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Tuesday, May 11, 2021

Don't want the shock of unexpected estate outcomes? Follow these tips.

CBC has reported on a Halifax case in which a deceased man's RRSP is going to his mother rather than his wife. Tim Taylor passed away with a will leaving everything to his wife, Diane. However, his RRSP, which held $685,000, named his mother as his beneficiary. Here is a link to the story with much more detail.

This is a huge shock and a huge loss to Diane, as you can imagine. However, any estate lawyer could have predicted that outcome. We all know that wills don't include money passing outside the estate. 

Diane is calling for greater protections so that this doesn't happen to other people. On one hand, I can see her point because some people really don't seem to do anything to look after themselves. On the other hand, an adult person has the right to leave his funds to whomever he wishes. Diane is saying it is a mistake and that Tim meant to change that beneficiary designation, but did he? How many years were they married? Is is possible that at no point during their time together they looked even quickly at their banking documents? Perhaps I'm just playing Devil's Advocate here, but it's possible that Tim - or other people in a similar position - made a choice that others don't necessarily like.

There are things you can do to ensure that you or your loved ones don't end up with a terrible shock like this when someone passes away. They are:

1. Don't make a home-made will. There are experts in these things so accept that there may be people out there who can do a better job of it than you can.

2. Don't listen to the people who say paying a lawyer for a will is too expensive. I guarantee it will cost less than the $865,000 it is costing Diane to find out about an oversight when it's too late.

3. Only accept a will from a lawyer who goes through your assets including joint ownership and beneficiary designations and makes a document that works with these assets. If your lawyer does not review all of these things with you, get a different lawyer. 

4. Check your beneficiary designations TODAY. Check your RRSPs, your RRIFs, your insurance policies, and your pension.

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