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Josh Sheluk: Alright. Hello, everyone. Thanks for coming out today. We really appreciate it. For those of you don’t don’t know me, I’m Josh Sheluk.

I’m a portfolio manager and chief investment officer with Verecan. And I have the the higher more volume? More volume? I don’t know where it is. Maybe one of my And maybe I’ll yell or get closer to the mic.

I have the responsibility to introduce everyone today. I usually like to have a little bit of fun with this. I’ve given

Colin White: Is that helping?

Josh Sheluk: I don’t know. Okay. I think I sound like a robot now. I have the responsibility to introduce everyone today. And I like to usually have a little bit of fun with this, so I’ve given everyone from the team a nickname of my choosing when I’ve introduced them.

And I’ll just wait until we try to figure out the audio here. Is that better? Is that better? Better, better, Okay. Alright.

So just to introduce everyone from the team, to the right here in the white, we have Katrina, the Queen of Style Cooke. Raj, I’m not sure where Raj is at the back there. Raj, we call her the boss, Vaidya. Arlene, the poet, Purpura, over there to the back left. Devin in the middle, scrum half, Cattelan.

And you can ask everyone about these nicknames after. There is a real thought to them. So there is something there. Jack Where are you, Jack? Jack, Jack, Jack.

I don’t know where Jack went. Jack We call him the Math Wiz win. Tolu, he’s got the best nickname. Mashed potatoes. Adepoju.

Amanda Slugger Smart, she’s at the back there. Slugger. Steve Green Egg Sparrow. The front right here. Dylan Leather Free Wilson, back right.

Corbin I had called him Too Tall, but I think what I should be calling him is Miss the Gimmies. Footitt. He’ll explain what that means. Diandra, the journalist Camilleri. Shawna Minnie Mouse Young up here in the front.

And Colin Santa Claus White. Now, we’re also joined here by Jonathan Hooper today. Jonathan’s a partner at Tupman and Associates. And sorry, I definitely didn’t get that right. Tupman and Bloom LLP.

So actually, Jonathan did a presentation with Colin in our Halifax office. Testing, testing, testing, testing. Testing, testing. So Jonathan did a presentation with Colin in our Nova Scotia offices for our clients out there a couple weeks ago. And we thought he was so awesome.

We made him fly to Ontario, to Toronto to do the presentation here. Catherine even said that he is the best lawyer that she’s ever met from a personal level, not necessarily on the professional side. So high praise for Jonathan. We’re happy to have him here. He’s got a lot of great insights that he can share.

He is a specialist in estate planning. This is his focus as a lawyer. And not only in estate planning, writing wills, writing powers of attorney, things like that, but also on the litigation side. So he’s there when things go well to make sure things go well, but he’s also there when things go poorly to try to clean up the mess. So he’s got a lot of great insights that he’ll be able to share today.

Before we really get started with the presentation, I just wanted to highlight one story that I saw yesterday. This was in the news yesterday, and I think it highlights why estate planning is so important. So I’m gonna give you a really, really succinct version of this because I know Colin and Jonathan have all kinds of great stories to share. But this is a woman who passed away. She wanted the cottage to be inherited by her three children.

So in her will, she said to her three children, she said, you can either inherit one third of the cottage or you can get $5,000. So door a, a third of a cottage. Door b, $5,000. What do you think they would want? Obviously, financially, the cottage is gonna be way better.

So fast forward to today, these three siblings are in court. All three of them said, yeah, I’ll take one third of the cottage for sure. One of them wanted to live in the cottage, So that one sibling had lived in the cottage for an extended period of time. She took care of all the maintenance, all the the costs, etcetera, etcetera. Now the other two wanna sell the cottage.

It’s her house. So she said, okay. Well, I’m not gonna let you sell the cottage. It’s my house, but I’ll give you $5,000 because that’s that’s what was in the will. Now they’re in court.

I’ve never I I don’t know that there’s another topic in wealth that it’s so easy to do it well, and the stakes are so bad if you do it poorly. And here’s a situation where probably it was a pretty stupid will in the first place, but also there definitely wasn’t communication amongst the different parties to make sure that that this all made sense, way that it was laid out and structured. So your your costs of doing it were small amount of time, small amount of effort, small amount of money. Now the stakes of getting it wrong are a divided family in court suing each other. And for the record, the court has said, sure, you have to sell the house, you have to sell the cottage now, and there’s gonna be an uneven split in the proceeds of the cottage.

And the court said, you guys figure it out how you split it up. How do you think that’s gonna go? I’m gonna pass it off to Colin, and as usual, we’ll start with some good news.

Colin White: Thanks, Josh. I think it’s really important for a day where we’re gonna talk about litigation and death and dying to start with some good news. It is our thing. We talk about good news because there’s not enough good news talked about in the world. So as usual, Catherine has scoured the Internet for some good news you haven’t heard, and we’re gonna shine a light on it today.

So the first one, and this is actually Kathryn also getting me to talk about something she wants me to talk about. There was actually a situation where there was a a conductor, a a world famous conductor, who began to suffer from Parkinson’s. Now Parkinson’s is a very debilitating disease and makes conducting very difficult because it affects all those fine motor skills.

Josh Sheluk: Speak louder. Sorry?

Colin White: Is that that better? Test. Test. Test. Okay.

Sorry. So what they did, and this is one of those little improvements that happened with time that we don’t necessarily hear about because it’s not a eureka. They didn’t cure him, but they were successfully able to plant a pacemaker in his brain to control the symptoms of Parkinson’s and allow him to assume his duties as a conductor again. Now, again, that’s one of those little improvements that happened in one particular case, but it’s where the technology is going and can give hope now for people who are suffering from Parkinson’s and other diseases of the brain. If we have pacemakers for the brain, anything is possible.

So that’s good news. More good news, and this one is sorry. The point in bringing this up is I’m actually conducting a symphony orchestra in two and Catherine is threatening to videotape it, and it’s going to be funny because I don’t know what I’m doing. So stay tuned. There’s gonna be a funny video is gonna come out at some point.

The second one, and this is funny, we like measuring things. People in the financial world, we like to come up with ways to measure things. So, like, there’s you probably heard of the Big Mac Index. Right? So there’s different ways that we use different things to measure something that’s kind of associated.

Well, there is the lost wallet test. For the last thirteen years, there’s been an organization that tracks the global returning of wallets. They ask people in different countries, how likely is it that if you lost your wallet full of money that you would expect to have it returned? They’ve discovered there’s a correlation between how optimistic people are about getting their wallet back to the overall happiness in the country. I’m happy to report that in many parts of the world, the happiness index went up this year.

More people are more confident that they would get their wallet back. Number one in the world is Finland. And I’m surprised for the first time ever, Mexico has broken the top 10. So Mexican is the tenth happiest country in the world when it comes to expecting your wallet to be returned. Now in associated news, The US is twenty fourth dead last, the worst number ever recorded.

So it seems to be pretty accurate, seems to be pretty on point. So I’m gonna take a break because you have the the the the very big pleasure of having our chief investment officer explain everything to do with the markets over the last three months. He’s gonna do it in four slides, and he’ll be able to answer any of your questions. So, Josh, are you ready to to is it par too high?

