florida!
Are You Planning On Getting Hit By A Bus?
As you know, I do estate planning, which means I talk to clients about what might happen should they die or become incapacitated.
For some reason, the phrase “So, if I get hit by a bus tomorrow …” tends to come up quite often during my conversations with clients. Realistically speaking, many of my clients will have no need for their estate planning documents until they are well into their old age, so some of the things we plan for will never actually happen.
But we do plan for them because, you never know, you just might get hit by a bus some day. And if you did, what would happen?
I’ve been thinking about this for a few days from a few different angles.
The first is that my husband was at a work meeting and one of the topics was planning for succession at his place of work. The complaint was that there was not formal training to mentor those employees who might eventually move up the ladder, so to speak.
When my husband and I talked about that, I said that yes, there needs to be a plan for when people retire, but also, you need to think about people getting hit by a bus (see, it comes up often!). What would happen if an employee/supervisor/manager didn’t show up for work one day? Would people know what he was working on? Could things be picked up where they were left off? Is there essential information about the work place that only that individual knows? These are all things that every work place needs to consider.
See, the thing is, I actually know someone who got hit by a bus. When I worked in Ottawa, it happened. One of the IT employees was walking to work and was struck. He was conscious and so he was able to make a phone call. His first phone call was not to his family, but to his supervisor at work! Thankfully he was ok, but what would have happened if he wasn’t?
Another reason I have been thinking about this is because I knew I was attending a meeting last week and the presentation topic was succession planning for business owners.
It was a great presentation on a topic so many business owners tend to ignore or delay their decision making (sometimes until it is too late). The statistics back me up on this one – according to an October 2006 study by the Canadian Federation of Independent Businesses, over 65% of small and medium sized business owners were intending to retire within 10 years. Of all business owners surveyed, only 10% had a formal plan to exit the business. Some had an informal plan, but over 50% of business owners had no plan at all!
Thinking about your death isn’t exactly fun. But we all have a 100% chance of dying. Hopefully, we won’t get hit by a bus tomorrow (or any day) but it is much easier to plan for it now than to leave our families, our work places and our businesses to pick up the pieces if we don’t have a plan.
If I Don’t Own Anything, Why Do I Need A Will?
One of the most frequent questions people as me is “Do I need a will?”. When I say yes, everyone over the age of 18 who is competent to make a will should do so, the reply is often, “Well, I don’t own anything.”
Firstly, if you have children, even if you think you don’t own anything, you absolutely need to make a will. A will is the only way in Ontario that you can appoint who should take care of your children in the event that both you and their other parent were to die. I could go on about more reasons why parents need to make a will, but that is the most basic and essential reason.
Secondly, are you sure you don’t actually own anything? Do you have a bank account? Are you entitled to receive recurring income from employment or other sources? Do you own life insurance? Do you have any sort of pension, RRSPs, RESPs, no matter how small? Do you own any investments, GICs, mutual funds, Savings Bonds, etc? Do you own a car, a motorcycle or other personal property? Do you rent an apartment? Is there furniture, a TV, stereo equipment, et cetera in your apartment or your residence? If you answered yes to even one of these questions, you own something.
When you own something, that “stuff” needs to go somewhere if you die. Your will can say who gets your property and who deals with distributing your property (and dealing with your burial and other matters) after you die.
Also, if you rent an apartment or a house, someone will need to clear that out and terminate your lease with the landlord.
If you don’t have anything in place when you die, do you know who would step forward to make arrangements and deal with the items you left behind? Do you know if they would be able to deal with your items without a will? Do you know if they would have enough money to make funeral arrangements? Do you know if they would need to apply to the court to administer your estate (which could end up costing more than the value of your estate’s assets)?
These are all things that a lawyer can talk to you about so you can figure out what it is that you want to happen after your death and make a plan so your loved ones know what to do.
Do you want to deal with this now or let your family deal with it later?
The title of this article came from my childhood clumsiness. I was known for spilling my drink when my family went out for supper. It got to the point that my father would ask me at the start of a meal, “Do you want to spill your drink now, or wait until later on?” He knew I would spill it at some point, so why not get it over with, he joked.
I was reminded of this when someone emailed me recently and asked me how they could convince a loved one that they need to do a Will. I explained to the person what my normal process is for estate planning clients. When I meet with clients, I go through what the law provides for in the absence of a Will. Most people will choose to do something other than what the government has chosen for them.
But the more I thought about the request, the more I realized that the legal reasons why people need to do an estate plan are not the reasons that are going to make them “just do it”. Doing an estate plan is admitting that you might actually die, and for some people, this is hard to deal with. Death and dying are difficult things to talk about, especially with a stranger, and especially a stranger who happens to be a lawyer. Although I feel that I am pretty approachable and accessible, I do understand that going to see a lawyer for many people can be intimidating.
So, we’ve established that talking about death and dying with a stranger, who is a lawyer, is intimidating. Now, let’s look at how an individual’s family would feel dealing with this situation after the passing of a loved one
The family will be shaken by the death of a loved one. In the immediate after math, and possibly even before death, there would be decisions that would have to be made.
If the situation called for the possibility of organ donations or required someone to make financial or personal care decisions for their family member, without an estate plan the family would not know what to do.
After the death, one of the first things that needs to be done is to make the funeral arrangements. In the absence of an estate plan, the family would not know what to do. How would they know what their loved ones wishes were? All these decisions would need to be made by the family without the benefit of knowing what their family member would have wanted.
