It has been finally decided that the beneficiaries of late musician Prince are his siblings. His siblings will inherit his estate and his fortune.
You may be familiar with Alan Thicke as the star of the 1980’s hit television show, Growing Pains. The beloved Canadian actor passed away in December of 2016 at the age of 69, leaving behind a wife, two ex-spouses, and three children. Much like the battle over the estate of late actor Robin Williams, a contentious battle over the estate of Alan Thicke is heating up in the courts.
In an age where smartphones are often cited for causing distracted driving, addiction, and a number of other problems, it is interesting to read about how taking a simple photo of yourself through your smartphone can actually help you.
Lapetus Solutions Inc., a company based out of North Carolina, created a software program called Chronos, which is designed to predict life expectancy. This type of technology, the company claims, is valuable when it comes to purchasing life insurance.
The new October 2016 Federal Government Principal Residence Exemption (PRE) rules are causing many Canadians to review and revise existing Wills and Estate Planning strategies according to STEP (The Society of Trust and Estate Planners).
To track the capital gains that foreign buyers have been avoiding on the purchase and sale of Canadian residential real estate, the new federal rules have created complications for many Canadians who use Trusts and Qualified Disability Trusts (QDTs) as part of their Legacy planning strategies. (The following points are just some highlights and specific tax and legal advice will be needed for each individual situation.)
Under the new rules, notes Ian Lebane, a tax and estate specialist with TD Wealth Private Client Services, only three types of trusts are eligible to claim the PRE:
- Life interest trusts, which generally are trusts that would benefit from a rollover.
- Qualified disability trusts.
- A trust created for a minor child of the settlor (the person contributing assets or money to the trust, generally a parent).
In addition, the trust will only be eligible if the beneficiary is:
- A resident in Canada during the year.
- If the trust acquires property after October 2, 2016, “the terms of the trust must provide the beneficiary with a right to the use and enjoyment of the housing unit as a residence throughout the period in the year in which the trust owns the property.”
Regarding the trust terms, most existing trusts are not currently drafted that way, says Lebane, but for “any wills where the testator is still alive, they need to have that language.” Furthermore, each type of trust has its own beneficiary requirements.
Using one common planning example, where significant problem arise, involves life interest spousal trusts, commonly used in second marriage scenarios. It is only possible to claim the PRE “if the right to occupy is unconditional for the spouse’s lifetime.” Yet many such trusts place conditions on the spouse’s living in the home, such as the right to residency until they remarry or specifying that the spouse must pay for utilities and upkeep.
Even if the right is unconditional, the trust will be offside if it directs sale proceeds of the property to any other beneficiaries while the spouse is still alive.
People can only benefit from one QDT at a time, which can restrict planning. According to Lebane, It is common for one QDT to hold the principal residence and another one to hold the investments, which may force you to choose between using one or the other QDT for maximum tax planning benefits.
Lebane also recommends to use the preferred beneficiary election (PBE) for the investment trust which would allow the trust’s income to be taxed in the disability beneficiary’s hands, while leaving the home to qualify for the PRE.
Yet, in all cases, the beneficiary of a QDT must qualify for the Disability Tax Credit (DTC). If the intended beneficiary has not yet qualified for the DTC, yet, then you should initiate the process to qualify immediately, says Lebane.
Finally, in the case of minor child trusts, the new PRE rules are problematic. Current trusts often provide for the use of the residence if they are under age 18, but under the new rules, once a child turns 18 and leaves home to attend post-secondary schooling, the trust now becomes ineligible for the PRE, says Lebane. A valuable asset such as the family home can be a big responsibility for an adult child to own outright and may thwart the planning intentions of the deceased parents.
Another wrinkle, says Lebane, is the minor child trust is ineligible for the PRE if one parent is still alive, “regardless of the relationship with the child. The options for trusts for minor children are now quite narrow”, he says.
It is important for all Canadians to review their current Wills and Estate plans to ensure that the proper wording is incorporated within those documents to avoid taxes being charged on, what used to be totally tax exempt, principal residence.
Article provided by Iftikhar Mahmood. CFP.
He can be reached at firstname.lastname@example.org.
Certified Financial Planner, createwealth planning; Focused on the growth – and preservation – of your wealth
Please note: this article is not a substitute for legal advice. This article only provides general information which you may find helpful. You may wish to consult with a qualified professional financial or legal advisor, as appropriate.
Did you know that the famous rapper Snoop Dogg doesn’t have a Last Will and Testament? He has, in his own colorful language, brushed off the very notion with a terse “I don’t give a f___ when I’m dead.”
Snoop Dogg isn’t the only celebrity without a Last Will and Testament in place. After the death of the late singer Prince in 2016, the world was shocked to learn that he did not have a Last Will and Testament (his beneficiaries are still squabbling over his assets).
The death of a famous celebrity should not be what compels you to finish that all-too important document, but it should serve as a reminder of how important it is to complete your Will.
Alongside a Will, you should also think about the importance of a Power of Attorney and a Living Will.
