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Wills - General


Disclaimer

The following is no substitute for advice provided by a lawyer specifically for you. It is intended only to help you understand that advice. No responsibility is taken for any problems arising except due to paid legal advice.

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Table of Contents

  • What is a Will?
  • Why make a Will?
  • Formalities
  • Essential Positions
  • Basics
  • Executor
  • Trustee
  • Guardian
  • Residuary Beneficiary
  • Specific Beneficiaries
  • Estate Planning
  • Gifts
  • Insurance and Pensions
  • In-laws
  • Charities
  • Common Disasters
  • Tax Deferred Property
  • Trust Provisions
  • What is a Trust
  • Powers
  • Interim payments
  • Types of Investments
  • Storage of your Will
  • Wishes
  • Property Inventory
  • Possible Blocks on Your Intentions
  • Not your Property
  • Specified Beneficiaries
  • Held Jointly with Rights of Survivorship
  • Held by a Privately Controlled Corporation or Trust
  • Planning to not own property
  • Capacity
  • Family Property Act
  • Dependents
  • Change in Marital Status
  • Other Related Planning
  • Business Interests
  • Living Wills
  • Power of Attorney
  • Inter Vivos Trusts
  • Life Insurance

  • What is a Will?

    A Will tells the court who to appoint to have power over your property, and tells that person what to do with your property. It also sets out who shall receive any rights of access or guardianship you may have. At your death, your property will become a legal person called an estate.

    Why make a Will?

    Without a Will (an 'intestacy')

    If there is no Will, there must be a slow, expensive process to appoint an Administrator and prove that there is no Will. This means a special application to prove to the court that nobody with a better claim to do it who wants to do it, and usually requires the posting of a 'bond' as security. In certain circumstances, this could amount to thousands of dollars of expense. Until that is done, nobody can legally do anything with your property which can mean delay destructive to your property or hard on your dependents.

    The Intestacy Act then sets out how the property will be divided. Essentially, there are degrees of kinship. If any people exist within a closer degree of kinship, they take. It is generally considered fair, but there are many exceptions and special cases, which do not come out the way you would intend.

    Here is an example. Say you leave $500,000.00, and are survived by two children, a separated spouse not living in adultery, and by two children of your dead child, two brothers, a father, various cousins, etc. In this case, the spouse would take $200,000.00, and the two surviving children would take $100,000.00 each, the two grand children would take $50,000.00 each, and nobody else would get anything.

    If any of the property was to go to somebody incapable, perhaps because they are under 18 or mentally challenged, then the Public Trustee would take the property until they become capable, if ever. The Public Trustee charges an administration fee, is very restricted on what types of investments are available, and usually requires people to get a court order to make any kind of payment in the meantime.

    From a lawyer's perspective

    The main reason to make a Will is to avoid the expense and delay of an intestacy. Any time you have property in the control of some other person or body, like the Land Titles Office, a stock broker, a bank, etc., you should have a Will.

    From a financial perspective

    A Will enables you to take advantage of certain tax and investment decisions and to avoid any necessity of the Public Trustee becoming involved which can mean expense and delay. A lawyer should have a general familiarity with these issues, but for advice on them, you should see a Chartered Accountant or a Financial Planner.

    From a personal perspective

    A Will is your last chance to help your family, because only you know their unique needs and abilities.

    Formalities

    Our office will ensure that the Will is properly prepared and signed so as to be legally effective. Some common pitfalls for lay people are choice of witnesses, improper signing, improper amendments, improper evidence of attestation, etc.

    Essential Positions

    Basics

    Be sure to name at least two people to each of these positions, either as alternatives (e.g., "to John if he survives me, otherwise to Fred") or as survivors (e.g., "to John and Fred, or the survivor(s) of them").

    Additional alternatives are possible, but not necessary, since you are urged to immediately update your Will if any of the people you nominated for these positions becomes inappropriate or unavailable. Having an alternative is merely intended to buy you some time to do so.

    When we give us instructions to draft your Will, be sure that each person's name is correct, and that their relationship to you is specified. We normally refer to their present address, if available, for the sake of certainty.

    You can't force anybody to take these positions, so you should make sure they are willing to do so.

    Executor

    This person does the business of the estate. She, he, or it, will arrange the funeral details, hire the lawyer, gather the property and debts, and transfer the property to the Trustee.

