Estate Planning: Easy Steps That Make the Difference (Part 2)
Sometimes, it seems to be too early to plan for the unexpected. As a result, we underestimate the difficulties our significant ones can face down the road in case of our sudden illness or a life-threatening incident. In part 1 of this article we discussed property management and personal care instructions and touched upon some general rules of succession (you can read more here). Here we will talk about digital assets and property of minors.
3. Think about your “digital assets”
Monthly withdrawal authorizations, cloud file storage, online access to banking and point reward programs, social media and email accounts, messengers, personal pages and websites are now so ingrained in our lives, that it’s time to include them into our estate planning strategies. This is particularly true considering that there is no unified approach as to what happens to digital information in case of death or incapacity of its owner. For example, Facebook, Google or Twitter allow users to authorize another person to access their accounts under certain circumstances, others let users leave instructions in case if bad things happen, while some services may refuse access to a third party absent a court order.
Keeping these issues in mind, you may want to tell your significant ones about your “digital assets”, appoint a “trustee” or leave instructions to your provider on how to deal with your information after a long period of inactivity or in other specific cases.
4. Think about assets you are planning to leave to minors
In Alberta, anyone under 18 is a minor. People often wish to name minors as beneficiaries under their will, insurance policy, pension plan, or registered investments. Sometimes minors inherit property pursuant to the intestacy provisions of the Wills and Succession Act.
While there can be valid reasons for leaving property to minors, there are some limitations to consider. For example, minors cannot personally receive and manage their money and property – only a trustee can do it in their best interests. A properly drafted will or instructions to insurance policies, pension plans or investments appoint a parent, other individuals or entities as private trustees for the minor’s property and set limits on its management, disposition and release to the child. If there is no private trustee or a minor receives property or money pursuant to the intestacy rules of the Wills and Succession Act, and the value of these assets exceeds $10,000, the Public Trustee receives and manages the assets for the minor’s benefit. To substitute the Public Trustee, a parent or other person can apply to court to be appointed as a private trustee. The process of appointment is time-consuming and not always predictable. Moreover, the court can impose limits on management and disposition of the minor’s assets, require from private trustees to provide some form of security and report regularly about how the assets are being administered.
Where Public Trustee administers the minor’s property, the child generally receives it after he/ she reaches the age of majority. On the one hand it is a simple and reliable way of managing the child’s property. On the other hand, it limits the child’s benefit from the property and return on investments. Also, the release of assets by Public Trustee right after the child attains the age of majority bears some risks since a young person can lack the know-how to handle significant amounts of capital.
I hope this information is useful for you. Next time, let’s talk about mitigation of conflicts between our significant ones in difficult times.
The content of this article is intended to provide a general guide to the subject matter and should not be considered as legal or other professional advice. To get detailed information regarding your specific circumstances, please discuss your situation with the author or another lawyer.