The next step is to look at how the family is going to deal with the loved ones assets. The family would speak with the bank and any professional advisors that the deceased might have had. One of the first calls is often to a lawyer. If the deceased did not have an estate plan, the family will call a lawyer that someone knows perhaps or they could just pick a name out of a phone book.
So, a family in shock and reeling from the death of a loved one must also be put in the position of talking about death and dying with a stranger.
But it doesn’t have to be this way.
We all could give a gift to our family members by having an estate plan. Only you can do this for your family, because once you are gone, the decisions become theirs to make.
When doing an estate plan at Allinotte Law Office, I make the process as painless as possible. I deal with clients in a caring and compassionate manner and help make the decisions that are best for them and their family and, if applicable, for their business. I invite my clients to bring in their family members to meet me so they know who I am and who to contact in the event that their loved one passes. Because it is not possible to meet everyone in person, I do provide letters to the possible executors of an individual’s estate as well as the possible guardians letting them know what their duties are and how to contact me. Although they have not met me in person, I am no longer a stranger.
But no matter what my process is, I cannot force someone to come in to my office. You need to choose to make that first step. The only thing I can tell you with certainty is that at some point, the issues surrounding your death or incapacity will need to be dealt with.
So I ask you this: Do you want to deal with this now or let your family deal with it later?
The baby that came with instructions
A couple of weekends ago, I had the pleasure of babysitting my little 5 1/2 month old nephew. My parents are away and my sister-in-law’s family does not live in the area, so I was on duty so my brother and his partner could go to a comedy act in Ottawa.
My kids and I were excited to have the chance to spend some time with him, but I was a bit late getting home due to a work issue. When I got home, my nephew had already been there with my husband for about 45 minutes. He was getting a bit fussy, so I scooped him up and tried to soothe him and I ultimately ended up putting him down for what I thought was a quick nap. I was wrong – he slept the entire night! There was no play time at all!
Because I had come home in such a rush, it wasn’t until after he was asleep that I saw the instructions. My sister-in-law is very organized, and had a full sheet of printed instructions about his routine, eating habits, how to change his diaper – it was all there. At the end of the instructions, she let me know where all their important documents were stored in their house, presumably if something were to happen to her and my brother. She wrote “you’ve prepared me well!”.
But there was just one problem. I had no legal authority to keep and care for my nephew in the event that my brother and his partner didn’t come home from the comedy show. If that little guy’s parents had never showed up, I would have had to call the police. Without any documentation appointing me as his guardian, I would not have the legal authority to take care of him until his custody had been decided. There is a very real possibility that he would have to be placed in foster care, even if only temporarily. I don’t know about you, but I wouldn’t want a child I love to spend one minute in foster care when he could be with people who love him.
Unless they have seen another lawyer recently, I know my brother and his partner don’t have an up to date estate plan to deal with their blended family situation. I think my brother might have a will, but I’m pretty sure what is in there no longer applies. I don’t know if my sister-in-law has a will. Yes, just like the cobbler’s children have no shoes, my family members do not have their estate planning documents in order.
I asked my sister-in-law for her permission to write this blog about her. She will read this, so I know she will be taking steps in the very near future to make sure that her family is protected by updating her estate plan and doing a Kid’s Protection Plan to appoint long term and short term guardians.
Do you know what would happen to your children if you and your spouse or partner didn’t come home from “date night”? If you are like my sister-in-law and haven’t appointed long term and short term guardians for your children, call my Client Services Director, Erin McEvoy at 613-933-7720 or click here to set up an appointment for a Family Wealth Planning Session with me.
As a special advance bonus to my blog readers, if you are a parent who owns a home in the Cornwall area and you make an appointment for a Family Wealth Planning Session between now and the end of February, I will give you a $75.00 gift certificate to a local restaurant of your choice. But you have to mention this blog post to get the gift certificate!
I only have a limited amount of spots available and I will soon be opening up this offer to the general public. Once my appointments are all filled, the gift certificate offer will end, so act now to secure your appointment (and your gift certificate!).
Time To Straighten Up Your Financial Accounts
It’s not uncommon to accumulate things over the years, without taking time to straighten them out periodically. That applies to our finances as well as to our possessions. How many credit cards do you carry? How many stocks and bonds, brokerage accounts, mutual funds, and RRSPs or RRIFs do you own? It’s not just a matter of finding time to keep track of all these different financial assets. Often, these assets are acquired without a clear-cut strategy, so you may own assets with similar investment objectives or that are not compatible with your financial goals. If you feel it’s time to straighten out your finances, consider these steps:
- Make a list of all your assets and debts. List each one individually, so you have a sense of how many different accounts you’re dealing with.
- Go through each one of your investments. Make sure you understand why you own each one. Are you really adding diversification to your portfolio or do you have overlapping investments? Assess the prospects of each investment and decide whether you should continue to own it.
- Look for ways to consolidate accounts. Try to get down to one bank account, one brokerage account, and one RRSP. This can significantly reduce the time needed to review and reconcile accounts.
- Assess your outstanding debts. Do you really need all those credit cards? Consider keeping only one or two cards, so it’ll be easier to monitor balances. Look for ways to reduce the cost of your borrowing. Is it time to take another look at refinancing your mortgage?
Modified from a post from financial-topics.com. For the original post, click here http://www.financial-topics.com/37020/e_article001557073.cfm?x=bg90W4s,bgjH7Mb7.