    In descending order of importance, consider the factors of trust worthiness, business skill, proximity to the property, and likely fees. Don't be 'diplomatic' with this appointment. Express your love with your gifts. Express your judgment with your choice of executor. Be honest. You may be forced to choose a professional to achieve these goals, such as a lawyer or trust company.

    Trustee

    This is the person who holds the property and cares for it between the time the Executor transfers it from the deceased to the estate, and the time it may be transferred to the beneficiary.

    In nearly every case, the Trustee and the Executor should be the same person, to avoid involvement by the Public Trustee. You might wish them to be different, where the property will be held for a long time in another location, such as where the children will be raised in another province. Your executor could be local, and the trustee could be close to the children. Having a different trustee than executor might be a further safe-guard on the honesty of each, but if you are that concerned, it would be better to re-think your choice of executor.

    Guardian

    If you have any rights of custody or access to another person, or if you hold guardianship of a person or their property, you can pass on those rights in your Will.

    Just as with the alternate choices for the other positions, even if you have no such rights, name at least one choice for Guardian, so that if your situation changes, you have bought some time to change your Will. Even if you are past the child bearing years, you may wind up with such rights over a child from another family, or if you wind up looking after a grandchild.

    No matter what you say in the Will, the Court has final say over children or incapable people. Other people can apply to change the custody or access. However, naming a Guardian will make your wishes known, which will carry a lot of weight, and it will govern the immediate transitional arrangements, which is very important to the people being cared for. Further, once a situation is established, the courts do not lightly interfere.

    Your choice of Guardian should be governed by love and respect and shared values. Look forward, to how they will treat those they guard, rather than only back to how they treated you.

    Often the Guardian will be the same as the Executor/Trustee, especially if that is your spouse. Making the Guardian different than the Trustee will often have the effect of calling more on the Guardian's resources to look after those they guard, even if the Trustee has the authority to pay for their maintenance. Some find that desirable, some do not.

    Residuary Beneficiary

    This is the person(s) who gets 'the rest' of your property after all the debts, expenses, and specific gifts are paid. This should be the person getting the biggest share.

    Specific Beneficiaries

    This is optional. Most Wills don't even have Specific Beneficiaries. This is for when you want to give some specific item to some specific person.

    There are two dangers. If the specific item is changed somehow, perhaps sold, destroyed, de-valued, traded, altered, etc., then there may be an argument on the effect that has on the gift. We suggest that unless there is a very good reason, specific gifts should be void if the property ceases to exist.

    The second danger is that if there are many specific gifts, it may make your gifts disproportionate. Your residuary beneficiary may get too much or too little, after the passage of time changes the relative value of the specific gifts to the rest of your estate.

    There are no easy solutions. If you use proportions instead of items and amounts, you may over or under meet the needs of the beneficiaries. Frankly, our advice is to keep the Will reasonably simple.

    Estate Planning

    Gifts

    There is no legal advice for this. You must consider what you want to achieve, and consider your property and your family. Dealing with an even hand avoids hurt feelings and reduces the chances of litigation, but Shakespeare's "King Lear" illustrates some problems of following this approach blindly.

    Insurance and Pensions

    In other provinces, such as Ontario, people routinely re-designate their beneficiaries for their insurance and pensions, with a clause in their Wills. In Saskatchewan, you may do so only with insurance and only if the policy permits it. Rather than take a chance, we don't advise attempting this.

    In-laws

    Some people want to keep property in their 'blood family'. If you specifically express your desire in your Will when you make a gift to a person, that it is for their benefit only and not the benefit of their spouse, then the spouse of that person will probably not succeed in having it declared to be divisible matrimonial property. Otherwise, they probably would succeed.

    Charities

    We have a directory of registered charities which you may read if you are interested.

    Common Disasters

    The danger is that a person named in your Will will die or be incapacitated shortly after you, perhaps from being with you in 'common disaster', like a crashing vehicle. In such an event, for years, different Acts provide different assumptions as to who died first, if the matter was uncertain. For instance, use the example of two spouses, who each intend to leave everything to each other. The danger is that all the property of the spouse who died first (or is assumed to have) will have to go through their own estate and then be given to the estate of the other spouse (adding unnecessary costs), and then, likely, distributed entirely to that spouse's side of the family.

    We draft our Wills to avoid this scenario.

