# Wills and taxes



## Bobcajun (May 15, 2018)

The summer is coming up and I thought we should write a holographic will just in case, because of travel

the question has todo with gifts to charity from rif. My wife wants to make gifts to certain charities on her death. I am fine with this. But does the rif not automatically transfer to the living spouse on death?

would, or should, we not wait for the second spouse’s death to carry out those wishes?

another funny thing about wills. I guess Inever thought about them before and don’t understand them very well, is that it seems we have to write them individually. That makes it difficult to divide everything up. We have been used to just lumping everything together

thanks bob


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## AltaRed (Jun 8, 2009)

You need to educate yourself quite a bit on Estate Planning and Wills. Google for financial institution sites like RBC for articles on Wills, etc, legal websites and even accounting websites for information on this subject. 

In the absence of a Successor Annuitant (surviving spouse) or a designated beneficiary such as a Spouse or a Child or one's own Estate, the RRIF collapses to one's estate, which is then settled by the Executor of the estate. Wills and estates are individually based and that is why it is important to have a properly designed Will, i.e. to appoint an Executor to settle your estate and to designate beneficiaries of your assets, e.g. may be wholly a surviving spouse, or a percentage to surviving spouse and other named beneficiaries in specified portions, etc. 

If most assets are Joint, as in JTWROS, it is then mostly true the remaining co-owners of the assets become the sole owner(s) of those assets without going through Probate. You still have to make provisions for assets that are in individual name only, and/or if your spouse pre-deceases you, or you both die in an auto accident or plane crash together. 

With respect to your specific question, the only way your wife can be assured that her charities receive a portion of her estate assets is for her to name them as beneficiaries in her Will. She has lost control if she leaves all her assets to you because she no longer owns any assets at that point and it then is your own personal decision what you then do with your assets in your Will.


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## Bobcajun (May 15, 2018)

Thanks for the detailed reply. When the summer is finished we plan to do a notarized will, mostly to avoid probate.


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## Numbersman61 (Jan 26, 2015)

The notarized will does not avoid probate. The only way to avoid probate is to have assets jointly owned or in the case of a registered plan (RRSP, TSFA or RRIF) have a successor or beneficiary named.


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## agent99 (Sep 11, 2013)

AltaRed said:


> With respect to your specific question, the only way your wife can be assured that her charities receive a portion of her estate assets is for her to name them as beneficiaries in her Will.


This is true, but that will only work if the RRIF does not specify spouse as a successor annuitant or a beneficiary. 

When opening a RRIF it is common practice to designate a beneficiary (or successor annuitant) and it is usually the spouse. Many don't even recall doing that or at least what they filled in! Any beneficiary/annuitant named in RRIF would have to be removed for the will to become the determining factor. But then the RRIF would become part of the estate and subject to probate and taxes - something Bobcajun rightly seems to want to avoid. 

There is probably a better way to do this - certainly not by writing a holographic will.


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## AltaRed (Jun 8, 2009)

I agree that every time I hear about a holographic Will, I get a rash. The only thing potentially worse is no Will at all.

I agree in the case of a RRIF that if the surviving spouse is successor holder, the issue of giving to charities is off the table. I was responding to the broader question of the name of this thread, i.e."Wills and taxes" though the OP really hasn't said anything about taxes.....yet. Presumably the OP's spouse has some assets (other than RRIF) in individual name only, and if so, she can include charities as beneficiaries in her Will. No mention of TFSA or other non-registered assets either.


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## Bobcajun (May 15, 2018)

Thanks for the replies. I am certainly not an expert here but I don’t think holographic wills scare me too much. No children. Yes, there are assets in tfsa and margin accounts. But, the main concern here is to avoid taxes in the rif accounts. One poster stated the problem, I believe and it is that if the rif is automatically signed over to the spouse then it is more or less necessary to wait until the second spouse dies in order to make the desired gifts to charities.
Regarding the point of avoiding probate, the online will company, willful, says that at least in Québec, a notarized will does avoid probate:

Wills that follow the provincial requirements in Quebec (for example a holograph will or an online will like the one created with Willful’s Essentials plan) are just as legal as those prepared by a lawyer or notary as long as they are executed properly. The legality of a will holograph will or will in front of witnesses is based on the final document and correct witnessing and signing, not on who prepared it.
However, only a will that complies with the requirements for a notarial will that is executed by a notary can be deemed a notarial will, thus avoiding probate after you pass away. And a lawyer or notary are the only people who can give you legal advice as you create your will.

Bob


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## AltaRed (Jun 8, 2009)

Every RRIF will be taxed upon collapse, e.g. last to die in the case of a successor holder, or section 60(1) rollover, or earlier in the case any other beneficiary. If spouse wants to give to charity, then: 1) make her Estate the beneficiary of her RRIF and her RRIF will be collapsed into her Estate from which contributions to charities can be made, or 2) make the charities the beneficiaries of her RRIF. It is not a hard problem to solve.