Josh Sheluk: I’m gonna rip through the market stuff because, really, all of this is old news by now. A lot of what we’ve been talking about over the the past couple months is is pretty old news. But what we’re seeing in markets, okay, I think everyone knows there’s a dip in markets mostly in April, but maybe everybody doesn’t know by now because I was speaking with somebody earlier scared to open their May statement. Markets have basically fully recovered everything since May. Okay?

So what started as a not so good of a year, March, not so good, April, not so good, May, really good. And where we are today on stock markets, both in Canada and globally, and bond markets is is relatively flat on the year. So the two big dips in this chart here, those are Canadian and global bonds or stocks rather, Canadian and global Canadian and US stocks. I should know my own slides. And the line there that’s relatively flat, that’s Canadian bonds.

So, couple things to highlight. As always, market stocks are volatile. This time, it was tariffs. Next time, it’s gonna be something different. Before, it was inflation.

Before that, it was a pandemic. There’s always something. There’s always something to cause uncertainty. There’s always something to cause volatility. Markets go up over time.

They do recover. They have recovered now. I don’t know that this is the recovery that’s going to continue forever, but we’re in a pretty good spot. And as usual, bonds continue to be a pretty good, diverse fire when stock markets go down. Bonds hold up pretty well.

Now, April was a trying month for a lot of people. And I know I received some calls. People were were pretty level headed during the month of April, but it was definitely challenging when you opened up your news feed every day and saw tariffs are this. Oh, no. Actually, are less than that.

Oh, no. Actually, tariffs are gonna double tomorrow. Oh, no. Actually, tariffs are gonna change on these three countries, but they’re gonna increase on these other three countries. So it was a crazy, chaotic month for all kinds of reasons, mostly tariff related and mostly news related.

On this chart, it’s just a daily review of what happened through the month of April. Green bars equals good. Red bars equals not good. We had a very volatile month and so volatile, in fact, that we had that green day there where the market shot way up. That was one of the best days that we’ve ever had on stock markets.

Now, that also was preceded by some of the most challenging days that we’ve had in a long time in stock markets, but the point is all of these days are clustered together, and if anybody here can tell me what day is gonna do what, please raise your hand because we’d love to hire you. We’ll pay you a lot of money. We have no ability to figure out what’s going on from one day to the next in this regard, and I don’t think that we ever will. We won’t. I can say that quite convincingly.

So what we try to do is build a portfolio that’s going to be resilient through all of this stuff because we know it’s gonna happen. Again, next time is gonna be something different. We don’t know exactly what it’s gonna be. But we build a portfolio that’s going to be resilient through all of this so we can I don’t wanna say ignore it, but at least it allows us to be patient through these periods of time? Now tariffs are the thing, the topic, right?

So you don’t need to know exactly what this graph or these numbers are showing here, but the dark line here, the black line, is The US tariff rate over the last two hundred some odd years. It was, up until about, what, seven weeks ago, really as low as it’s ever been. Close to zero. At pretty much every other time in history, going back to the last, you know, thirty some odd years, tariffs have been in place and they’ve been much higher than they have been over the last few decades. Now that’s not really what’s interesting with this graph, in my opinion.

What’s interesting with this graph is the red line, the red dotted line, and the green dotted line. And again, the values Don’t pay too much attention to the values here. But the red dotted line is what the tariff rate would be estimated based off of the tariffs as of this day that this graph was produced, is May 12. So obviously that’s changed a lot and I don’t know what’s I haven’t looked at the news in the last thirty minutes, so I don’t know how it’s different from where we did here. But the green line is what they estimate as the post substitution tariff rate.

Again, values don’t worry about the values. What’s interesting there is people will substitute and make changes to their behaviors. Businesses will substitute and make changes to their behaviors in the event of tariffs. So if something today that you buy on a regular basis is 10% more expensive, you don’t say, Ah, you know, that sucks. I guess I gotta pay 10% more.

If chicken goes up 10% in price, you’re gonna look at beef. If beef goes up 20% in price, you’re gonna look at pork. People are active, businesses are active at looking for other opportunities to substitute away from goods that they buy. Most things have a substitute for themselves. The other thing is businesses are going to adapt through all kinds of ways.

Instead of importing from China, they’re gonna import from Vietnam. Instead of importing from Vietnam, they’re gonna import from Canada or The UK. So what this is to say is all of this stuff is dynamic. We can say that tariffs are 20% today, and that’s gonna increase the price of goods by 20% on everything. That’s just not gonna happen because businesses are dynamic.

They’re always changing. Consumers, people like us, we’re dynamic, we’re always changing, we’re always trying to adjust what we do to optimize our lives. Tariffs, it’s been in the news, we’ve been talking about it for months now it seems, but it’s actually not the biggest thing right now. I think bigger than tariffs and what the tariff rate is at any given point in time, bigger than that is the uncertainty that tariffs have caused. Because uncertainty is causing paralysis, it’s causing people to defer purchases.

It’s causing businesses to defer purchases, defer hiring, and that’s gonna be a bigger issue, and we don’t know exactly what the effect of that is gonna be yet. It’s definitely something. Is it material enough for us to really worry about over the next couple years? It’s hard to say. I’m gonna pass it off to Jonathan here, but does anyone have market related questions that they wanna ask now?

Feel free to ask questions at any time throughout the presentation and we will have some time for questions at the end.

Jonathan Hooper: Thank you. All right. So, it’s titled estate planning pitfalls. But we’re going to cover a lot of ground in a short amount of time today. We’re going to look at state planning, setting things up.

We’re going to look at the different tools that you can use. We’re going to look at different scenarios, different examples. And we’re going look at, well, how can this also go wrong? Because that’s really important. So, we’re going to look at first, we’re gonna define our term.

What is estate planning? Okay? It’s setting up the necessary legal and financial documents to ensure that what you have, when you die, goes to who you want it to. It’s a pretty simple concept. What you have, goes to who you want it to go to.

And the other thing to keep in mind here is making sure that there are people in place to make your financial and medical decisions for you if you’re alive but are unable to do so. So that’s the second part of this, which is you can do some planning that if something were to happen to you when you’re alive, there are people in place to handle your affairs that you trust in order to make sure that things go the way you want. Right. Estate planning. This is the outline of what we’re going talk about.

We’re going to look at wills. We’re going to look at using tools other than wills. We’re going look at powers of attorney. We’re gonna look at powers of attorney for medical care or personal directives for medical care. We’re gonna look at how it can all go wrong.

We’re gonna end with why do I need a lawyer to help me with all of this? First, wills. What is it? A will is a legal document that may do a number of the following things. It can appoint an executor to manage your assets when you die.

That’s a must. It appoints beneficiaries to receive your assets after you die. Who gets to have what you have? And what are they? Is it family?

Is it pets? Is it charities? Who gets what you have? Another one is that it can articulate final wishes that you have. Do you have any specific wishes relating to your belongings or relating to what you have that you want to be known?

It can appoint guardians for minor children. Now, that might not apply to everybody in this room, but for some people, what do you do if you die and you have children? It also may appoint beneficiaries for some of your investments, Tax free savings accounts, RRSPs, life insurance, different types of investments. A will can direct who gets those. Although it is a little bit fraud if you do it in your will, and we’ll talk about that later.

And finally, you can do things like setting up trusts for your family as a legacy. You want to leave money to go to your children, grandchildren, future generations. You can look at doing that inside a will. All of that is something that you can do in one document. So, a will is not just a piece of paper that you throw some names on.