    Tax Deferred Property

    In General

    Some types of property are carrying a hidden tax liability. Normally, they will be taxed at the time of death. This may change the value you intended to give. In some circumstances (see your accountant), you might be able to achieve a 'roll over', in which case the tax will continue to be postponed, to be eventually paid by the beneficiary. But in that case, an unsophisticated beneficiary may be caught in a disastrous surprise. Further, sometimes it is better to have it taxed at death, to take advantage of special tax advantages available at that time.

    Again, see your accountant. He or she can tell you what is available and desirable. The lawyer can make it happen.

    R.R.S.P. Rollovers

    The funds in an R.R.S.P. are waiting to be taxed (tax-deferred). If it is cashed in, then taxes will be deducted. However, there are certain 'roll overs' available, such as to spouses and children who are still minors or dependent. In such a case, the beneficiary would take the R.R.S.P. intact. It would be taxed only when the beneficiary chose to cash it in. Only a lawyer should attempt such a clause.

    Capital Gains Rollovers

    Some assets, mostly capital assets (used to earn income or gain), must be declared as a form of taxable income (capital gain), when they are 'disposed' (their ownership changes).

    At death, Revenue Canada says there is a 'deemed disposition' at fair market value. In other words, it forces us to pretend that the goods were sold by the deceased to the estate at market prices. Then, if those market prices are higher than what the deceased purchased the assets for, then the deceased must declare the amount of the increase as a 'capital gain' and probably pay tax on it.

    Further, if the deceased claimed tax deductions for depreciation on the asset, then the amount depreciated will be taxed as income, not as capital gain. This is called 'recaptured depreciation'.

    Trust Provisions

    What is a Trust

    A trust is when one person (the trustee) has legal title to something (owns it legally), for the benefit of another person or group (the beneficiary). The Beneficiary is considered to have equitable title.

    In general, you make a trust when you won't or can't do something yourself that you want done, and/or when you want to give something to somebody, but can't do so. Perhaps you want to continue to control it to some degree, or perhaps the recipient is incapable of owning property (children and/or some mentally challenged people).

    A 'trust' may be drafted to achieve any goal, and each goal can be achieved in many ways. Please consult with us on how to achieve your goals.

    Powers

    Our standard trust provisions go into great detail permitting the trustee to conduct business to manage the property of whatever type. This is to protect the trustee. If your Will doesn't specifically authorize an act, then your trustee will be legally able to accomplish it, but will be liable to compensate the estate for any losses which result. If it is authorized, then the trustee is only liable if the act was careless or improper.

    Interim payments

    Purpose

    The trustee cannot use the trust property for anything except to pay to the beneficiaries at the proper time after they become capable, unless your trust specifically permits it.

    Since most trusts are designed for children, and children have financial needs before they can legally take the property, we advise that you allow the trustee to pay out for other purposes. For children, one popular wording is to permit the trustee to pay out for "the maintenance, education (including higher vocational and university education), and the business and professional advancement or benefit" of the beneficiary.

    Payee

    Even if you authorize a Trustee to make interim payments for a particular purpose, you must still say to whom they can be made. Must it be to the beneficiary (probably a child) or to the Guardian, or to some other party in direct payment of the expense?

    We recommend that you select a good Trustee and permit them to make payments in any of these ways.

    Income/Principal

    The traditional law was that only the income generated by the trust property could be paid out. The original trust property ('principal' or 'capital') could not be touched. This is best for either very large or very small estates, which were typical of the medieval times in which the law developed. A very small estate could be used up before the beneficiary got anything. If one uses more than the income from a very large estate, one is probably using too much. However nowadays, most estates are mid-sized, such that the income may not be sufficient to meet all the possible reasonable needs, but the estate will likely not be all used up even if the trustee occasionally touches the principal. We recommend that the trustee be permitted to use the principal in mid size estates, but not in small or large estates.

    When to pay

    Age

    You can postpone payment beyond the age of majority. There is a conflict between choosing an early payment when your beneficiaries will need it most, and a later payment, when they will use it best.

    We recommend a later age, with fairly generous powers to a well selected trustee to make interim payments.

    All at Once or Separately

    Most traditional trusts are drafted so that the trust is paid out when all the beneficiaries reach the specified age and are also all capable. This helps to ensure that they all receive proportionate shares, no matter how or when the value of the trust property rose and fell.

    Further, if paid out separately, the last beneficiary may be able to apply to the court for immediate payment, collapsing the trust. Special legal drafting can reduce this danger, or the danger of other attempts to collapse the trust.

