Many individuals are not aware that once they pass away and their will is probated, it becomes a public document that anyone can read. All anyone – and I mean anyone – has to do is pay a fee online and your will (the inventory of your assets at death, the list of beneficiaries of the will, as well as the gifts they received) is provided on any computer screen.
Personally, I think that this is a violation of privacy, but until there is some change in legislation there are very few things that can be done about it. I will provide a solution in a moment but first consider the implications of the lack of privacy.
First, I think that reading someone’s will is similar to reading their mail. Friends, neighbours, and strangers alike can all see who your beneficiaries are and the value of all gifts.
Second, it is rare that every beneficiary receives an equal amount. This can lead to disputes between beneficiaries and the Executor; and such real (or perceived) differences can lead to damage to family relationships or even lawsuits.
Third, lawsuits arising may drain the value of an estate significantly. It is also possible that the legal bill of both the Executor and the disputing beneficiary could be payable by the estate, meaning that the likelihood of a beneficiary launching such a lawsuit is increased. What do they have to lose?
Finally, such disputes can cause a significant delay in settling the estate, which means all beneficiaries suffer. Such circumstances can cause a nefarious nuisance claim to be paid just to get rid of the dispute so that other beneficiaries can receive some share of the estate.
My favourite solution to these problems is to employ an Alter Ego Trust (AET).
An AET is a private document and does not go through probate. It maintains the privacy of the estate in full. Strangers, neighbours, and friends do not see what the beneficiaries receive. Nor does each beneficiary see what the other beneficiaries receive, thus allowing for an uneven distribution of assets which often occurs in families.
Further, the Trustee (who has the same role as Executor) can only be challenged if a beneficiary proves that fraud has been committed and then a judge will review the trust and prescribe a remedy while maintaining the privacy of the AET. Proving fraud is incredibly difficult to do and the legal bill to initiate such a claim must be paid by the disputing beneficiary.
Because of these benefits, AETs result in far fewer disputes and more expedient settlement of estates. That said – AET’s are not for everyone. Consult with your advisor before proceeding, or call our office to learn more: toll free 1-888-725-6991.
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This article was prepared solely by Larry Short who is a registered representative of HollisWealth®, a division of Industrial Alliance Securities Inc. (iA Securities), a member of the Canadian Investor Protection Fund (CIPF) and the Investment Industry Regulatory Organization of Canada (IIROC).The views and opinions, including any recommendations, expressed in this article are those of Larry Short alone and not those of HollisWealth®
BComm, CPA, CGA, CIM®, CFP®, FCSI
Portfolio Manager & Executive Director, Private Client Group
In Short: Secrets to Make Your Dollars Grow
HollisWealth® is a division of Industrial Alliance Securities Inc. (iA Securities), a member of the Canadian Investor Protection Fund (CIPF) and the Investment Industry Regulatory Organization of Canada (IIROC). iA Securities is a trade name and business name under which Industrial Alliance Securities Inc. operates. This information has been prepared by Larry Short, Portfolio Manager for HollisWealth®, a division of iA Securities, and does not necessarily reflect the opinion of iA Securities. The information contained in this document comes from sources we believe to be reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces where he is registered. For more information about HollisWealth®, please consult the official website at www.holliswealth.com . ShortFinancial is a personal trade name of Larry Short.
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