It’s one that you need to give thought to in order to make sure that what you have goes to who you want. Now, a few things about a will. It only becomes effective after you die. So, there might be a lot of people who get really excited when they see a parent’s will and then they look at their parent’s bank account and go,

Colin White: Oh,

Jonathan Hooper: that’s gonna be mine. Well, it’s not. A will is a legal document, but it only becomes effective when somebody dies. While you’re alive, it does not mean anything to the people named in that document. You cannot get one if you lose your mental capacity.

So, you have a medical diagnosis or you’re unconscious or you’re unable to articulate what you want in a discernible way, you can’t get one. The end. So, it’s something you need in advance before, well, you can give some thought to it. You can also do really interesting things like if you have children with disabilities or if you have someone you want to give money to with disabilities, you can use tools such as a Henson Trust, which makes sure that the money you give them does not jeopardize the government benefits that they receive. One of the things to note here is that in order to qualify for disability benefits, the government will look at your assets.

And if you give somebody money as an outright gift, that’s an asset that that person has and that can be taken into account to diminish or even withdraw government funds. There is a way to leave money where the only money that that person gets is what’s actually given to them from a trustee. But anyways, that’s another discussion maybe for another day. But it’s a great tool if you are gonna give someone money, who has a disability. And another thing about Will is you can leave explicit instructions on how you want things to go when you die.

What I always say, this is the last gift you can leave your family. If your house is in order and there is a smooth transition from what you have to the people you love, that is the best gift you can give people who are a) grieving b) in shock because it usually doesn’t happen with lots of runway and C) It’s a way that you can make sure that you’re taking care of those who you love and that they don’t deal with surprises when they’re in grief and in shock. So, having a will and an estate plan in place is really important. I always get this. What if you die without a will?

Okay. Well, that’s okay. There is provision here. In Ontario, you have the Succession Law Reform Act. Alright?

It mandates things like who can administer your estate? So, it says this person can be executor. Now, what you need to know is it doesn’t appoint them. So, it’s not like you are now the executor. You may go ahead and administer the estate.

They have to apply to the court for permission. And there’s a list of priorities of who can apply in order to do this job. And it’s not something that happens automatically. It’s actually something that happens that you have to apply to do. It also states who the beneficiaries are and how much they get.

So, it’s not up to whoever the executor is now. And it’s not up to you anymore. It’s up to the government legislation that says these are the people who are the beneficiaries and this is how much they get. There’s no discretion. There is no wiggle room.

That’s how it goes. And finally, it almost always requires going through the probate process, which is a court monitored process for ensuring that estates are administered in an ethical way and in a transparent way. But it does slow things down and it does make sure that there are delays in getting the things that you want to the people you love. There’s estate planning tools without a will. When I talk to clients, I always make a distinction.

I say there’s what we call inside your estate and outside your estate. And here’s the difference. Inside your estate is everything your will governs. And we’ve already covered. Your will can do quite a lot.

Outside of your estate is everything else. And here’s some good examples. If you have joint ownership, you can pass property to the joint owner by operation of law very quickly and efficiently. Now, the caveat here is that’s for spouses. If you have joint ownership with a non spouse it gets real complicated real fast.

The other one is registered investments in life insurance. It’s something you can designate a beneficiary to, again such as a tax free savings account, RRSP, goes directly to that person on death. The one thing to know about that, particularly with a registered investment like an RRSP, is the gross amount of that goes to the beneficiary but your estate pays the tax. Whatever the deferred capital gains tax is in that investment, your estate pays it, not the beneficiary. Finally, things like trusts and companies.

There are ways that you can own things that aren’t in your name. If you’re a business owner, you set up an incorporated company, you own shares in that company, your estate may own the shares but it doesn’t own the company. The same thing with a trust. A trust can own certain properties, certain shares. There are many different ways that you can own things that aren’t directly.

That will affect your estate and that’s why you need to coordinate to make sure that what you have goes to who you love. Because your will might not touch any of these things. Now let’s look at joint ownership. This by far is one of the simplest things to do but the effect of this can be the most costly. In my litigation practice, which is growing very rapidly, joint ownership of land and bank accounts, particularly bank accounts, is one of the number one things that is fought over.

So when you look at land, you can own land in two different ways primarily. In Canada there’s really two ways a person can own land. There’s joint tenancy and tenancy in common. And this is what they are. Joint tenancy means that you can have as many owners as you want but they all own 100%.

So what that looks like is this. Let’s say you have five owners. They are all named owners but as they die, their interest is extinguished so that they don’t pass that on to their estate. So as they die there just become fewer and fewer owners of the whole and when you get to the end the last survivor gets the whole thing. That’s joint ownership with what’s commonly known as right of survivorship.

The other way is called tenancy in common. This is where you actually split up the ownership pie. If you have five owners, they each own a one fifth interest and they can sell that one fifth interest or transfer it to their kids. They can deal with their interests separately from the other owners. If they die, their will can say, my interest in, for example, as you heard today, the family cottage goes to my kids.

So you can split that pie up even more and make that family cottage ownership even more interesting. If it’s tenancy in common, or sorry if it’s joint tenancy and you own it and you die, your name simply gets off. And you no longer have an ownership interest in that real estate. There are some exceptions but that’s the general rule. Now there are tax considerations to ownership.

Particularly joint tenancy that you need to consider. If you are owning a principal residence where you live with a spouse, no problem. But as soon as you add additional real estate onto that, you are going to be paying capital gains tax on that ownership. So, it’s a family cottage or a rental property or maybe it’s a condo in the city and you live outside of the city somewhere. If you own a second piece of real estate that is not your principal residence, on your death, you will pay capital gains tax.

Well, there’s actually a couple of ways that capital gains tax is triggered. The most common are when you die or when you sell the property or you lose your ownership interest in the property. And so capital gains tax is not something you pay every year. It’s tax that’s paid when it’s triggered. And usually, like I said, it’s triggered on death or sale of the property.

You are responsible for declaring this. This is not something CRA comes and says, now that you have sold your piece of real estate, you must pay this capital gains tax. But if you fail to pay it when you should, there are penalties in interest. And so for example, if someone wants to give their family cottage to their children and they simply go to a lawyer and say, I just want to add my kids as all owners on the property. Christmas!

And they do that. They have just triggered a whole lot of capital gains tax usually on a gift to their children. Because CRA says it doesn’t matter whether you sold it for fair market value or not, when you dispose of your real estate you’re deemed to have sold it for fair market value. So, if you bought it for $20,000 and that cottage is now worth $200,000 you’re paying capital gains tax on $180,000 So, passing on real estate and ownership is incredibly important for your estate plan to know not just who you want it to go to but what are the consequences of adding owners and when. Now, accounts, there are huge issues with respect to this.

If you are joint on a bank account with your spouse, absolutely fine. Very simple. One spouse dies, other spouse is the owner. It gets really murky when you start to add other people onto a bank account. Because the law has since at least 2008 been crystal clear.

If you are a non spouse and you’re joint on a bank account with somebody else could be your mom, be your brother, be your sister, could be anyone and that person dies, you’re holding that money in trust for that person’s estate. It is not yours. So the law has been real clear on this. Now, if you go to a financial institution they might give you a different story. Hey, guess what?

