Wills and proper estate planning is something that very few of us want to talk about with our family – especially our parents. Mostly looked upon as a taking of inventory of a person’s possessions and finances, a Will can mean so much more and document everything from medical last wishes or charitable bequests, to who gets the family heirloom jewelry and antiques. It’s important to talk to your family, to share with them your important details, and ensure that they know and understand your basic wishes, who your executor is, and where they can find your important documents (Last will and powers of attorney).
As a financial and insurance advisor I’ve helped the families of clients who pass away through some of the most difficult times of their lives, and having your family aware of your documents and wishes is incredibly vital so that they can also seek out the assistance from the professionals they need.
When we ask a family member or friend to be the executor of our estate, there is often little consideration as to what is involved in those duties unless they’ve been through it before. Don’t make this decision lightly, and be sure that they understand what is required of them before they accept the post. Effective January 1, 2015, executor’s duties changed and are now far more involved, with the executor having a considerable amount more liability in accounting for the assets within your estate.
Under the old rules, an executor only had to estimate the total estate value. Under the new rule, the executor must file an Estate Information Return. The return outlines how the executor arrived at the estate’s value, which has to be filed within 90 days of getting a probate certificate. If the executor doesn’t file the return within the 90 days, he could be fined or go to jail. If he finds a mistake within four years after getting the probate certificate, he must amend the return within 30 calendar days.
This change has insurance providers offering Executor liability insurance, in case there are any errors in filing.
Are you the executor of a parents’ will? Many adult children become named executors of their parents wills, assuming that it will ease in the transfer of wealth and assets to the next generations. There are ways to limit probate, liability, and estate costs with the use of proper estate planning TODAY while your loved one is still able to make decisions, which will only help the transition when they pass away. Talk about how you can work together with an advisor to properly plan a smooth transition of your parents’ estate.
For more info on estates and probate in Ontario, click here.