Tuesday, July 22, 2014

Estate planning for disabled beneficiaries

One of the estate-planning goals often stated by the parents of disabled children is to provide for the children without causing them to be cut off from provincial government benefits. Achieving that goal may involve pulling together several pieces of a puzzle, including the will, trusts, RDSPs, and possibly more.

I recently found the attached article at www.fromyouradvisor.ca, which goes into quite a bit of detail about planning around the Ontario Disability Support Program (ODSP). It's a pretty thorough discussion, and even talks about what happens when another family member leaves money to a disabled child, disrupting your carefully laid plans. Click here to read it.

Although this article specifically talks about ODSP, it is also useful for parents who live in other provinces. There are important variables, of course, because the dollar limit allowed varies very widely from province to province. However, the discussion regarding RDSP and Henson trusts will still be very valuable.

Alberta residents, please note that Henson trusts are not available in your province, though they are everywhere else in Canada.

I would like to clarify one sentence in the article. It describes a Henson trust as follows: "It’s an absolute discretionary trust that doesn’t allow the beneficiary to access any extra amount beyond what’s predetermined." I think that sentence might be a bit confusing. The author is correct in saying that a Henson trust is absolutely discretionary. This means that in any given tax year, the beneficiary might receive income from the trust or he might not, and if he does, the amount is up to the trustee of the trust. Therefore I find it somewhat contradictory for the author to refer to an amount that is predetermined. An absolutely discretionary trust won't predetermine how much is to be paid.

Monday, July 21, 2014

Pleased to have made the Personal Finance Guru list

Thanks to Cory Papineau for including me in his Top 25 Personal Finance Gurus in Canada list! I'm honoured to be on this list along with so many people that I respect and admire.

(via Twitter)

Tuesday, July 15, 2014

Editor-in-chief runs for mayor of Vancouver

I would like to introduce my west coast readers to Kirk Lapointe, who is the publisher and editor-in-chief at the company that  has published five of my books. Kirk has announced his intention to run for mayor of Vancouver. I can't vote for him, as I live on the other end of the country, but I can let you know that he is great to work with. Click here to read more. This picture of Kirk was found on www.self-counsel.com.

Monday, July 14, 2014

Nine estate planning tips to avoid family strife

Since avoiding family strife is one of the key goals of all the estate planning I do, my attention was caught immediately by the title of this article from www.wealthmanagement.com. The nine tips on the list are all very good suggestions. Being tips, they are necessarily short summaries of important information and not lengthy essays, but they are still worth a read. Click here to see the article.

Sunday, July 13, 2014

Executor's failure to provide requested information leads to contempt of court

One of the topics I see frequently in the comments and questions left for me by the readers of this blog is that many executors are reluctant to provide information to the beneficiaries. That reluctance varies from simply being slow to respond right through to an executor being hostile and violent. As I've said many times before, I honestly don't know why executors insist on being so secretive and controlling. It always works against them.

I'm posting a link to a story from Ontario lawyers Whaley Estate Litigation in which an executor took this too far. He refused to provide information about estate assets after numerous letters, and a court order to produce it. Eventually the beneficiaries charged him with being in contempt of court. Unbelievably, even then he would not produce the information. Click here to read the story and find out what happened to this executor.

It seems clear that an  awful lot of executors don't really understand what is expected of them when they are put into this role. What they think they know is cobbled together from some internet reading, some anecdotes from friends, their recollection of what happened in a family member's situation, and a large dose of outright guessing. Executors, take the time to find out how to stay out of trouble. Pick up a copy of my latest book, called How Executors Avoid Personal Liability.

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