You’re named on a joint bank account. It’s a little box ticked here that says Right of Survivorship. That bank account is yours now. Well, that might be what the bank account form says but that’s not what the law says. And so that’s where we get into some real complicated situations.

I’ll give you an example. Actually it’s about ten years ago now. I had someone, a client come to me and said something wrong happened. I said okay, well tell me what happened. They said listen, a relative of mine was passing away.

What happened is the executor went to them in the hospital and said you’ve got this investment account. You know what, it’s only in your name. You should add me onto that bank account so that it doesn’t need to go through probate. We’ll talk about probate a little later. They said look we’re going save in probate fees, add me onto that account and trust me I will make sure it goes to the beneficiaries.

And you want to know what happened? That person was added on that bank account, they died and then that person said you know what the bank says it’s mine it must be. I just got a windfall of $3,000,000. Well, the law disagreed and the other beneficiaries disagreed and several $100,000 in legal fees and litigation later turns out that the deceased person did something really wise. On the bank account record itself they hand wrote a little note that said I want this account proceeds to go to my beneficiaries.

It is not a gift to the executor. Well, that changed the tune quite quickly when that came out. But that’s actually what the law says. The law says if you’re a joint owner on a bank account, particularly if it’s not yours and it’s not a spouse, the law says even if you’re the named person on it, it’s not yours, it’s the estate’s. So again, joint bank accounts are a very important thing when you’re alive but you need to understand the consequences of them when you die.

Another joint ownership and this is a real quick one is motor vehicles. If you have a spouse or you have a partner who you share a vehicle with it takes very little time to add them as joint owner But it can be a real pain after one person dies to have to stand in line to try to get the vehicle transferred over to another person. And it’s probably the last thing you want to do. So, joint ownership of vehicles is one thing you can add, particularly if you know who you want it to go to and that you can set in place as soon as you purchase investments. These are again things that are outside of your will or can be outside of your will outside of your estate.

So, tax free savings accounts are really unique investment option. I’m not gonna try to sell you on them but I’m gonna say you can do one of two things. Tax free savings account can have a beneficiary which is like all the other registered investments or if you have a spouse you can designate what’s called a successor holder. Sometimes it’s called a successor annuitant. What that means is if you have a spouse, you can either appoint them as a beneficiary which means that it would be paid out to that person on death.

But if it’s a successor holder that means that that person can actually keep that tax free savings account intact and have that along with their own. Now they can’t contribute to it. But it means the survivor can keep their spouse’s tax free savings account in the way that it is. Which might be a great idea. So that if it gets paid out it immediately then needs to it can be invested and becomes taxable again.

But it’s a vehicle you can use to keep it in a non taxable form. RRSPs and RIFs, again these are great investment tools but you can then designate a beneficiary and in some cases alternate beneficiaries which is really advisable when you can. Life insurance is a fantastic one because it’s something that you can pay out on death and it gets paid immediately and it’s tax free. I’m not here to sell you on life insurance, I’m just saying usually it’s a tool in the toolbox for estate planning that makes sense for some people. And finally another form of investment you can give to somebody is a pension benefit.

These are becoming a little less common now but there are survivor pension benefits out there where it can go to a spouse or children. So another one here is trusts. Trusts are a way that you can own something in a way that’s not directly with you. It’s an arm’s length form of ownership. You can do something creating a family trust and this is a way that you can leave a legacy or own something that will be that your death will not affect.

Or at least won’t directly affect in the same way it would if you own it directly. I’ll give you an example. If you have a family trust own for example the family cottage. When you die your death doesn’t trigger capital gains tax on cottage. There can be fluidity of who can use that family cottage and who’s in charge of it.

You can keep it in the family but it is a bit of a complicated structure and it does cost money and there is there are consequences of not having it in your own name. But that’s all conversation you need to have when you’re doing your estate plan. You can use family businesses. What do you do with a family business? There’s usually, especially if it’s incorporated, where do you take the shares?

Who gets them? Do you need to sell them? How do you deal with that? There can be spousal trusts. This is usually important if there’s blended families or subsequent spouses or partners.

You want to provide for them but you also want to provide for children of a previous relationship. How do you do that? That’s one way. And if you’re over 65 and you want to either avoid probate or leave things in a way that is going to be a really quick gift and you do it wisely, you can use an alter ego joint partner trust. That might work for you.

It might not but it’s a conversation worth having. So, as you can see there’s a lot of different things that you can use and think about around estate planning when you die. And also there’s when you’re alive. So, there’s powers of attorney. And just very briefly, this delegates the financial decision making to one or more people or it can be a trust company or professional trustee.

It’s the power to do banking, file your taxes, obtain loans, pay your bills. Anything you can do with your money in real estate, someone acting under a power of attorney can do in your place. Now, there are two different ways that these work. They can either become effective immediately when you sign it and that other person can go and do or they can be effective only on your incapacity. So you can actually have this parked and say this will only become effective if a doctor writes a note saying I’m unable to manage my finances.

That way it cannot be used unless or until that happens. And the ones I do it also says or I write note saying I want it to be effective of today’s date. And that’s usually when people are elderly, they’re of sound mind but they just don’t want to do the legwork of their own banking. Now the biggest thing with these is you must trust the person or people who you appoint because there is abuse. There is too many stories that I have of people who say, Look, they’re my kid.

I trust them. Or, This is the person. They’re around most of the time. They visit me most often. They asked me if they could do this.

I felt obligated to say yes. I have been representing people who have been either taken advantage of by the person they’ve appointed or the children of a deceased person who appointed someone who came from out of the blue took all their money and left their kids with nothing. So the moral of this or at least the takeaway for this is you can have a great estate plan. But one of the ways it can go wrong is appoint the wrong power of attorney. Because they could mess with your finances and ruin a great estate plan.

And there’s also a power of attorney for personal care. So this delegates a person to make medical and personal care decisions for you. So this does include medical in terms of a doctor in emergency situation but it’s a broader power than that. It includes things like where you will live. Are you going to live if you’re not able to articulate it, are you going to live in your own home or are you going to live in a care facility?

If you are going to live not in your own home, what type of care facility are you going to live in? Are you going to live in a really, really expensive one or in a bargain basement provincial one? And who can see you and has access to you? And this can be really controversial because this power means if you are somewhere someone can deny access to you for your family. An example here was there was a situation where somebody was an estranged child.

They moved back when they found out a parent was ill. They took steps to alienate the other children by sort of locking the door, telling them they didn’t want to see them over a period of time. And when this person was in hospital and in a care facility, they told the staff the other kids cannot see mom. Can’t do it. You’re on a no visit list.

And they had the legal authority to do it. So again, when you appoint somebody to make these decisions, they have to be someone you trust. They have to be someone who you know would do what you would want them to do. Now, we’ve already kind of discussed this but how can it all go wrong? Trusting your kids will sort it out themselves.

If you just leave it up to your kids or leave it up to whoever your beneficiaries are, whoever the next generation is, I guarantee you if they don’t have explicit written guidance, they’re going to disagree. And that disagreement, especially if they have a financial stake in those decisions, is going to lead to disputes. Blended families. It’s very common for blended families to exist. They can be planned for.

If you don’t plan for it, there can be unintended consequences that can cause real grudges. Subsequent partners. Do you want to provide for a subsequent partner? If so, to what degree? What tool do you use?