Taxation of RRIF proceeds upon collapse cannot be avoided, but an offset in whole or in part can be generated through gifts to charity.

Added: I am not suggesting holograph Wills are not legal if executed properly in certain provinces but the issue is getting the right content to deal with a number of both independent and cascading scenarios. It is easier if there are no children involved but it doesn't mean the Will won't be contested by discontent relatives who may feel, or be unjustly, left out.


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## Numbersman61 (Jan 26, 2015)

Bobcajun said:


> Regarding the point of avoiding probate, the online will company, willful, says that at least in Québec, a notarized will does avoid probate:
> 
> Wills that follow the provincial requirements in Quebec (for example a holograph will or an online will like the one created with Willful’s Essentials plan) are just as legal as those prepared by a lawyer or notary as long as they are executed properly. The legality of a will holograph will or will in front of witnesses is based on the final document and correct witnessing and signing, not on who prepared it.
> However, only a will that complies with the requirements for a notarial will that is executed by a notary can be deemed a notarial will, thus avoiding probate after you pass away. And a lawyer or notary are the only people who can give you legal advice as you create your will.
> ...


Very interesting. Just shows how important it is to remembet that each province has its own specific unique laws.


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## birdman (Feb 12, 2013)

While we are are on the subject of wills ours is quite simple with upon death our estate goes to our spouse and after their death to our 2 surviving children. However, we would like to also leave a larger sum (say around $100,000.) to each of our 3 grandchildren. Fortunately, all the children seem to be doing fine but they are young and of course we also have concerns about them receiving the funds if they happen to go down the wrong path (eg crime, drugs, lazy, bad relationships, etc). Ideally, the funds would be used for education, house purchase, etc as opposed to new fancy cars or just to live on for awhile without working. Our lawyer mentioned that "you cannot control you assets from your grave" which is a good comment. I also mention that our children are fully responsible and are doing well financially and work wise so there are no issues there. Just wondering if anyone has any thoughts or ideas on the subject.


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## Bobcajun (May 15, 2018)

Thanks for taking the time to discuss this subject, everyone. It is very generous of you to share your wisdom. I have profited from your advice and I appreciate it very much.

regarding the last poster who was given the advice thatyou cannot control your asstd from beyond the grave. I think that is pretty good advice. Anectdotaly, we have cousins whose father, a rich and competent man, didn’t have a lot of faith in his kids. I should say that he had good reasons for that. So he set up a trust so that the money would be paid out over a long time span. He wasn’t as smart as he thought he was, though, because the Trus did not invest very well. And also, whenhe set it up bonds were paying a high interest. Today the recipients are still collecting bond interest. Andyou know how much that is today. Can’t see around all corners, I guess. No one can. So I guess we just have to bite the bullet and let them do what they want with it
Bob


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## Mukhang pera (Feb 26, 2016)

Bobcajun said:


> regarding the last poster who was given the advice thatyou cannot control your asstd from beyond the grave. I think that is pretty good advice. Anectdotaly, we have cousins whose father, a rich and competent man, didn’t have a lot of faith in his kids. I should say that he had good reasons for that. So he set up a trust so that the money would be paid out over a long time span. He wasn’t as smart as he thought he was, though, because the Trus did not invest very well. And also, whenhe set it up bonds were paying a high interest. Today the recipients are still collecting bond interest. Andyou know how much that is today. Can’t see around all corners, I guess. No one can. So I guess we just have to bite the bullet and let them do what they want with it


It seems that all law students hear the old saw about mortmain law, not controlling assets from beyond the grave, etc., but then we learn the law of trusts, which is a method of doing just that. Just not forever. There are things like the pesky rule against perpetuities with which to contend and other bits of law inimical to the most controlling of testators. In that regard, I refer to the above post about the cousins.

I am not sure whence the trust to which Bob refers is administered, but in many (if not all) Canadian jurisdictions it is quite possible to "bust the trust" in certain wide-ranging circumstances. Bob's cousins might want to seek legal trust-busting advice to enable them to escape the bonds of bonds and into, maybe, bitcoin. Or just take the money and have a party. Here are a couple of examples from my home jurisdiction of BC:

Ninke v. Ho S.C., Milman J., 2020 BCSC 1669, Chilliwack S36836, September 23, 2020 (oral), 5pp.

Grieg v. National Trust Co. S.C., Grist J., Chilliwack S007619, January 6, 1998 , 5pp.

Both judgments are brief. The essence of the latter is captured in this passage:

If there is only one beneficiary, or if there are
several (whether entitled concurrently or
successively), and they are all of one mind, and he
or they are not under any disability, the specific
performance of the trust may be arrested, and the
trust modified or extinguished by him or them without
reference to the wishes of the settlor or the
trustees. (Approved in Re Johnston (1964), 48 D.L.R.
(2d) 573 (B.C.S.C.) per Nemetz, J., as he then was).