    If you have selected an age at which you want them to get their property, we suggest that the Will pay each beneficiary separately so that each gets their proportionate share as they need it the most. If the last beneficiary is so sophisticated they can collapse a trust, they can probably handle the property.

    Types of Investments

    Under the Trustee Act, there is a list of permissible, safe, investments, which may be made with trust property. That list is very old and does not include some safe investments which offer better returns.

    We advise you to not extend the limited list, unless you have a very sophisticated but careful trustee, in which case you should remove that restriction entirely.

    Storage of your Will

    Your Will is your property.

    You may register it at the Court. We think that is too expensive and time consuming to justify the benefit.

    You may keep it in a safe place yourself. We can't and wouldn't criticize how you keep records, but we do point out that we have a system in place for storage of Wills, and that when a Will is lost, the usual advertisement for it is in the Law Society Journal which goes out to lawyers.

    We will keep it for you at no additional charge, which we recommend. You would keep a copy where it would be found. That copy should refer to the original Will kept here.

    Wishes

    Some desires are not legally enforceable. They may be included in your Will, but run the risk of undermining its effectiveness. If they are to be included, they should be specifically stated to be mere wishes.

    Such unenforceable wishes might concern disposal of your body, use of the property not amounting to a trust, personal advice, etc.

    We suggest that you instead deliver these wishes from time to time to the proper person who is likely to carry them out. We are happy to keep them on the file if you like, to ensure that they are received by the executor, at no additional charge.

    We suggest that if you wish to distribute small, personal items, you make a list, or mark the items, realizing that it is not enforceable, but that your residuary beneficiary will probably honour it. Note that the executor doesn't have the power to give away this property. Since the residuary beneficiary is entitled to it, only s/he may decide. You can't delegate your power to make gifts.

    From our point of view, one important wish is what legal representation you wish the estate to have. We do take note of this wish.

    Property Inventory

    This does not belong in your Will, since the Will ought to remain effective even as your property changes. Nor do we suggest any attempt to give away your property on an item by item basis. As set out above, we suggest giving only a few, if any, specific gifts, then giving 'the rest' to at least two choices for residuary beneficiaries.

    As pointed out below, a property inventory might be useful to prove your mental capacity, but more important, it will be useful for the financial planning aspect of Will making. It will also be very useful in actually administering the estate. Every year, huge amounts of money go to the government because accounts have been overlooked. There is no registry of accounts for executors to check and there is little obligation on banks to check on what happened to their depositors. Having a current inventory will speed the administration of the estate, and decrease the chances of missing anything.

    We recommend that you periodically provide us with property inventories which we will place on your file for no additional charge.

    We can provide Inventory forms if you desire, but we suggest you contact a Financial Planner or Chartered Accountant

    Possible Blocks on Your Intentions

    Not your Property

    Specified Beneficiaries

    If you have, prior to your death, designated a beneficiary for some right (e.g. pensions, annuities, life insurance, RRSPs, RRIFs, etc.), then those benefits will go directly to the beneficiary, and never become your property. If it doesn't belong to you, you can't 'will' it.

    Held Jointly with Rights of Survivorship

    Another way property can fall 'outside' your 'estate' is if you held it jointly with somebody else, and they had 'survivorship rights'. Upon your death, they get it no matter what. The usual places this happens are with real estate held in joint tenancy instead of tenancy in common, and with joint bank accounts.

    However, do not assume that all jointly held assets carry rights of survivorship. If this is part of your estate planning, be sure. We can advise you on this, if we are provided with the pertinent documents.

    Held by a Privately Controlled Corporation or Trust

    An error often seen on Wills drafted by lay people is an attempt to 'will' property owned by a private corporation. Even if you are the sole shareholder and act as all of the officers and the only employee, the corporation's property does not belong to you. You can 'will' the shares in the corporation and your lawyer can help you take other measures to achieve your intentions.

    Planning to not own property

    Sometimes you want the property to stay 'outside' your 'estate'. It will somewhat reduce court and legal costs. It may get to the beneficiaries faster. However, you will have put a lot of thought into the planning of your Will, particularly about trusts, and that will be wasted. If the pension or insurance issuer will permit it, naming a beneficiary as "the residuary beneficiary or beneficiaries named in my Will on the trusts and terms of my Will, as my Will may be amended from time to time" is a fairly good compromise.

    Capacity

    Your Will must be made while you are in your right mind, and not under any duress, in the special legal senses of the words. Mainly that means you must want the Will to say what it says, and that you understand the nature and extent of your property and family and the effect of the Will.