And right there on the far left cottages, we’ve already been talking about that. What do you do with a cottage? And I’ll give you an example. It’s very very common for someone to come and say listen, have a family cottage, I have three kids. I want them all to continue to use it just the way they do right now.

I say, Great. Okay. First, who’s going to own it? Well, want them all to own it because I want them to have responsibility. I want them to all feel fine.

I want them all to have that ownership stake. I say, Great. Here are some questions for you. Who’s paying the property taxes? Who’s paying the insurance?

Who’s going to cover the maintenance costs when the roof needs to be replaced? Who gets to use it Canada Day weekend? Who’s going to use it the long weekend in August? Who decides who gets to use it? What happens if people want to use it at the same time?

How long do they get to use it? Do they all have to use it for three months a year or four months a year? What if someone only wants to use it for one weekend a year? Do they still have to pay one third of the property taxes? All of that is really, really important for determining who you give a cottage to.

How it’s used. I’ve actually had a situation where I attached an ownership agreement to a will. And the condition was you can have your ownership stake in the cottage but you have to sign this ownership agreement as it is. And it set out who paid for what, how you would decide who would use it and when, and who had the right to buy their ownership stake if they didn’t have it. So it made it crystal clear.

Now that takes planning, that takes thought and yes it is a little bit more expensive. But it meant something for this person to give their cottage to the people they wanted to have it. And it wasn’t just left up to wasn’t just left up to them. Another one, what happens when assets cannot be divided equally? If you own a business and you have one of two children who’s really involved in that business and they expect that they will have that business after you pass away.

The other child expects to have 50% cash from that business after you die. You have a problem. There are ways that you can deal with that. But if you just say, I want both of my kids to have 50% of my assets and by the way the one who has been working with me in the business gets all the shares in the business. That’s a recipe for a dispute.

Kids you don’t want to give anything to when you die. What happens if you say, Look, I haven’t talked to this person in years. I don’t want them to have anything. Well, sure. There is a way that you can do that.

Now there is legislation in every province that deals with people who are excluded from wills. In Ontario it’s a very narrow one. You are able to exclude people. And you’re able to do it fairly simply and there isn’t much of a recourse for someone who’s been excluded. But you need to do it thoughtfully.

You need to make sure you’re doing it in a way that isn’t exposing your estate to litigation. And finally on this list, capital gains tax that eats up more than you anticipate. Again, for real estate. If you have a real estate portfolio outside of your own home and you own it in your name. Investments that have been sitting there for years, RRSPs, tax free savings accounts, all of those type of tax free savings accounts you’re not going to have a capital gains tax on.

But any investment you have that’s had deferred tax for a long period of time, you’re going to have to pay that or your estate is going to have to pay that when you pass away. And like I said, if you’re planning on equal division of things between for example children, some people used to go hey look, I’m going give one kid my RRSP and the other kid gets my savings account. Well, you have no idea what those two investments are going to do in the meantime. And by the way the kid with the savings account that’s in your estate is paying the tax on the RRSP that’s outside of your estate. So unless you plan for that it’s going to have an unintended consequence of the person who gets one part of the savings is paying the tax on the person who gets another part of your estate.

So why do I need a lawyer? Well, you don’t know what you don’t know. What I mean by that is there are so many different situations that you can go I assume that it’s going to go this way or I would like it to go this way. But there are many ways that either A) if it’s not planned for it won’t go that way or B) it can be derailed. And so you need to give thoughtful consideration to is this going to happen the way I want it to?

And if not, what can I do about it? And the other one is, legal advice is important to understand what your options are. If you don’t know, if you, for example with the cottage situation, if you go to an unskilled person, they will say something like, Sure, I’m just gonna put all your kids on the deed, done, register, off you go. Happy days. No idea of what that meant.

Was there a deemed disposition of capital gains or was there a capital gains tax that was triggered for anyone? Was there who’s going to pay for ownership? Again with joint ownership, I had this one actually come up and it was with a cottage. A was sorry, a mother was going to surprise her kids with ownership in the cottage for Christmas. And she had her deed all set out and it was drafted and it was all ready to go but before it was registered, turned out that the lawyer who did the search found that one of her kids had a registered judgment debt against them.

So, what can happen with that is, the debtor, or sorry the creditor of that child could then enforce that debt against the cottage if they registered it. They could go, you have an unpaid debt, You owe us this money. We’re going to sell the cottage and get our owner, we’re going get our debt paid from the sale of the cottage. Boy was that a surprise for that mom. Was it because the son didn’t tell her?

But it was also a surprise for her to know that that gift wasn’t protected. So real estate like that is not protected from, unless you make plans, from creditors or spousal or relationship breakdowns. All of those things are things you need to have in consideration when you’re looking at how you own things. And that’s where legal advice comes into it. There are lots of ways that you can go hey, a will is a real simple document.

You just fill it out, put some names in there, right? Well sure, that might be at the end of the day what it looks like But it’s the conversation you have and the discussion you have with the lawyer you’re working with that is going to decide is this really going to do what I want it to do? Do I have to do more? Is there something else that I should be thinking about? Or does change my mind in how I give something given the tax considerations or given the ownership changes that are going to take place?

So all of this leads to the fact that why do I need a lawyer? Because you need to be able to know what your options are. And believe me upfront, it is so much more cost effective to get those options now than to have all of the beneficiaries talk to one or more lawyers to give them options after you pass away and those options not be great. Alright, back to Colin on that cheery note.

Colin White: Thanks Jonathan. Alright, let’s try to cheer it up a little bit. Let’s talk about talking about money. This isn’t gonna cheer it up. So when you’re actually drafting a will, legal advice is absolutely essential.

But there’s a long process towards talking with your family about money to make sure that what you’re trying to accomplish lines up with the family. So there’s a whole bunch, and we spend a lot of time talking with clients about how to talk about money and trying to bring families together. So there’s a fear of bad outcomes. There’s a fear of being misunderstood. There’s a lot of fear about what people have concerns for in their estates.

But I’ll give you there’s all kinds of examples that we can give, and I’ll try to give a different example for each slide. We’ll talk to the parents, and the parents will say, listen. It’s really important that the cottage stays in the family. There’s a lot of family memories there. It’s really, really important that we keep this property in in the family.

It’s really, really important. It’s a cornerstone of the whole well. When you talk to the kids, the kids are going, oh, no. Like, I I live in another country. Like, we’re never gonna be back there, and, you know, we really don’t have any interest in trying to maintain it.

But they never spoke to each other. So the parent is sitting in a room where this is absolutely essential and they’re changing how they’re spending and they’re changing everything to try to accomplish a goal that if they ever just brought it up with their family, it’s not necessary. Alright? So they’re they’re putting themselves through a lot of pain over something that’s just not important to the next generation. And it doesn’t have to be mean spirited.

The difficulty with the family is that it it gets very emotional. You know, again, as a parent, having kids, they’re fully formed into individuals. They have families. They’ve got priorities. They’re gonna live their life.

And for me to not take that into account when it comes to planning my estate is a recipe to have some bad things happen. Alright? So there’s expectations that need to be dealt with. I’ve got clients that I talk to who have received a big inheritance, and they feel this overwhelming sense of obligation. Like, I have this family wealth.