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## AltaRed (Jun 8, 2009)

Regarding posts #10 and #11, I agree one cannot control "from your grave", at least not for long. For minor children of course, there needs to be provision for trusts, and in some cases for young adults, it may be wise to hold the bulk of the bequest in a trust until age 25 or so to encourage post-secondary education. Beyond that, you either have to simply accept the bequest will be used in a manner the recipients choose, or don't give it to them in the first place.

In many ways, it is also no different with a surviving spouse. The surviving spouse may go in a completely different direction once they are free to exercise independent choice. Never assume that one's assets will end up as originally thought. If you have a very specific bequest in mind for a very specific purpose, make sure it is in YOUR will.


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## Bobcajun (May 15, 2018)

AltaRed said:


> Regarding posts #10 and #11, I agree one cannot control "from your grave", at least not for long. For minor children of course, there needs to be provision for trusts, and in some cases for young adults, it may be wise to hold the bulk of the bequest in a trust until age 25 or so to encourage post-secondary education. Beyond that, you either have to simply accept the bequest will be used in a manner the recipients choose, or don't give it to them in the first place.
> 
> In many ways, it is also no different with a surviving spouse. The surviving spouse may go in a completely different direction once they are free to exercise independent choice. Never assume that one's assets will end up as originally thought. If you have a very specific bequest in mind for a very specific purpose, make sure it is in YOUR will.





Mukhang pera said:


> It seems that all law students hear the old saw about mortmain law, not controlling assets from beyond the grave, etc., but then we learn the law of trusts, which is a method of doing just that. Just not forever. There are things like the pesky rule against perpetuities with which to contend and other bits of law inimical to the most controlling of testators. In that regard, I refer to the above post about the cousins.
> 
> I am not sure whence the trust to which Bob refers is administered, but in many (if not all) Canadian jurisdictions it is quite possible to "bust the trust" in certain wide-ranging circumstances. Bob's cousins might want to seek legal trust-busting advice to enable them to escape the bonds of bonds and into, maybe, bitcoin. Or just take the money and have a party. Here are a couple of examples from my home jurisdiction of BC:
> 
> ...


As I say, the father knew the recipients very well and for that reason created a trust. Two of the cousins were given a small apartment block very near the Univesitéde Montréal at a young age. It could have provided a living for life. But they sold it and squandered ( at least according to my approach to life and maybe not theirs, ) the money. Probably just as well because they have a knack for getting the worst advisors. They would probably have had a whole gang of hangers on living for free.

no, I tried to help them and spoke to a lawyer friend, who also said that it would not be too hard to break the trust. The one really big requirement, and alas practically impossible to accomplish, was that they would have to work together. 
bob


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## AltaRed (Jun 8, 2009)

It doesn't matter how such things turn out. One can only put into place their intentions and once one is pushing daisies, it is whatever it is. The error I see in your example was the mistake in leaving business interests (and real assets) in the legacy. I include such things as family cottages in this category. These things generally do not end well. They have a way of unraveling as compared to simple financial portfolios like an all-in-one asset allocation ETF such as VBAL, or a 3 fund portfolio. It is pretty hard to screw that up beyond irresponsible spending.


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## ian (Jun 18, 2016)

We both have wills. We engage a lawyer. We update them every 5-7 years as required. We also get professional advice on how to structure our assets, beneficiaries, etc in order, among other advices, to make it simple for our heirs and to avoid probate fees. Probate fees are not an issue in Alberta but who knows where we may be living when we fall off our respective perches.

We have no desire to control past the grave. The only proviso we have is for a certain amount of money off the top, in addition to RESPs, to fund any post secondary and graduate education for each of our grandchildren. What our son and daughter do with the remaining monies will be up to them.

Baby boomer estates tend to be much larger these days. Often in real estate that will be sold. I do not understand the logic of not taking the time and spending a relatively small amount of money to get good advice and have this nailed down to your satisfaction. It is a small thing to do for your heirs and they will appreciate it. We did when our parents did the same.


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## twa2w (Mar 5, 2016)

"As I say, the father knew the recipients very well _*did not agree with their values when it came to money*_ and for that reason created a trust. Two of the cousins were given a small apartment block very near the Univesitéde Montréal at a young age. It could have provided a living for life. But they sold it and squandered _*'enjoyed'* _ the money" 

Fixed that for you  

As you implied, everyone has different values when it comes to money. Maybe the issue is as much trying to impose your values on your heirs when drafting a will as it it is controlling from the grave. 

Perhaps the spending approach is better. Enjoy it while you have it, no one knows how long you have. But it is very hard for savers to let go, even when they have more than enough.


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## Bobcajun (May 15, 2018)

twa2w said:


> "As I say, the father knew the recipients very well _*did not agree with their values when it came to money*_ and for that reason created a trust. Two of the cousins were given a small apartment block very near the Univesitéde Montréal at a young age. It could have provided a living for life. But they sold it and squandered _*'enjoyed'* _ the money"
> 
> Fixed that for you
> 
> ...


