Some Estate Planning Mistakes to Avoid

Having a will is one thing – however, having a will that is done right is something different.  As a recent article in the Globe and Mail points out, it can be difficult to fix your will once you’ve died.  Some frequent estate planning mistakes that are made include the following:

  1. Not communicating with professional advisors – it’s one thing to have a lawyer do your will.  However, if you don’t fill in your investment or financial advisor regarding the contents of the will, it’s possible that you may undertake financial planning steps that undermine the estate plan. 
  2. Unduly obsessing over the probate fee – in Ontario, there is an estate administration tax which must be paid if an executor obtains probate.  While it’s never fun paying taxes, this one is relatively small (generally about 1.4% the value of the estate).  There are estate planning steps that can be taken to reduce (and sometimes completely avoid paying) the tax, however they can carry negative consequences.  It’s important to make sure that any steps taken to minimize the probate fee are worth the potential risks.
  3. Giving inadequate consideration to the choice of executor – even the administration of a simple estate can be time consuming and stressful.  Things only get worse if the wrong person (or people) has been named as executor.  Family dynamics are often to blame when an estate administration turns sour – particularly when the named executors are family members (often siblings) with a contentious relationship. 
  4. Not reviewing estate planning documents – circumstances change and over time an estate plan can become out of date.  It’s important to review a will to ensure that the distribution scheme still makes sense.  Some things to consider include whether there have been any births, deaths, marriages, or divorces since the will was made; whether there are any special family circumstances (such as common law relationships, step-relatives, or adoptions which should be taken into account); and whether the assets owned at the time the will was made continue to be owned. 

Now that September is here, it’s a good time to review your will and make sure you’re happy with what’s in it…and if you don’t have a will, it’s a good time to see a lawyer and have one made.

Comments (1)

Read through and enter the discussion by using the form at the end
S.A. - September 8, 2011 12:39 AM

Yes, I do agree with all your points, and the big mistake i made is not reviewing my estate planning documents! I see you have got some great article and worth bookmarking!