What do I do with it? Like, I’m trying to be accountable to the legacy that has been left to me, and I I don’t feel adequate to figure this out. You know? So there’s a fear that they’re not living up to the expectation of a grandparent or a parent who left them in this position. It’s very emotionally wrought, and having a conversation with a financial adviser or other professional who knows you and your family situation a little bit can be helpful.

But having conversations and gaining perspectives can begin to manage some of these fears because some of these fears are unfounded. If you get it out in the open, it’s not it’s not a big deal. Alright? So communicating can have an upside. It can belay some of these fears.

Some of these fears you have may not be as big a deal as you as you think. Expectations gain. So there’s a real issue with expectations, and we get to see it from all sides as financial advisers. You’re talking to the next generation and they’re saying, okay. What what are your goals?

It’s like, my retirement’s set. Mom and dad are loaded. That’s my retirement plan. Like, really? That that’s the room we’re in?

Appreciate your optimism, but that’s not a very independent way to and, again, I’ve got a bias towards being independent. Financial independence is a thing. So the challenge for that generation that’s giving the money is like if that next generation knows that they’re going to be set financially, they absolve themselves of all responsibility. I don’t need to plan my own finances because one day I’m gonna be fine. Now there’s 18,000,000 different ways that that can go sideways.

You know, the previous generation can live longer. There could be a tax issue. There could be a health issue. There could be anything that gets in the way of that expectation. So it’s it’s important to manage those expectations.

From a financial perspective, robbing a generation of their independence by setting an expectation that takes it away from them can be damaging. And there’s all kinds of studies on sudden wealth and what that does to somebody, what they accumulate over their lifetime, how financially independent they maintain. So again, it’s a fraught conversation. This is one of the reasons it’s not talked about because of fears of those kinds of issues. And when you’re on your way out and you’re coming up with all these plans, it’s like, well, I’m only gonna leave money to my daughter if she leaves that guy that she’s dating, and I’m only gonna leave money to my grandkids if they go to school.

You have this long list of expectations. Life doesn’t go in a straight line. You know? You could say, you know, it’s really, really important that, you know, my grandkids go and get a master’s education somewhere, and it turns out they’re a gifted musician or they take a different path that is equally laudable but does not require that narrow path. So you gotta be careful on how you express those expectations and what kind of obligations that you leave behind because life doesn’t go in a straight line.

And, you know, if you look back at your own life, you probably can witness a few different changes in direction that have occurred. We’ll try to project that forward. I’ve got all these expectations in my estate. How much latitude should I build into this to let the smart people that I’ve are in my life make decisions going forward? So I had a conversation with a client.

She it was a really big deal. She wanted to come in to talk about because she was very, very concerned about her grandkids. And she wanted to make sure that her estate properly supported her grandkids, and that’s a very common thing later in life. It becomes less about yourself, more about grandkids if you’re so lucky as to have them. This particular client came into the office with her son, and her son was acting as a power of attorney on many of her affairs, and so obviously, it was a trusted individual.

And she sat down and she was very anxious to make sure that we properly took measures to look after the grandkids, and she went into great detail about, well, what if this and what if this? Okay. I want it handled this way. I want it handled that way. And she explained it all to me very well.

And I said, no. This is your son. Right? Yeah. And they’re his kids you’re talking about.

Yeah. And you trust him? Oh, absolutely. He’s my power of attorney. Well, why don’t you just give him the money and let him make all these decisions?

I never thought of that. She felt that she was going to have to put together a complicated trust structure, was gonna come with expenses, which was gonna become with tax filings in order to make sure that these complicated instructions she was leaving behind could be properly dealt with when in fact the answer was sitting in the room with her patiently just listening to her talk. Right? So sometimes we overcomplicate things thinking we’re accomplishing something, but there could be another solution. Of course, I could say that sometimes you don’t have that person, and, yes, you have to go through all those steps because your child is not all that good.

Okay. So I didn’t write this slide. I think to say that we are ensuring everybody’s on the same page might be overstating it. The purpose about talking about money is hopefully getting everybody closer to being in the same book, not necessarily getting on the same page. But the reason that people don’t do it is there’s a risk in it.

Alright? There’s a risk of conflict. There’s a risk of unearthing something. So the advantage to talking about money openly is that it gives an opportunity to make things a little simpler. Because when you get too complicated, the lawyers make more money, the accountants make more money, there’s additional tax filings, and you can put yourself in a situation where the money’s not available for something important.

You set money aside for a grandchild to go to school, but they have a they have an accident when they’re 16 and they need to have medical expenses paid, but the money is locked up only to be used for education. Well, maybe that wasn’t what you wanted. Like, you would have wanted that the wealth would be used for that purpose, but if you didn’t leave it behind in such a way, then, you know, you’re again, you’re not gonna have that effect. So talking about money allows the opportunity for everybody to get on the same page. It happens best if there’s a moderator or mediator in the room.

Now depending on who you are as to who that is, whether that’s a close family friend, your financial advisor, your accountant, a lawyer, just somebody there for, like, that perspective, that third party to help moderate the conversation and make sure this stays productive and stays in a good direction. Having the conversation can save you unimaginable money and taxes and expenses and can sometimes avoid hard feelings and unintended consequences. Disadvantages of talking about money is you have situations where people are maybe not as competent as you hoped they were or they would not behave the way you wanted to behave. One of the things we run into is where people try to give away their money before they die. I’m just gonna simplify this.

I’m gonna give away the money or give away the property. But then you get to sit there and watch them screw it up. That’s not fun. We had one client that came to us and they were just, you know, listen, I gotta get this all looked after. So I’m gonna put this property in my daughter’s name so it’s, you know, safe, probate, and everything else.

And it’s like, okay. You know, it’s it’s your your property. You get to give it away. Following year, the committee of our officers said, she doesn’t know what she’s doing. I’m taking the property back.

It’s like, it’s not how it works. You know? I think you you you you can’t do that. You know? So sometimes acting in advance and giving to the next generation means you’re gonna sit there in judgment whether you think you are or not.

Again, a complication to consider. All of these have a complication attached to them. So and again, the the receiving generation can be affected by the expectation of wealth, so it robs them of some of their own independence, and if it doesn’t play out that way, you have a problem. You have not only the people you’re naming in the will, you have their spouse, you have their creditors, you have all kinds of other people who are interested in the outcome that need to be at least considered. Right?

Spouses is a tough one because a lot of people have an opinion on their children’s spouse and sometimes there’s multiple spouses or or blended families. It gets very complicated. You talk to a lawyer not because of how much work they’re gonna do. You talk to a lawyer because of what they know. They can guide you around things you don’t even see as being there.

General tips for talking about money with family. Try to not go in with a lot of expectations. Go in curious. Like when I had the conversation with my kids about money, it’s like, what do you think my estate looks like? Start there.

You know, find out where the next generation’s head is. Oh, I don’t think about it at all. Just it is what it is. Okay. So you weren’t expecting anything.

You weren’t expecting a property. You weren’t expecting any money. No. Okay. That’s where the conversation starts.

Rather than going in and saying, okay. Here’s what I’ve done with the estate, and here’s what I expect, you know, you to do, ask. And if you’re the child going to the parents, say, hey. Listen, mom and dad. I wanna make sure that I’m as prepared as I can be.