I don't think they had 'more than enough' for very long. But, TWA you missed a very important qualification in my post. I said:

But they sold it and squandered ( at least according to my approach to life and maybe not theirs, ) the money. I do give them the possibility to live according to their own lights. And, I think, leave them the possibility of being wiser than me in that regard. It seems there are two different perspectives here. You are aiming at those who have lots of money and will never spend a penny. I have stories of people like that, too! And then there is another perspective of those who spend like drunken sailors. Surely, there is a large space in the middle between those two.


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## twa2w (Mar 5, 2016)

Bobcajun said:


> I don't think they had 'more than enough' for very long. But, TWA you missed a very important qualification in my post. I said:
> 
> But they sold it and squandered ( at least according to my approach to life and maybe not theirs, ) the money. I do give them the possibility to live according to their own lights. And, I think, leave them the possibility of being wiser than me in that regard. It seems there are two different perspectives here. You are aiming at those who have lots of money and will never spend a penny. I have stories of people like that, too! And then there is another perspective of those who spend like drunken sailors. Surely, there is a large space in the middle between those two.


I saw your qualification - that why I said you implied everyone has different values. And yes there is a wide spectrum of approaches to saving and spending - I wasn't just aiming at the tightwads who will never spend a penny. Who am I to say which approach is right - I was simply saying many people - especially the savers - and not just the extreme ones - are often the ones who try to 'control' from the grave -if they don't agree with the heirs spending habits. Of course there are often other reasons they try to control what people do with their money after they are gone.

And of course the big spenders can't do that because they have no money  

One of my uncles, who was 'well off' through a life of prudence, late in his life sent everyone of his nieces and nephews a nice unexpected sum of money. His instructions were to spend it on something that they enjoy or buy something that gives them pleasure. He told them not to save it and requested they let him know what they spent the money on. I think he realized too late that he should have enjoyed life more. 

Although I was a penny pinching tightwad for years, I now feel a more balance approach is better and I no longer look askance at those who spend it as they get it. When the survivor of my spouse or I die, all my money goes to my son. If he is married then and they later split up or he dies and she gets 1/2 or all of it, I don't care. Man has survived for hundreds or thousands of years and until recently the only thing you got handed was life skills or perhaps the flint knapping stone. Wealth rarely lasts past the 3rd generation, why would it matter if much in the long run if I manage to keep it in the family line for one generation longer or controlled it via a trust.


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## Bobcajun (May 15, 2018)

twa2w said:


> I saw your qualification - that why I said you implied everyone has different values. And yes there is a wide spectrum of approaches to saving and spending - I wasn't just aiming at the tightwads who will never spend a penny. Who am I to say which approach is right - I was simply saying many people - especially the savers - and not just the extreme ones - are often the ones who try to 'control' from the grave -if they don't agree with the heirs spending habits. Of course there are often other reasons they try to control what people do with their money after they are gone.
> 
> And of course the big spenders can't do that because they have no money
> 
> ...


Good post! I must be one of the original dinosaur capitalists. I don’t enjoy spending that much. The sociologist Max Weber wrote a book called, i think, “Capitalism and the Spirit of Protestantism”, in which he said much what you just said. There was a first generation of ascetic capitalists, much like the monks whom they had dethroned, but living a kind of worldly asceticism. They became successful because they were ascetic and didn’t spend. Thus they had the money to invest. The later generations didn’t have that ascetic spirit and spent rather than saved. Who knows who is right? I am for a generous spirit without being foolish. Then again, how do we define foolish? Since there are so many opinions on that subject I guess I will have to choose my own!
Bob


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## Retiredguy (Jul 24, 2013)

Bobcajun. As your OP included wife wanting her RRIF to go to charity and you are fine with that here is a link that may be of interest and provide tax savings.

Another Way to Donate from a RRSP or RRIF (queensu.ca)


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## Bobcajun (May 15, 2018)

Retiredguy said:


> Bobcajun. As your OP included wife wanting her RRIF to go to charity and you are fine with that here is a link that may be of interest and provide tax savings.
> 
> Another Way to Donate from a RRSP or RRIF (queensu.ca)





Retiredguy said:


> Bobcajun. As your OP included wife wanting her RRIF to go to charity and you are fine with that here is a link that may be of interest and provide tax savings.
> 
> Another Way to Donate from a RRSP or RRIF (queensu.ca)


Thanks for that link, Retiredguy. I did see it previously in my research. I am not sure I understand it entirely at the moment. And for that reason I will put it aside for the moment. but, I did make a mental checkmark to myself to go back and look a little more closely into that possibility. It does look interesting. The question of the giving to charity, although I made that the point of the question, is not crucial. I give to the same charities and, if she dies before me, I will certainly give to them. But, I hit the rock when I saw that we needed to individually make our wills. And I tried to figure out how that giving to charity would work if one of us should die before the other. Someone mentionned the oddodity of this question being in the tax thread. The idea with gifts to charity is not only to give to charity, but also lessen the tax burden on the estate. fortunatly or unfortunatly, we both have large Rifs. I will have to look at it closer but I suspect most, if not all, will be going to charity. Not a bad outcome for us, as we are interested in giving to organisations who do things for the world that we are not in the position to do. Thanks for the link
Bob


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## Spudd (Oct 11, 2011)

I would just add that it costs <$1000 to get wills and powers of attorney (financial and health) done for a couple by a lawyer (or since you are in Quebec, a notary?), and in my opinion, this is well worth it. Even if your estate was only say 100k, I think it would be worth it. The POAs especially are invaluable.