You know what a Last Will and Testament is, but what are those other two documents?
My husband is very ill, and I need to manage our household expenses
A Power of Attorney document is integral to estate-planning. It is a document which designates a trustworthy person (e.g. a spouse, parent, child, etc.) legal authority over your finances, household expenses and if necessary, financial business decisions.
In what scenarios would this occur?
The most common scenario that usually comes to mind is using a Power of Attorney to take care of an elderly parent, but there are other scenarios you may not consider:
If you are driving to work one day and wind up in a horrific car accident, you may incur brain damage or slip into a coma. At this point, you obviously cannot communicate your wishes, and while the doctors are looking after you, who is looking after your expenses, your business and your household?
That is what a Power of Attorney document is for. You can appoint an individual (your Attorney) to manage your finances in the event you are unable to do so.
Do you for instance, want to grant someone else the power to open and close bank accounts in your name? Sell, own or buy property in your name? That is what a Power of Attorney allows you to do, and these are just a few of the situations a Power of Attorney covers. It is definitely something you will want to get done.
This document, once properly signed and initialized, comes into effect right away and operates while you are alive. A Last Will and Testament comes into effect after your death.
What is the difference between a Last Will and Testament and a Living Will?
My husband is very ill, and I will be in charge of his health
In the very same scenario mentioned above (the husband left comatose in a car accident), the difficulty lies not only in managing a spouse’s financial matters, but his ailing health as well.
A Living Will allows you to name an individual to make decisions on your behalf in the event you are unable to do so. A Living Will also comes into effect while you are alive and covers a number of situations, including: appointing a decision maker for your health related choices; appointing alternate decision maker(s); donating organs; specifying end of life care, and more.
Do you want a blood transfusion? Do you want your organs donated if you pass away? If so, for what purpose would you want them donated for? Would you want your organs donated for medical purposes or scientific research? A Living Will allows you to describe all of this in detail.
It is worth discussing all your wishes early on to ensure that you choose someone who will act on your behalf.
A paper trail
Obviously it is important to discuss these issues with family, relatives and other loved ones. A paper trail is just as important; authorities have to know what your thoughts and wishes are in relation to your health, finances, and your estate and assets. Having written documents in relation to your wishes is always a good idea.
A famous celebrity like Snoop Dogg may not care about his children squabbling over his money, but you may care about your loved ones having to deal with lawyer fees, administration fees, infighting and court hearings.
Not having estate planning documents for the future is a bad idea. Don’t be like Snoop Dogg or Prince. Start your estate planning documents today and be prepared for anything in the future.
The оnе person Donald Trump ѕауѕ he’ll nеvеr fіrе іѕ hіmѕеlf. Though he turnеd 70 thіѕ уеаr, thе rеаl estate and reality TV ѕhоwmаn insists thе thоught оf retirement nеvеr оссurѕ to him. “Mу fаthеr, whо wоrkеd untіl hе раѕѕеd аwау аt 93, uѕеd tо always say, ‘tо retire іѕ tо еxріrе,” Trumр tоld SmаrtMоnеу.соm. “And I feel thе ѕаmе way. I lоvе what I’m doing – and whеn you lоvе whаt уоu’rе dоіng, уоu dоn’t retire.” Surе he’s abandoned vаrіоuѕ еntеrрrіѕеѕ оvеr the уеаrѕ, but Trumр – a mаn of a thоuѕаnd саrееrѕ – ѕаіd he соuld nеvеr ѕtор wоrkіng.
Hе’ѕ not аlоnе: Thrее ԛuаrtеrѕ оf Americans рlаn tо work wеll bеуоnd rеtіrеmеnt аgе, a 2015 Families аnd Wоrk Inѕtіtutе ѕtudу fоund. Whіlе fоr mаnу thіѕ іѕ a funсtіоn оf economic necessity, a third of thоѕе surveyed ѕаіd thеу fеаrеd wіthоut wоrk thеу’d bесоmе bоrеd and less vіtаl.
Trumр ѕауѕ hе саn undеrѕtаnd whу mаnу of his frіеndѕ wоuld рrеfеr tо ride оff іntо the ѕunѕеt on a golf саrt, but claims he’d rаthеr рut up a new golf соurѕе thаn рutt оn оnе. “Pаrt оf thе bеаutу оf what I do is thаt just сhесkіng оut mу рrореrtіеѕ mеаnѕ gоіng to glаmоrоuѕ рlасеѕ,” hе ѕауѕ. “Thаt is wоrkіng, fоr mе.”
Not thаt thеrе’ѕ аnуthіng wrоng wіth not wоrkіng, Trump said. “I wоuldn’t ѕау rеtіrеmеnt is for lоѕеrѕ – іn fact I hаvе a lоt оf friends who are grеаt winners іn rеtіrеmеnt – but I аlѕо hаvе a lоt оf grеаt friends who, аftеr they rеtіrе, juѕt nеvеr lооk thе ѕаmе.”