Would you mind sharing with me what your expectations are? Ask a question. Find out where the person you’re trying to communicate with is before you start explaining what you wanna see happen. Then you have an opportunity to have a better conversation rather than somebody lecturing. Sometimes it gets all concerned.

It’s like, you know, I’m really they’re gonna want all the money. It’s gonna be really important to them, and that’s causing me a lot of grief. And you ask, and I say, no. No. No.

Dan, I’m good. Doesn’t matter to me. Really? Then all of the a lot of the stress can be moved away. Ask questions.

Start your conversation by asking and try to meet somebody there. Because every step you take in establishing a trust fund or putting a stipulation on something, you run the risk that life’s not gonna turn out in a way where that makes sense. So you wanna avoid that where you can and trust those that you can to make decisions going forward for you. See, my part was the shortest part today because we let the smart guy talk longer. Alright?

So, anyway, thank you for your attention. We have a little bit of time. If everybody wants to ask some questions, you can pick on Josh for the market. You can ask for more stories because we have lots of them. I’ve got lots of stories in the room.

Hey. Actually, one point, and maybe you’ve never seen this happen before either, and somebody in this room has reminded me of this. Life insurance goes directly to the beneficiaries unless somebody objects. I never saw it before. I submitted a death claim, was expecting a check back, somebody objected to the beneficiary designation, and it got held up for how long?

Months. So just when you think you absolutely had it nailed, there are wrinkles. That’s where professionals in your life can help guide you through things. Anyway, I told you I was gonna stop talking. I’ll stop talking.

And we’re gonna open up to questions. We have hand here first. Question about a will. We made our will up forty

Jonathan Hooper: years ago. Yeah? Are

Colin White: wills registered?

Jonathan Hooper: No. So, they’re not registered anywhere. A will is a private document that either you have the original or you store the original somewhere else, or some lawyers will keep the original with them. There is no central registry where it goes where you can find out where your will is or where your loved ones can find out. What you need to do with your will is to say, This is where it is.

It’s either in a safe deposit box or it’s in my lawyer’s office or it’s somewhere else. And you need to tell your executor, this is where it is. When you get the call, you need to go here. And if you don’t know, then that is a problem. Okay.

Yes? Sure. I can talk a little about probate. It’s the worst thing imaginable. Have you heard?

So, is there a specific question? My mom is 92 and she has a condo. And there’s three kids involved. How to avoid COVID? Okay.

Well, I’m going to take one step back. Okay? Because the starting point for everyone is, I must avoid probate. And I say, okay, great, what is probate? And people go, I have no idea, but I’ve heard it’s terrible.

Okay? Now, probate is required usually in two different situations. And probate is not something the government mandates, by the way. This isn’t like forced down on you. This is required by either A, a bank or financial institution when there’s a bank account in the deceased person’s name only that’s over a certain threshold.

Or two, there’s real estate in the deceased person’s name only. Okay? Because in order to register a transfer of ownership, the property register needs a grant of probate which is essentially a recognition that the will is valid and the person or people named as executors have the legal authority to act on behalf of the estate. Okay, that’s why it’s needed. Now, what is it?

It is usually a stamp or a letter from the probate court that says we accept this is a valid will and that this is the beneficiaries and these are the executors and there is a process for accountability. So there’s a disclosure of assets to all the beneficiaries. There’s a disclosure of who gets what and it’s all public in the sense that everyone who’s named there has a right to see what’s going on. Get to see all the decisions the executor makes. Now the controversial part about this, the part that people think is the worst thing imaginable is the fee.

There is a fee for Probate. And in Ontario, it is 1.5% of the value of the assets that go through probate. So again, we talked about the difference between inside your estate and outside your estate, only the stuff that is inside your estate goes through probate. Now there’s a second layer in Ontario that’s even more fun which is you can have more than one will and you can divide your estate into two parts. The part that goes through probate and the part that doesn’t.

Alright and I’m not gonna get too much more complicated than this or too much further down this road But when it comes to real estate, the main thing is this. The cost of avoiding probate, that 1.5% of the value of that condo might exceed, you need to do the math. Is the probate fee on that going to be less than the cost associated with avoiding it? So, avoiding probate. Transferring ownership of that condo now.

There would be legal fees, there would be registration fees, there could be fees and obligations. Oh, there’s tax fees, yeah, there’s a deed transfer tax fee as well. There’s a lot of different considerations of expenditure that happen in getting that out of that person’s name versus how much the probate fee of that condo is going be. Alright? You have to do the math first before you make the call.

Because in some situations it might just make more sense and be more simple to just say, hey, fine. It’s the only asset. Let it go through probate. Because it’s going to make it real simple. So in my line of work, there’s a continuum.

There’s simple and clear on one end. And on the far end, there’s paying the least amount of taxes and fees possible. Alright? And they’re never the same. Alright?

Usually people’s tolerance is somewhere in the middle in terms of you are going to have to pay some taxes and fees. But how much of professional fees in advance are you going to pay to avoid them versus this is really simple. I had a client come into me and said, look, they had a large estate. They said, look, I’ve been told I should avoid probate and I should not pay these fees. I said, okay, let’s calculate how much they are.

We calculated how much they were, how much it was going cost to avoid it. There was an annual cost and X, Y and Z. I said, If we leave it as it is now, everything will remain the same and this is the probate tax that will be paid. And they said, Look, I know I’m gonna pay more in probate tax, but I understand what’s going on and so will my kids. And I’m not paying people to dance around.

I will make sure that this goes to who I want and it’s really clear. Now they understood eyes wide open that there was probably going to be a higher cost to their estate than if they were to take measures in advance. But to them, clarity and certainty were more important than that.

Colin White: And this is when I fell in professional love. This is a lawyer who will give you that answer. The financial industry and the advice industry in general plays a game of holes, snakes, and ladders. They dig a hole. Probate’s a thing.

Oh my god. That’s a bad thing. It’s gonna take money out of your estate that should go to your kids. It’s a death tax. Oh my god.

That’s terrible unless you do this thing, and they just moved you to action. Whether that’s a lawyer charging you to change ownership on a property or to invest in a product or take some other action, it is a very commonly used tactic to get people to act and consume professional services or buy a product to avoid something that is actually less than what the cost of avoiding it is. The insurance industry has segregated funds, which are typically a more expensive mutual fund, and one of the things they will hold out is, hey, this is outside of probate. Well, they’re more expensive by the factor of probate, and you’re gonna pay it every year. Right?

So, yes, they’re true. But if you do the math, it doesn’t make any sense. That that that story I told of the client who went and changed their property just walk in the local office that says, hey. I wanna put this in my my kid’s name. Lawyer did the transaction.

Yep. Absolutely. Didn’t ask a question about why or what the situation was or explained that there was a potential problem with doing it. Just did the transaction, cashed the check. Everybody had a good day.

The answer you just received is the

Jonathan Hooper: best answer in the history of answers and you’re not gonna get it from very many lawyers. Do the math. So I actually spoke to a conference of real estate lawyers They said, What’s the one thing that we should take away? I said, When your client comes in and they says, I just want you to do this for me. I told them, You need to ask them why.

Don’t just go, Sure, absolutely. We’ll have that ready for you next Tuesday. Why? Why are you doing this? What is your purpose behind it?

What do you want to achieve? Because that opens the broader question of what do you think you’re accomplishing by doing this? What’s your purpose? Is it a gift? How?