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## ian (Jun 18, 2016)

Spudd said:


> I would just add that it costs <$1000 to get wills and powers of attorney (financial and health) done for a couple by a lawyer (or since you are in Quebec, a notary?), and in my opinion, this is well worth it. Even if your estate was only say 100k, I think it would be worth it. The POAs especially are invaluable.


Agree. BC also has notaries.

Prior to our first time engaging a lawyer for our will we picked up DIY yourself will kit. We bought it to understand the process, the basic rules, and the data that would be required by the lawyer.

I did the the BC probate process for my mother's estate. Used a DIY book from Staples to guide me through. It was very straightforward.

What made it so easy and so stress free was that my mother had a properly prepared will and her financial affairs were organized appropriately.


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## Plugging Along (Jan 3, 2011)

birdman said:


> While we are are on the subject of wills ours is quite simple with upon death our estate goes to our spouse and after their death to our 2 surviving children. However, we would like to also leave a larger sum (say around $100,000.) to each of our 3 grandchildren. Fortunately, all the children seem to be doing fine but they are young and of course we also have concerns about them receiving the funds if they happen to go down the wrong path (eg crime, drugs, lazy, bad relationships, etc). Ideally, the funds would be used for education, house purchase, etc as opposed to new fancy cars or just to live on for awhile without working. Our lawyer mentioned that "you cannot control you assets from your grave" which is a good comment. I also mention that our children are fully responsible and are doing well financially and work wise so there are no issues there. Just wondering if anyone has any thoughts or ideas on the subject.


My parents wanted to do something similar, but the ages of their kids and grandkids had huge age differences. There is a 21 year difference between the oldest and youngest. The lawyer also said you cannot manage from the grave nor predict the future (sounds like it's pretty common to want to do so) especially when there is such an age difference. 

The lawyer has known our family for decades. The advice that my parents were given were to determine what the intent or objectives they wanted for the will and then see if the adult kids would follow it (my summary version).

My parents wanted the inheritance to be passed on as a representation of their love and hard work for the kids and grandkids to know how much my parents thought of them, and also to help them with their financial futures. In our case, none of the adult kids need the inheritance, and it would have minimal impact to our financial situation. For the grandkids, it would vary as it could be down payment, or the option to stay at home with kids, or help with university, or etc. Too many factors to consider. So my parents went with dividing their inheritance equally, and then if we didn't need to it, to determine how best to pass it on to our kids. The main caveat is we must make sure our kids understand what their grandparents sacrificed and did for the family, and how much they cares. For my oldest sibling, his kids will probably receive the whole inheritance passed almost immediately over. The middle may have to wait a bit, until they mature, but they will get some, mine will most likely get it for their post graduate degree (if that's the route they choose) or maybe as a down payment for their first home. We were also informed not the give the grandkids a cent until they learned to be financially responsibility and just in general responsible. So I guess my parents way of managing beyond is they have raise kids that they trust to carry out their intents.


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## Plugging Along (Jan 3, 2011)

Bobcajun said:


> Thanks for that link, Retiredguy. I did see it previously in my research. I am not sure I understand it entirely at the moment. And for that reason I will put it aside for the moment. but, I did make a mental checkmark to myself to go back and look a little more closely into that possibility. It does look interesting. The question of the giving to charity, although I made that the point of the question, is not crucial. I give to the same charities and, if she dies before me, I will certainly give to them. But, I hit the rock when I saw that we needed to individually make our wills. And I tried to figure out how that giving to charity would work if one of us should die before the other. Someone mentionned the oddodity of this question being in the tax thread. The idea with gifts to charity is not only to give to charity, but also lessen the tax burden on the estate. fortunatly or unfortunatly, we both have large Rifs. I will have to look at it closer but I suspect most, if not all, will be going to charity. Not a bad outcome for us, as we are interested in giving to organisations who do things for the world that we are not in the position to do. Thanks for the link
> Bob


I would be careful about naming charities specifically in your will when the other has not passed. Our lawyer informed us that there are cases where charities, once named, will go after the estate for more because they really have nothing to lose. The costs of these battles of coarse comes out of the estate. Our lawyer suggested again that we make it know to our beneficiaries and have their carry it out. This again only works if we trust our beneficiaries to do what we ask. 

In our case, my first priority is taking care of my younger kids. There are additional people/charities we would like to include, but don't want any risks. We have told our executor (family), and they will make sure that the kids know. We will also tell the kids when they are older too. In your case if its just you and your wife, could you not make your wishes know to the other, and have them execute it?


