Beneficiary Designations 

In this age of increasingly complex life insurance policies, pensions, registered investment accounts, RRSPs/RIFs and TFSAs, beneficiary designations are playing an ever-more-important role in creating a complete estate plan. When a beneficiary is named directly in a policy or investment, the entire value of that asset will pass directly to the named beneficiary therein. This means that, for example, even if a person has a valid will leaving all of the assets to the children, an out-of-date beneficiary designation to a former spouse means that the named beneficiary will inherit that asset, regardless of the terms of the will. Many assets such as RRSPs/RIFs and TFSAs can qualify for a tax-free spousal rollover by which this deemed disposition can be postponed until the death of the surviving spouse. Beneficiary designations are an effective way of minimizing probate tax as the assets with beneficiary designations do not form part of the legal “estate” for the purposes of a probate application, i.e., probate tax is avoided on these assets. Ensure that all of your beneficiary designations are up to date, especially if you have experienced a life change such as divorce, re-marriage, the birth or death of a child.  Discuss with your lawyer how your assets will pass on your death, both through your will and through any beneficiary designations you have made.

Choosing an Executor

Being an executor is an important job and requires a significant investment of time and knowledge. It is important to appoint an executor as well as an alternate executor in the event the first named executor passes away, becomes unwilling or unable to act.  A spouse, children, other family members, trusted friends and even in some instances professionals may be considered for the role of executor.  Executors can refuse to accept the appointment, in which case these duties will fall to an alternate named executor or even result in the involvement of the Public Guardian and Trustee. Discuss your plans with your intended executor in advance to ensure that he, she or they are comfortable with the role, have the necessary skills, and are willing and able to accept the appointment when the time comes.