    To defend against such attacks on the Will, it is wise to tell your lawyer about each type of property you have and about any family member who is getting less than is consistent with their degree of kinship. If you think there might be any concern, a doctor's certificate can be obtained.

    Supplying a Property Inventory may provide evidence of your mental capacity, or lack of it. The lawyer will have no way of knowing whether it is inaccurate and calls for a medical certificate.

    Family Property Act

    In Saskatchewan, spouses own their own property. There is no such thing as community property. However, the Family Property Act gives both spouses the right to ask a judge to re-arrange all the ownerships of the property. The Act lets a spouse do so for a short time after the death of the other spouse.

    Since 2001, 'spouses' can include cohabitants. Generally speaking, if people have lived together more than two years, they may be considered spouses. It is a complex definition. Consult your solicitor.

    A Family Property application is not really an attack on the Will, but on what you own. If you don't own it, you can't 'will' it. So the Will can't defend against this. If there is a spouse who might do this, get a divorce, an order under the Act, or an Interspousal Agreement.

    Dependents

    Dependents can include spouses, children under the age of majority, or 'adult children' who are dependent in fact. The Dependent's Relief Act gives them the right to apply to the court to change your Will if you didn't make 'reasonable allowance' for them.

    If you considered their welfare and made some provision for it, the court will usually not interfere, even if it is unusually small, as long as it is not unreasonably small. If you ignored them or cut them out, their application may succeed.

    Change in Marital Status

    A divorce will normally revoke any nominations of your former spouse. A marriage will normally revoke the Will. However, in either case, you can specify that your Will is intended to survive such a change in status.

    Of particular concern is the new definition of 'spouse' which applies to cohabitants, as explained above. So, you can accidentally revoke your Will by living with a person.

    Other Related Planning

    Business Interests

    Property held by your corporation does not belong to you. It requires special legal handling in the corporate law area to ensure your intentions are met.

    If you are in business with others, there ought to be a Partnership Agreement or Unanimous Shareholders Agreement which will contain terms which take effect upon death. Your partners will not want your beneficiaries forced on them as a new partner, and you will want your beneficiaries to receive a proper compensation for your share of the business. If such an agreement already exists, you and your lawyer must be aware of its effect. If there is no such Agreement, it is strongly recommended that one be drawn up.

    If you are in business by yourself and especially if you are a professional, you are strongly advised to consult a lawyer about options for arranging a transition of the business which doesn't destroy the value of the business. Incorporation is often ideal if you want to pass on the business intact. This especially applies to family farms.

    Living Wills (Health Care Directives)

    A Living Will, more properly called a Health Care Directive, is a different type of document. It is intended to control the type of medical treatment given to you when you are incapable of deciding or communicating, and/or to designate somebody to make those decisions.

    The legal effectiveness of such documents is not clear. Although they are provided for by state, if a doctor gives you a treatment you forbade, what is the result? If you are cured, it is hard to imagine a court ordering the doctor to pay you damages. If not, you would not have been cured anyway, so what are the damages? However, hospitals and doctors are generally respectful of these documents.

    Yet there is no registry or other mechanism to ensure that hospitals can find a Living Will. Delivering one to your family doctor is the best bet.

    The standards offered by the medical profession focus on what specific treatments are desired and rejected. For instance, see the documents from the Centre for BioEthics.

    We question the wisdom of designating specific treatments in advance. First, people often think much differently when actually confronted by a situation. Many healthy people state they would prefer to die than be crippled, yet the percentage of disabled people who commit suicide is very small. Second, it is the result of the procedure and not the procedure which interests most people. Being placed on total life support is fine if it is necessary to get back to normal, but not so good if intended as a permanent result.

    The aspect which designates somebody to speak for you is the best part of the concept, in our view. You must carefully ensure that person shares or respects your opinions on treatment.

    Power of Attorney

    This is another type of document. It makes somebody your Attorney (agent) to do specified business in your name. If you are unavailable, for any reason, it can be a great convenience. Many of our younger clients are preparing them for this reason.

    However, you must have absolute confidence in your Attorney (who need not be a lawyer). Their power to deal with the property will often be equal to your own. If you have such a trustworthy person, we recommend a Power of Attorney even for young people.

    For older clients, we strongly recommend that Powers of Attorney be prepared. The chances rise that you will become mentally or physically incapable. If it happens, your property and affairs must still be managed in the meantime. If you have made no arrangements, then a court order must be obtained, which can be slow and expensive. Worse yet, when a court order is issued, you lose your own power to deal with your property.

