Most people think that if they have a Will, they have an estate plan. Alas, this is not the case. Although an important building block, a Will is one dimensional—it simply facilitates the distribution of your assets to the next generation. It is not a tax plan, nor does it offer any bloodline protection. Unlike a trust, a Will comes with the following drawbacks:
Individual banks and financial institutions do not have the capability or the authority to validate or verify Wills. Because of this, your estate will go through the process of probate after your passing. Probate is the means by which your Will and the appointment of your executor are legally confirmed. The entire process can take more than a year, resulting in substantial fees and complex legal procedures.
After your passing and before your assets are distributed, any outstanding debts must be resolved. This includes tax on capital gains and tax-sheltered savings plans. Capital gains may include things like investments and properties other than your primary home. Any assets you wish to be transferred will need to be used against these taxes.
A Will is more likely to be challenged than a Trust. Trusts rarely are challenged because their details are not public. Additionally, the rules for challenging Wills are established, while there is less law in relation to the challenge of Trusts.
If your net-worth is more than a million dollars, you may have outgrown a Will, and should consider the more sophisticated methods that trust planning affords. Trusts are not as expensive or complicated as you may think – especially if you have the multi-disciplinary team at MacMillan Estate Planning at the helm.
Want to know more? Please join us at an upcoming seminar or take advantage of our complimentary consultation service. For more information, please call 1-604-266-6464 or visit www.macmillanestate.com.