Is it a gift now? Is it a gift later? What’s the tax consequence? Because it might be simple. It might be that simple but it’s usually not.

So when it comes to these types of things and Collins right, there’s a whole industry around telling you what either scaring you or telling you what is best for you without knowing you at all and giving you the product for it. Boy, have I got the two wills for you. Boy, have I got the estate freeze and family trust option that’s going to do the very best thing for you. I was actually speaking to a new client and they came to my office and they said, we were just speaking and they said listen, I’m a startup, I just provided this company and a client advised me, hey look, my friend just got the package. They said, what’s the package?

They said, well he got this package where it has this family trust and it’s this legacy and it sets everything up. I said, okay, well tell me about your friend. Well he’s 22 years old, he has no family, he has no kids, no spouse. They said, Well what on earth is he doing with a family trust? Because they said this is the gold standard estate package.

Well, maybe it is but he overpaid for something that he was never going to use or at least he wasn’t going to use for many years and that certainly wasn’t suiting his needs right then. There is an industry out there that’s going to tell you this is what you need. The way you’re going to decide whether or not that is what you need is if the person trying to sell you that is going to tell you this is what’s best for you and you have to make that call. So, let me try to say that one more time. You have to decide what’s best for you and what you want.

A professional telling you what is best for you may not be right. But it’s up to you to decide. And if you have a good professional they will tell you the options that you have. And it’s important for you to get those options and not just one option or the option you assume you have. That’s the value a professional, particularly a legal professional can give.

And the rest really is up to you.

Colin White: Well, it’s like they say that the guy who finishes last in medical class, what do you call him? Doctor. So there’s a range of lawyers out there. I’ll answer this first, you can give a better answer. Because if you go on, we’ve produced some content on choosing professional advice.

Professional financial advising is the same as a lawyer. Couple of things to look for. How many questions do they ask? How much time do they spend asking you questions about you, your situation and what you’re trying to get done before they start giving advice? That is somebody who’s willing to spend some time and they’re you’re more likely gonna get an answer that lines up with your situation.

If you walk in and they say, yeah. The will’s $550, then we’ll tack on a power of attorney. Yada yada yada. It’s a thousand bucks. Sign here.

Come up back on Wednesday and pick it up. It’ll be done. You’re not getting advice. You have somebody who’s doing a transaction. So I always go back to the questions.

How much time and what process did they go through before they started giving you advice? You know, referrals can be a good thing. The other problem is different lawyers have different specialties. Right? One thing I found in my lifetime, I figured I’d find a good lawyer and I’d be set.

No. Because there’s no one lawyer who’s got expertise in all the different provinces and all the different areas. So, yeah, I can give you the name of some lawyers and some jurisdictions for some things, but even I’m in a position where I can’t say here’s five really good options for you. It’s very difficult to keep count of. But look for somebody who’s asking you questions before they give you advice, That goes for all professional advice that you’re going to consume.

But here comes Jonathan with a better answer.

Jonathan Hooper: Wow. Really set me up there. There’s two considerations when thinking about a lawyer. There are general practitioners out there. In my experience, all right, and this is part of the reason why I’m doing what I’m doing with the firm I’m at.

In my experience, there’s two types of lawyers who deal with the states. There’s the small firm sole practitioner who does real estate, wills, and companies. Okay? And they might be fine. That might be fine.

And then there’s your I’m a real professional estate lawyer. I am an expert in tax avoidance. I can set up companies. We can put the structure in place to minimize, to make it real complicated, real. It’s going to do X, Y, and Z.

It’s going to have all of these great different tools and bells and whistles with it. And that might be what you want and that might be what you need. But there’s nothing in the middle. You need to find someone who A knows what they’re doing. I know that might be hard but here’s how you know.

Are they giving you the product of the document or are they going to give you advice? One of the best ways of knowing this is if they have a set fee, for example a flat fee, I guarantee you you’re getting the product with very little or no advice. If they’re going to be transparent and say I don’t know but here’s the range of cost because we need to have a discussion about who you are, what you own and what you want to do with it. That’s the kind of lawyer you want. Because they’re not, a lawyer who does that is going to give you a win win situation.

So the win is you’re going to get the advice that you need and they’re going to have a good and happy client at the end of the process who pays their bill and who will refer other people to you. That’s win win. If you have a situation where are expecting a transaction document, there is a winner and a loser. The winner is I paid the least amount for this and this is what my expectation is. Or I’m going to spend the least amount of time preparing this because I want to maximize the amount I get out of it.

If you look at a winner and a loser, it’s not going to serve you. It’s not going to tell you what you need to know. You need to have a lawyer who is willing to sit down with you and you will pay for this. The legal advice that you don’t know and that a document preparer won’t tell you. Again, just like we went through the presentation, there are many things that are outside of just a will or power of attorney that are really relevant to your estate that you might not think of and if it all doesn’t work together it can all fall apart.

Looking for a good lawyer, how do they charge you and ask am I going to get advice? What experience do you have with family cottages if I have one? What experience do you have with giving money to children with disabilities? What experience do you have with multigenerational wealth transfers? You can ask those specific questions before you hire someone.

And if they give you an answer you are not happy with, go somewhere else.

Colin White: I gotta stop get you to stop saying tax avoidance. Tax avoidance bad. Anyway, listen. We’ve used up probably more of your time. Sorry?

Jonathan Hooper: There’s one more question.

Colin White: Was there okay. We we’ll we’ll squeeze one more in. Where where was the question? There we go. I had a question for Jonathan.

Is there some way you can put in your healthcare power of attorney that you don’t want to go into a long term care facility?

Jonathan Hooper: Sure. You can do that. But what you need to understand is that the power in these documents is in the person who you appoint. You can give specific directions. But unless that I’m trying to be as simple but it’s a complicated answer.

The power is in I trust this person to make this call and I tell them that I don’t want this no matter what and to use all of my resources to keep me living in my own home as long as possible. I have used language like that in a power of attorney and that’s something that you can put in there. The issue becomes you have to trust that person to do it. Because the remedy is somebody, obviously if they are doing it you are not able to say no. Is there somebody else in place who can keep them accountable?

Right? That’s the real question. Sure you can put it in a document but you have to trust the person who is doing it. Not necessarily. So okay, I don’t want to get into this too deep.

But MAID is not something you can delegate. Alright. It’s not something a power of attorney can do for you. The other thing is a power of attorney document is powerful insofar as the person who you present it to and say I’m the person with authority to make this decision, it’s up to them to accept it and the degree and scope of what it says.

Colin White: If you have further questions, come on up. We’re not running away. But before anybody leaves, the only cost of admission is we want feedback. Feedback forms are being presented to the tables as we speak. I didn’t let you be distracted by them during the presentation, so you could pay full attention up here.

Please take a second to fill out the feedback forms. We use them to guide what you guys would like to hear more of, and we do take requests, and much of what we do has come back from feedback forms. So please do that for us if you’d be so kind. And just a reminder, Bare Naked Money. New episode drops every two weeks.

Josh is on the mic. So a lot of fun. We put a lot of stuff out in our podcast, a lot of stuff on the website, and we do take requests. So if anybody wants to hear more about a topic, let us know. We’ll do our best and to include all of the feedback that we get.

Thanks again, we’re not going anywhere. Come up and ask further questions if you like. Thank you.