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Family Benefits from Current Will
by Peter Bergman, Planned Giving Officer
The Salvation Army
Many people avoid thinking about a will because it reminds them that life does not carry on forever. Since we know this to be an inevitable fact, it is best to be prepared for it. Once estate planning is completed, we can relax, and enjoy
the peace of mind that comes from having our affairs in order. You are better off developing your own plan rather than letting the courts take charge of your affairs.
Guardianship
When you make a will, you can select individuals who have similar values, child rearing approaches and background as you do. This is important because the courts may not give consideration to the issues that are important to you.
Tax Planning
Canada Revenue Agency deems that the moment before a person's death they have sold all their property. This includes cashing in RRSP; only a spouse can transfer these tax-free into her or his account. Most people will pay more tax in the year of death than any year during their lifetime. Minimizing taxes leaves more for the beneficiaries in your will.
Trust Funds
The standard procedure in cases of intestacy, that is, dying without a will, means children will receive their entire inheritance when they reach the age of majority. Setting up creative trust funds for children will help preserve capital and increase the total amount children receive.
Intestacy Spouse's Share $50,000 Plus.
- If spouse and no children, then all to spouse
- If spouse and 1 child, spouse's share is distributed and the remainder is split 50/50
- If spouse and more than 1 child, the spouse's share is assigned and the remainder split 1/3 to spouse and 2/3 to all living children equally
- If you don't have a will administrative costs will be higher and distribution of assets will be delayed
Bequest to Charity
Without a will a bequest to charity cannot be used to reduce taxes payable. In the year of death you can give as much as 100% of income to charity and, if you give more than that, the surplus can be used to reduce taxes in the year preceding death.
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