Costly mistakes of poor estate planning

 

Costly Mistakes of Poor Estate Planning

Estate planning and the distribution of assets can be a complex process. Without proper planning there could be several unintended consequences. It’s important to have a carefully crafted and well documented plan in place.

Example: A parent wants each of her two children to receive an equal share of the inheritance. One child is named beneficiary to a $500,000 RRIF account and a second child is named beneficiary to the $500,000 estate.

• RRIF funds bypass the estate and is paid direct to the beneficiary
• RRIF assets are considered taxable income in the year of death
• The Estate is reduced by final expenses such as taxes, probate fees, debt and other expenses
• The beneficiary of the Estate receives significantly less than the beneficiary of the RRIF

Be sure to contact your lawyer ensure your wishes are properly documented