    A Power of Attorney is inexpensive, convenient, and, best of all, revocable.

    Inter Vivos Trusts

    Inter Vivos Trusts are trusts given during life. They are good for estate planning, but more expensive than Wills. For instance, I have low flat fees on the Wills, but just charge by the hour on Trusts and estate planning. However, they have the potential to save dozens of thousands of dollars in taxes, or even more.

    A trust is a legal entity, so you have to be careful about filing tax returns if necessary every year. If you arrange for the beneficiaries to declare all the income, then no return has to be filed.

    One good application for people who want the kids to have everything when both spouses are dead, is to create a life trust. In this way, the property goes to the trust, provides for the spouse during her life, then goes to the kids.

    In general, people liked them because they could keep some control, and avoid having the property change hands too often, thereby saving some expense. However, the law then limited the duration of trusts, with a brain boggling 'rule against perpetuities', which is "life in being plus 21 years". So, for long term stuff, corporations are a better choice.

    Another good result of the life trust is income splitting. If the investment income is taxed in the hands of the trust, then it won't shove the other income of the beneficiary into a higher tax bracket.

    The thing about trusts is that they aren't supposed to be a sham. The way they test if it is a sham is to look for a genuine loss of control.

    It should be noted that the government department, The Public Trustee, can demand to review the handling of any Trust, and if unsatisfied, take it over or take other measures.

    Life Insurance

    Life insurance is a common estate planning tool. In my view, its best use is the simplest, to provide for necessities. Will your dependents have enough to live on in acceptable comfort even if you die soon? If not, then buy life insurance.

    A hidden necessity is the tax on capital gains. If you give a large asset which has appreciated, then tax on its growth is a large hidden liability. It is already owing, but the bill only comes due on your death (unless you can 'roll it over'). In that case, if there aren't enough liquid assets in your estate to pay the tax, the estate will be forced to sell some of the assets you intended to give, which you might have been wanting to avoid, such as selling family farm land. Or it will be a burden on your beneficiaries who may have to borrow just to pay the tax so they can get the gift intact. However, farm land has many ways to roll it over, one of which is into a family farm corporation, which is a better solution than paying for insurance to pay for the capital gains tax.

    At any rate, once you have enough assets to provide for necessities, you don't need the life insurance anymore. You are 'self insured'.

    However, the cunning devils at the insurance companies conjured up another scheme in order to sell policies even to the wealthy, who are after all, better customers. Their scheme is to help you avoid taxes. The idea is that if you save up a desired amount, you have to invest x and earn y in order to get there. If y is interest, you pay income taxes on it. If y is capital gains, then that is taxed upon death. The idea is that instead of investing the money, you buy insurance with it, for x plus a portion of what would have been the cost of the taxes. In essence, the scheme is to take the money away from the government, and split it between you and the insurance company. Setting aside whether the insurance is more deserving than the government, insurer's like to take the lion's share of the savings.

    One of the usual schemes is that you agree to pay a fixed amount which they invest for you. They pay the insurance premiums out of this investment fund. You don't get taxed on the earnings in this fund. But they don't often warn you that if the investment doesn't cover the premiums, you must pay extra. You hope it will eventually reach the point where it is self-supporting and you won't need to contribute more.

    You have to dig into their figures to figure out how much that actual premium is turning out to be. Is it competitive with other life insurance?

    You have to be very skeptical of their figures. Make sure their assumed returns are the same for when you are investing and when they are. Make sure to consider scenarios of high, middle, low, and negative growth.

    They like to consider probate costs as another saving to their scheme. But of course, not every estate needs probating. It is true that big estates generally do, but we can help you plan how to avoid triggering that requirement.

    On the bright side, if you die young, you win. Well, except for the dying. Just like all life insurance. And if you live long, you lose. Just like all life insurance.

    The really bad thing is that the premiums are gone. With an investment, you can liquidate and use it for yourself. They often compensate for this by providing loans against the insurance, or permitting you to withdraw the part that has not been applied to premiums.

    This scheme is far better for children than spouses, because RRSPs and RRIFs and so forth can be rolled over without triggering payment of capital gains to the spouse. And of course the income is protected from tax while inside the registered fund.

    Even for children, most children would far rather receive the premiums now than some huge payoff when they are probably retired themselves.

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