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## AltaRed (Jun 8, 2009)

That is wishful thinking in most families. Once the patriarch and/or matriarch has passed, in the majority of cases, the beneficiaries simply move on in the manner of life in which they wish, and could give a damn less about original desires of the testator.

A way to avoid the charity bun fight is for the eventual testator to set up, while alive, an endowment with a Foundation ahead of time with prescribed types of charities to be considered specified in the endowment, and then have a certain amount of one's estate proceeds go into the endowment as a lasting gift once the Will is probated. Good regional foundations have low overhead and effective portfolio management, and they will dole out the money over time to the suite of charities targeted by the testator. It also provides flexibility for the Foundation to cut off a charity from annual giving if it turns into a bad apple or folds.


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## birdman (Feb 12, 2013)

Plugging Along said:


> My parents wanted to do something similar, but the ages of their kids and grandkids had huge age differences. There is a 21 year difference between the oldest and youngest. The lawyer also said you cannot manage from the grave nor predict the future (sounds like it's pretty common to want to do so) especially when there is such an age difference.
> 
> The lawyer has known our family for decades. The advice that my parents were given were to determine what the intent or objectives they wanted for the will and then see if the adult kids would follow it (my summary version).
> 
> My parents wanted the inheritance to be passed on as a representation of their love and hard work for the kids and grandkids to know how much my parents thought of them, and also to help them with their financial futures. In our case, none of the adult kids need the inheritance, and it would have minimal impact to our financial situation. For the grandkids, it would vary as it could be down payment, or the option to stay at home with kids, or help with university, or etc. Too many factors to consider. So my parents went with dividing their inheritance equally, and then if we didn't need to it, to determine how best to pass it on to our kids. The main caveat is we must make sure our kids understand what their grandparents sacrificed and did for the family, and how much they cares. For my oldest sibling, his kids will probably receive the whole inheritance passed almost immediately over. The middle may have to wait a bit, until they mature, but they will get some, mine will most likely get it for their post graduate degree (if that's the route they choose) or maybe as a down payment for their first home. We were also informed not the give the grandkids a cent until they learned to be financially responsibility and just in general responsible. So I guess my parents way of managing beyond is they have raise kids that they trust to carry out their intents.


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## birdman (Feb 12, 2013)

Thanks Plugging Along and our family is very trustworthy and all have similar goals. I will take your advice and explain our wishes for our grandchildren and have a discussion with our children.. I expect it will be an easy discussion and between our estate and our childrens financial position there should be no issues. I like the approach.


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## Retiredguy (Jul 24, 2013)

Plugging Along said:


> I would be careful about naming charities specifically in your will when the other has not passed. Our lawyer informed us that there are cases where charities, once named, will go after the estate for more because they really have nothing to lose. The costs of these battles of coarse comes out of the estate. Our lawyer suggested again that we make it know to our beneficiaries and have their carry it out. This again only works if we trust our beneficiaries to do what we ask.
> 
> In our case, my first priority is taking care of my younger kids. There are additional people/charities we would like to include, but don't want any risks. We have told our executor (family), and they will make sure that the kids know. We will also tell the kids when they are older too. In your case if its just you and your wife, could you not make your wishes know to the other, and have them execute it?


If naming a charity make it a specific bequest like $50,000, not a % or share of the estate.


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## ian (Jun 18, 2016)

birdman said:


> Thanks Plugging Along and our family is very trustworthy and all have similar goals. I will take your advice and explain our wishes for our grandchildren and have a discussion with our children.. I expect it will be an easy discussion and between our estate and our childrens financial position there should be no issues. I like the approach.


We had a similar conversation with our lawyer. Her strong, strong advice based upon years of experience......get your express wiishes down on paper. Do not depend on others or leave it to chance. Do it right.

An experienced wills and estates practitioner will be able to get tis down for you in the correct form and with the correct intent.

Why? You have absolutely no idea what might transpire after your demise to change anticipated behaviors. This is why, as an example, we made provision for our grandchildren's post secondary edu expenses that is completely independent from their respective parents. It was not about trusting our children to do the right thing. It was about our desire to ensure that it transpired in the manner that we envisioned.


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## Plugging Along (Jan 3, 2011)

ian said:


> We had a similar conversation with our lawyer. Her strong, strong advice based upon years of experience......get your express wiishes down on paper. Do not depend on others or leave it to chance. Do it right.
> 
> An experienced wills and estates practitioner will be able to get tis down for you in the correct form and with the correct intent.
> 
> Why? You have absolutely no idea what might transpire after your demise to change anticipated behaviors. This is why, as an example, we made provision for our grandchildren's post secondary edu expenses that is completely independent from their respective parents. It was not about trusting our children to do the right thing. It was about our desire to ensure that it transpired in the manner that we envisioned.


