So tell me about wills.

[Fuzzy14]

Inter Vivos Trusts (living trusts) have a lot of uses, and I implement them in my planning for clients frequently. However, they are by no means a "you've gotta have this" planning tool, and in some instances, are going to be more trouble than they're worth (initial planning and setup cost, annual maintenance, trustee fees if using a third-party trustee).

Since 2016, the feds have made significant changes to the taxation of trusts which took away a lot of the tax benefits of having one (mainly income splitting). However, some practitioners such as myself still view them as valuable planning tools; you just have to be able to look beyond tax and administration costs.

Whether it's a good idea really comes down to asset mix. Though we don't have probate fees of any magnitude in Alberta, many estates will end up having to sink some money in with lawyers to probate an estate, which can be significant depending on the value of the estate and the arrangement reached with that professional.

In some cases, folks will like the added privacy of a living trust, as they may allow you to bypass probate (remember, that most court proceedings are accessible to the public). In others, an individual who sees a dispute between beneficiaries on the horizon may wish to settle an inter vivos trust in order to head some of that risk off early (insofar as it is possible to do so). There is also the asset protection elements of trust planning which, for some folks, is critical.

Finally, folks with children who suffer from disabilities should explore trusts to ensure that they are missing out on some very important planning opportunities.

As Troutman outlined above, for the average person, a well drafted set of estate documents (Will, EPA and PD) with a qualified and licensed practitioner is more than adequate. In some cases, some clever probate planning can allow you to avoid the need to probate and the significant legal fees that can arise without needing to settle a trust.

[Fuzzy14]

For God's sake, spend the money and use a licensed professional to prepare your estate planning documents.

signed - a legal professional who has successfully sued "experienced" non-lawyers for significant sums for providing will preparation services to individuals who thought they were safe because "the person had done it a lot and wills are simple".

[Sliver]

Originally Posted by troutman

No one should assume their estate is simple. Legal advice is essential.

Yeah and I'm sure big lawsuits, divorces, weird corporate stuff can get really pricey, but I've always found wills, POAs, Personal Directives, and real estate legal stuff to be ridiculously cheap for the value offered.

I was even talking with my lawyer on the last thing we did on how cheap his services are compared to the realtor's. It was actually to do with my mom's house after she died...the real estate agent was hesitant to list right away because of probate, but my lawyer added some verbiage into the contract and I was able to sell the house before probate cleared (basically the buyer could move in and I became her landlord for a brief period with her renting from the estate or something like that). Probate ended up clearing a couple days before possession, so I didn't actually have to become her landlord, but his advice allowed me to keep the estate rolling when my realtor had told me we'd be on hold. And I paid her thousands and him a few hundred bucks.

[calgarywinning]

Originally Posted by Fuzzy14

Inter Vivos Trusts (living trusts) have a lot of uses, and I implement them in my planning for clients frequently. However, they are by no means a "you've gotta have this" planning tool, and in some instances, are going to be more trouble than they're worth (initial planning and setup cost, annual maintenance, trustee fees if using a third-party trustee).

Since 2016, the feds have made significant changes to the taxation of trusts which took away a lot of the tax benefits of having one (mainly income splitting). However, some practitioners such as myself still view them as valuable planning tools; you just have to be able to look beyond tax and administration costs.

Whether it's a good idea really comes down to asset mix. Though we don't have probate fees of any magnitude in Alberta, many estates will end up having to sink some money in with lawyers to probate an estate, which can be significant depending on the value of the estate and the arrangement reached with that professional.

In some cases, folks will like the added privacy of a living trust, as they may allow you to bypass probate (remember, that most court proceedings are accessible to the public). In others, an individual who sees a dispute between beneficiaries on the horizon may wish to settle an inter vivos trust in order to head some of that risk off early (insofar as it is possible to do so). There is also the asset protection elements of trust planning which, for some folks, is critical.

Finally, folks with children who suffer from disabilities should explore trusts to ensure that they are missing out on some very important planning opportunities.

As Troutman outlined above, for the average person, a well drafted set of estate documents (Will, EPA and PD) with a qualified and licensed practitioner is more than adequate. In some cases, some clever probate planning can allow you to avoid the need to probate and the significant legal fees that can arise without needing to settle a trust.

For some reason this is the most epic post on CP. This advice is cheaper then when I signed up for Netflix for 9.99.

[DoubleF]

Originally Posted by Royle9

My parents are starting to look at updating their wills, and my father has been asking about “living trusts” vs a will due to apparently having more control with the trust and the government not able to take as much if anything at all.

Whereas with a will so much is taxed and owed by the beneficiaries that it can be quite overwhelming to see all the assets become worth so little.

Is this true? Is there anyone on here who would be considered an expert in this category that could explain it to me like I’m 5.

I’d rather they not go spend what they were quoted to update their wills if a living trust is the better option.

The answer is it depends. Is a $250K car a lot of car and awesome? Hell yeah! Is it a great car for a 85 year old as a daily driver? Uhh... I dunno.

It's a pros vs cons thing and situational for each person as well. If it works great, it works awesome. If you don't need it, it's a complete waste of resources and bigger headache. TBH, the trusts are typically more important for safeguarding assets vs tax advantages IMO.

Rules for trusts in Canada have been modified a bit in the last few years. Not all of the tax advantages have been left intact, but many of the capabilities of the trusts seemed to have amplified. Don't forget the 21 year rule though.

A lot of people have higher requirements than they realize and could absolutely take advantage of a trust. I've also met people with family trusts that I have no clue why they have a trust because it complicates everything going on vs helps everything that is going on.

[Fuzzy14]

Originally Posted by calgarywinning

For some reason this is the most epic post on CP. This advice is cheaper then when I signed up for Netflix for 9.99.

I will be sending my bill to your DMs