We are often asked how it works with a person’s assets after their death. Are all the assets dealt with by the Will and administered by their executor? In other words, do all their assets fall into their estate?
The short and simple (and favourite) answer is – not necessarily. It depends.
After meeting with clients and learning about their life, one of the first things we do is find out what kind of assets our clients hold; whose name the assets are in and whether there are any designated beneficiaries (for the assets that allow for designated beneficiaries). This information allows us to determine what assets will fall into a person’s estate (and are dealt with by their Will) and which assets do not fall into the estate.
The basic rule is that all assets which are held in a person’s sole name, and which do not have a designated beneficiary, will fall into that person’s estate following their death.
Any asset which is held in joint names, with the intent of right of survivorship, shall pass outside of the estate to the survivor owner. This most often includes real estate interests and bank accounts (although it can include many other asset types).
An asset that can have a designated beneficiary (and does have a designated beneficiary) shall also pass outside of the estate. These types of assets include registered investments (RRSP, TFSA, RRIF, LIRA), insurance policies and pension death benefits. It is important to confirm who your designated beneficiaries are with the relevant institutions. Although this is often done at the time you set up the account or asset, you may want to ensure that the designations reflect your current wishes.
Finally, if a client has ever established a trust in their lifetime and transferred assets into the trust then that trust will govern the assets (they would typically not form part of the estate).
So, once we have determined where the assets flow (inside or outside of the estate), then what? We can use that information to decide if we want to alter any arrangements a client currently has in place. For instance, if a client has listed their children as the designated beneficiaries of a registered investment, we have the opportunity to decide if that works best for the overall estate plan, and if it doesn’t, we have the opportunity to consider a change.
At Touchstone Law Group LLP, we pride ourselves on providing high quality and customized estate planning services. This means, not only carefully drafting estate planning documents that correspond with your instructions, but also spending the time getting to know you and creating a customized estate plan that fits your unique needs and wishes. If you would like to learn more about life estates or the estate planning process, or if any of your documents need updating, please do not hesitate to reach out to one of our lawyers practicing in the area of wills and estates.
Author: Jennette Vopicka
This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250) 448-2637 or any of our lawyers practicing in the area of wills and estates at the following:Jennette Vopicka: firstname.lastname@example.org Danielle (Dani) Brito: email@example.com Jane Otterstrom: firstname.lastname@example.org Sasha Platz: email@example.com