I think the difference is if you have very specific ideas of how you want the inheritance to transpire. My in laws want specific amounts to be spent on the grandkids education, they have this documented and of course we would followthrough even if it wasn’t. In my parents case, some grandkids were gong through univeristy while the youngest being born. They didn’t have any specific wishes for the grandkids other than they spend it responsibly and it helps further them ahead financially (they don’t want the kids blowing it). That’s pretty difficult to write what ‘blowing it is’. However, we all understand what they intended, and they know we would follow through.


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## AltaRed (Jun 8, 2009)

There may be cultural differences here that make approaches to such matters vary. I have seen far too many real life examples of beneficiaries partying life away by the time the bodies get cold, including families that appeared initially to be harmonious and aligned. All I can say is good luck with the roll of that dice. It may, or may not, play out.


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## ian (Jun 18, 2016)

AltaRed said:


> There may be cultural differences here that make approaches to such matters vary. I have seen far too many real life examples of beneficiaries partying life away by the time the bodies get cold, including families that appeared initially to be harmonious and aligned. All I can say is good luck with the roll of that dice. It may, or may not, play out.


I belong to the 'trust but verify' club. My preference is always to have everything nailed down in plain writing. Probably attributable to my working career. This tends to remove emotion and incorrect assumptions from the equation. And serves to eliminate or minimize the expectation gap.


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## twa2w (Mar 5, 2016)

Some thoughts on charities. Make sure you are very specific. A bequest to the United Church can be interpreted many ways. Is that the local parish, or the United Church of Canada. The same applies to charities like the "Cancer Society." Also provide alternates in case the charity no longer exists or has merged.

Be careful about setting out specific amounts. While this seems like a good idea in principal and many lawyers recommend this, what happens if you deplete a significant portion of your estate and there is little or no money left for those you really want to provide for, after paying out all your bequests and taxes. This can really a tricky situation with RIFs and RSP going tax free to some beneficiaries and the remaining estate being responsible for taxes, fees and bequests. Taxes and forgivable loans and early gifts can seriously screw up your intentions if not carefully planned and accounted for.

A better idea is to leave a % with a maximum proviso. i.e. leave 3% of my net estate, after all taxes and expenses are paid, to the XYC Charity, but not to exceed $50,000. Or 5% of my estate after expenses, taxes and fees to be split equally between the following charities if they are still active.... I leave it up to my executor in his full discretion to determine etc. etc.

It is also often better to gift the money now (or over a few years) to the charity while you are alive and you can use the tax receipt. If you don't have enough income, consider gifting to the charity in your child's name so they can take advantage of the tax receipt.


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## Nononymous (Jun 10, 2015)

On a related note, any suggestions for encouraging elderly parents to do a better job of organizing their affairs to minimize tax and probate burdens? It will be a moderately substantial estate, close to eight figures, equally divided between a house and various financial assets. The will is straightforward: first to spouse, then equally to two kids, but there are no trusts or any other structures in place. (The spouses are each other's beneficiaries and the house is jointly owned, so that's not a concern.) We are encouraging them to make charitable gifts now, in equities as that apparently avoids capital gains. But I'm curious about what trust (or other) options might be available to avoid BC probate fees and reduce capital gains taxes. I only know enough about this stuff to be dangerous.


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## AltaRed (Jun 8, 2009)

There is the spousal rollover at cost base if there is a surviving spouse, but there will be income taxes and probate fees upon 'last to die'. Probate fees are generally inconsequential (in most provinces) in the overall scheme of things so jumping through 'questionable' hoops like putting financial assets into JTWROS accounts with eventual beneficiaries have several pitfalls.

Charitable giving helps manage the tax bill by 'donating-in-kind' shares that have appreciated the most. It is far most tax effective to donate $X in a stock that has appreciated 200% than $X in a stock that has appreciated 10%. One gets the full tax credit for X$ while declaring no cap gains on that highly appreciated stock.

Trusts can have their place but: a) they cost money to set up and administer, b) they don't have advantageous tax rates and c) may prove impossible to unwind if needs change. This article may prove to be of some value. Trusts do not avoid the need to pay cap gains on appreciated assets. That is as much as I can contribute to your question.

In my view, it is much better if the owners of 8 digits in assets crystallize their gains over a number of years to mitigate income taxes.

For an almost 8 digit asset base, these folks need to hire the appropriate professionals to lay out the best options that fit their goals and objectives. If they are not willing/wanting to talk about it, let it be. I would not take kindly to my own children trying to give me Wills and Estate advice.


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## Nononymous (Jun 10, 2015)

I'm keenly aware of not wanting to push, but it's difficult not to be frustrated by a "pennywise and pound foolish" approach of refusing to do anything beyond the bare minimum. There might be pretty good ROI in the future beneficiaries paying for the advice and other costs, but yes, it's a delicate issue.


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## AltaRed (Jun 8, 2009)

Nononymous said:


> I'm keenly aware of not wanting to push, but it's difficult not to be frustrated by a "pennywise and pound foolish" approach of refusing to do anything beyond the bare minimum. There might be pretty good ROI in the future beneficiaries paying for the advice and other costs, but yes, it's a delicate issue.


