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Report provides revealing statistics on wills in Canada

Life can quickly become overwhelming. Often people in Canada are so focused on the present, they may not see a need to focus on the future, including creating a will. While there are a variety of factors that delay people from creating wills, a recent report by the Angus Reid Institute reveals some information that may be surprising to some.

According to the report, the majority of Canadians have no will in place. Of those who do, 35 percent claim that their will has not been updated. Some claim that they have not gone through the process because they do not believe that they have a large enough estate to warrant the creation of such documents while others believed that they were too young to do so.

Tax rules governing gifts, inheritances and estate administration

There is an old adage that says there are two certainties in life -- death and taxes. When it comes to estate administration in Canada, those two things play a large part as well, death for obvious reasons and taxes because inheritances and gifts, in some cases, may be considered taxable. There is no inheritance tax in Canada per se, but there are still some taxes that will affect the deceased person's estate and his or her beneficiaries.

In terms of gifts, land is taxed differently than cash. Getting land from anyone other than a legal spouse is considered taxable. Whether it is sold or not, it will be considered sold at a fair market price and the beneficiary could be on the hook for paying a capital gains tax. When a deceased person leaves his or her heirs property, it is also considered to have been sold at fair market value whether or not that is actually the case. Taxes will apply.

Estate administration: Beneficiaries in multiple jurisdictions

In this technological world, things change at a rapid place and people can get from one side of the world to another in no time. Many people don't stay in one place for long. When it comes to estate planning and estate administration in Canada, it might be wise to know how the rules change for those beneficiaries named in wills who change locations a lot and perhaps even marital status. When there is more than one jurisdiction involved, beneficiaries would be wise to find out how to manage taxes and assets in various provinces or countries. 

Even terms like spouse or dependent could take on different meanings, depending upon the area in which those terms are used. For instance, it could mean a dependent merits financial support in one jurisdiction, but not in another. Interpretations of the law can vary from locale to locale, especially internationally.

Personal and healthcare directives in wills in Canada

When people are no longer able to make decisions for themselves, yet still want some control over what happens in their lives, having a health care or personal directive drawn up may be the answer. Wills in Canada can incorporate such directives, which will appoint someone to make healthcare decisions on their behalf should they not have the mental capacity to do do. Generally speaking, a power of attorney is the same thing. 

A healthcare directive does not necessarily appoint a substitute decision-maker to make healthcare decisions for a person, nor does it appoint a personal directive to make financial ones. In a healthcare directive, a person indicates the healthcare treatments that can and can't be used on them if they can't make those decisions for themselves, rather than having someone else make those decisions on their behalf. The person can name someone to act as as a proxy to make those decisions, in which case the document is akin to a personal directive or power of attorney.

Power of attorney: Incapacity planning in British Columbia

There may be times when decisions pertaining to someone's estate have to be made by other than the estate holder. Someone named power of attorney could act in that capacity -- a relative or good family friend. British Columbia residents could name whomever they choose to make decisions for them. For instance, a power of attorney could cash a cheque on behalf of the principal should he or she be out of town.

Many times, however, it is incapacity planning which requires the appointment of a substitute decision-maker. No one likes to think about not being able to make decisions for him or herself, but planning for something that may not happen might be wiser than not having anything in place should something unforeseen take place. Doing so will be less stressful on family members since all decisions made would be in line with the wishes of the person granting the power.

British Columbia estate administration: Plans for the family home

Estate planning is something people do to make things easier on their families once they have passed on. If all the i's are dotted and the t's are crossed, estate administration should go smoothly. The one big thing in a British Columbia resident's estate plan is the family home and it is one with sizable worth, there may be some things testators can do to ensure the family home can be passed down while keeping the family peace.

If adult children are the heirs of their parents, then it is likely they have homes of their own. In such cases, the executor of the will could sell the home and distribute the proceeds to the beneficiaries of the estate. There might be a chance, however, that one child may want to keep the home. Parents might do well to discuss these things before planning their estates. An executor who isn't a family member may be a wise decision if someone anticipates problems arising.

Estate administration: Dealing with a cross-border estate

There are some Canadians who own property stateside. Many snowbirds purchase property in the United States and when British Columbia residents who own such a property die, estate administration could get dicey. Executors of wills could find themselves in a pickle if they aren't familiar with cross-border tax laws and/or regulations regarding reporting.

The federal estate tax on a U.S. estate applies to worldwide assets of any estate worth in excess of $5.34 million. The same is not true for Canadian estates. There are different rules in the States regarding probate as well, which could be more costly and proceed more slowly than in Canada. Executors must wait for a court day in the United States before anything can be done with the will. One other significant difference between the two countries when it comes to estate administration is that tax payments due to the government in the United States come from the estate; however, if the executor doesn't file it, he or she could be held liable.

Can wills made in British Columbia be revoked?

Many people state clearly in a will what they would like to have happen after they die. British Columbia resident fashion wills to state what should happen with their assets and their belongings and anything else having to do with their death such as funeral arrangements. Every province and territory in Canada has laws protecting the writers of wills, also known as testators. These laws are fairly consistent and protect testators' wishes.

But there are instances when the contents of a will comes into question and when there could be cause to find it invalid. To be legal, a will must be in writing, signed at the bottom by the testator and have two witnesses, although there may be exceptions to this rule. Some provinces recognize holographic wills which are written in a testator's hand, but British Columbia is not one of them.

British Columbia estate administration: Debt and death

Like it or not, debt is a big part of modern life. Most homeowners carry mortgages, many people have car payments and some people carry balances on their credit cards. But when it comes to estate administration in British Columbia, what happens to all the debt -- and rewards in some cases -- after a person dies? Most people believe their loved ones will be on the hook for their debts, but that's not the case.

The fact is that any outstanding debt will be paid from a deceased person's estate before beneficiaries receive what's left. There is one exception. If someone has signed on as a guarantor of someone's debt, that person would be held responsible. There are some instances, too, when an asset cannot be touched by a creditor. These include any life insurance policies or a Registered Education Savings Plan opened for someone.

Wills can spell out who inherits digital accounts in B.C.

Living in a technological age, most people have social media pages on sites like Facebook, Twitter and Instagram. All these sites need passwords to access. What happens if tragedy should strike and the owner of the pages dies? British Columbia residents can make provisions in their wills as to who looks after their digital accounts when they die.

It could be the person designated to look after the estate, perhaps a spouse or a family member. However, if the deceased person does not mention his or her digital assets in a will, the one who inherits the estate may have a problem when it comes to trying to access any accounts. Ownership of digital assets is not that clear cut. Often, the service provider is the one to control it. Sometimes, in the fine print of these sites, service providers will indicate that the deceased doesn't own the rights to online material, in which case digital assets may not be transferable.

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