Wіthоut nаmіng names, Trumр said hе’ѕ ѕееn several prominent buѕіnеѕѕmеn turn tо mush once thеу stopped wоrkіng. “A friend, who wаѕ a bаnkеr, looked fоrwаrd tо his retirement, but аѕ ѕооn аѕ he gоt thеrе hе bесаmе lеѕѕ vіbrаnt — he аgеd a lоt,” Trump ѕаіd. “I think реорlе wоuld lіvе lоngеr іf they kept wоrkіng.”
Kееріng active is keeping youthful, Trumр said. “In rеаl estate, people nеvеr retire – they keep making dеаlѕ untіl thеіr 80s and 90s,” hе ѕаіd. “Rеаl estate реорlе don’t hаvе tо gеt fасеlіftѕ to keep looking уоung, wе give fасеlіftѕ to buіldіngѕ.”
Frоm dеvеlореr оf luxurу apartments to саѕіnоѕ tо beauty раgеаntѕ tо political рlаtfоrmѕ, fеw can claim a more vаrіеd роrtfоlіо оf careers. “I dоn’t thіnk аnуоnе hаѕ been аѕ diverse as mе. I оwn Mіѕѕ Unіvеrѕе, Mіѕѕ USA. I own a lоt оf different companies,” he ѕаіd. “But thаt’ѕ nоt whу I don’t want tо rеtіrе. When you fіnd whаt уоu lоvе dоіng, you keep dоіng іt. Whеn уоu stop loving іt, then уоu rеtіrе.”
The musician known as Prince passed away in April of 2016, but the contentious battle over his estate and assets continues. Aside from numerous individuals proclaiming their lineage with Prince, there are also squabbling relatives arguing over how much the late musician’s assets are worth. It’s been estimated that Prince’s estate is actually worth far less than initial $300 million dollar fortune than it was originally valued at, and to make matters worse, without a Will in place, the estate tax costs are set to rise higher than expected.
Read on to find out why:
A Legal Will is a vital document for any individual. Here are 5 key things to know about making a Will:
1. You need to appoint someone as your Executor
An executor is the person who will carry out the terms of your Will. An executor is someone who you trust. In many cases, people appoint the beneficiaries of their estate as their executor. For example, a spouse, adult child or family member. It also makes sense to have a back up person as an alternate executor if possible in case the first executor cannot or will not carry out the duties.
2. You can change your Will at anytime
Many people put off making a Will because they think that they have to get everything perfect and that things can never change. On the contrary, a Will is a document that can be changed at anytime (even the second after signing it). Wills will frequently mention that they revoke former Wills. In addition, the latest Will is the one that would be valid based upon the date of the Will. So, there is no reason to put off making a Will. It is a good idea to put one together and then if it needs to be changed in the future, you can always change it. A far better and safer option than not having a Will at all.
3. You can appoint a Guardian for your kids in a Will
A Will allows you to appoint someone you trust to look after your children. This is one of the most important aspects of a Will because you are planning out your wishes on who you would like to take care of your kids in the event you are not around. You can also appoint alternate guardians as well.
4. Wills do not have to be notarized or prepared by a lawyer
Wills do not have to be written by a lawyer or signed in front of a lawyer or notary. On the contrary, Wills have been prepared for centuries based on some consistent characteristics that need to be included in a Will. A Will made by yourself and witnessed properly is a legally binding Will. If you have an overly complicated situation, you can always go to a lawyer but it is not required.
5. You should review your Will regularly
Many people make their Will and then forget to think about updating it as their life circumstances change. Some of the factors that require a review of one’s Will may include:
- An executor or beneficiary has died
- A birth of a child
- A change in personal relationships
- A change in one’s assets
Everyone should review their Will at least annually to make sure it is still consistent with their wishes.
The death of Prince should come as no surprise to anyone who has been watching the news. What may come as a surprise is that Prince’s fortune had dwindled from an estimated $300 million to a mere $150 million. Not only is that amount surprising but the fact that Prince (who no doubt had access to many lawyers and financial advisers) did not leave behind a Last Will and Testament is rather shocking.
Or is it? We’ve all heard the stories of many celebrities who have died without a Will; other celebrities in the past (i.e. Amy Winehouse) have died without a Last Will and Testament. The death of celebrities intestate have lead to family squabbling, hefty estate taxes and extra administration on the part of these loved ones. It’s appearing that way with Prince’s siblings, as their initial meeting after their brother’s death did not go well; tensions were in the air as the siblings allegedly squabbled and yelled among each other as to how the assets and estate of Prince should be divided.
Read more about Prince’s Legacy and Fortune.
The government of British Columbia recently announced a “Make your Will week” running from April 10 to April 16th 2016. The government emphasizing the importance of individuals creating your own Will should not be lost on people who procrastinate on making their Last Will and Testament.
It’s always best to have a Last Will and Testament under any circumstances, but if you already have one, you may want to consider making changes to your Will during these particular times:
When you are considering moving to a new province or territory;
When you are either expecting or have just had a child;
Any particular time when major life circumstances change.