Indeed, it can be extremely frustrating. One thought I found interesting (amazing?) is the assets being approximiately 50/50 between house and financial assets. With a net worth approaching 8 digits, that must be one hell of a house for elderly parents. Which may be the behavioural giveaway that they are entrenched in their views. 

Unless they willingly would consider the input of a tax professional, I think you may have to accept the leakage that comes with how the estate will unfold. There may be $500k or more of leakage that could be avoided with better estate planning but another way to look at it is.... does it really make any difference if you were to inherit $4M rather than $4.5M? I actually wouldn't get twisted out of shape about that. $4M is still $4M as compared to $1M or nothing at all. Let life unfold without recriminations or resentment.


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## Nononymous (Jun 10, 2015)

AltaRed said:


> ...one hell of a house for elderly parents


A modest bungalow in a very good location.

Anyway, thanks for the perspective. As much as anything I worry about they themselves realizing at some point that cheapness will come at a cost, but if that happens there will hopefully be time to correct the situation.


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## Nononymous (Jun 10, 2015)

One further question, answer needed to settle a bet, as it were. I understand that it is very advantageous to make a charitable donation with equities while still alive - large tax deduction for the donor, no capital gains owed by anyone. Is that same benefit available if the the stock is left to the beneficiary in a will, and donated from the estate? 

PS The probate fee in BC is 1.4 percent. That's not nothing on a moderately large estate. If you could avoid it, you'd have enough left over after the legal fees to buy a rather nice car.


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## kcowan (Jul 1, 2010)

Yes but the tax benefit is only claimed in the estate tax filing. This might be beneficial if there is tax recapture due to capital gains from RRIFs. But it will be up to your heirs/executor to do it.


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## Retired Peasant (Apr 22, 2013)

Nononymous said:


> large tax deduction for the donor, no capital gains owed by anyone. Is that same benefit available if the the stock is left to the beneficiary in a will, and donated from the estate?
> 
> PS The probate fee in BC is 1.4 percent. That's not nothing on a moderately large estate. If you could avoid it, you'd have enough left over after the legal fees to buy a rather nice car.


For securities donated in-kind in a will, the final return for the deceased does not pay any capital gains from ACB to DoD. The estate also does not pay cap gains tax (from DOD to donation date), and can claim the donation.
If you are so worked up about probate fees, move to Manitoba (0 probate there).


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## Nononymous (Jun 10, 2015)

Retired Peasant said:


> If you are so worked up about probate fees, move to Manitoba (0 probate there).


Zero probate where I am currently, but I'm not the one doing the bequeathing or executoring.


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## Retired Peasant (Apr 22, 2013)

You mentioned the probate fee of 1.4% in BC...??


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## AltaRed (Jun 8, 2009)

The biggest advantages of donating in-kind while alive (and getting a full tax credit) rather than after death (and getting a full tax credit) would seem to me to be: 1) reducing* Estate inventory valuation for probate purposes where probate is significant, 2) the satisfaction of giving while alive, and 3) simplifying (and ensuring) the carry back of the in-kind donation to the Final T1 Return (usually when capital gain have to be crystallized anyway on a last to die situation) and the preceding year before death to spread it out if that is advantageous.

The charitable donation is likely of most use in the Final T1 Return, not the Estate T3 tax returns since it is the Final T1 Return that would normally have the highest deemed capital gains.

* Not an expert so not aware if a carry back charitable donation can be deducted from the Estate inventory valuation for probate purposes. It may depend on whether probate is filed before, or after, the in-kind contribution has been made. That all said, probate fees should not be the tail that wags the dog. Too much is often made of probate fees which can result in poor decision making.


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## Nononymous (Jun 10, 2015)

Retired Peasant said:


> You mentioned the probate fee of 1.4% in BC...??


Yes. That is where the will is currently located. It's not my will.


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## Eclectic21 (Jun 25, 2021)

Nononymous said:


> I'm keenly aware of not wanting to push, but it's difficult not to be frustrated by a "pennywise and pound foolish" approach of refusing to do anything beyond the bare minimum. There might be pretty good ROI in the future beneficiaries paying for the advice and other costs, but yes, it's a delicate issue.


OOH ... I understand the frustration.

OTOH ... I keep reminding myself that it's someone else's money _and_ it's not worth souring the relationship. It doesn't stop me from once in a while putting in a reminder that the beneficiaries would get a better use of a bit now versus years down the road when they may no longer have a need.

Cheers


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## Nononymous (Jun 10, 2015)

Eclectic21 said:


> It doesn't stop me from once in a while putting in a reminder that the beneficiaries would get a better use of a bit now versus years down the road when they may no longer have a need.


We're not really that situation any more, thankfully, but rather it's case of the beneficiaries - children, grandchildren or the recipients of charitable donations - receiving more if things were better organized, instead of giving the money to the federal and provincial governments.


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