Without a will, provincial law decides how your estate will be distributed and that may be very different from what you want.
Usually, your spouse receives a certain amount of your estate, and the balance is then divided among your spouse and children. Portions for children under 18 will probably have to be paid into court.
If you don’t have children and if you aren’t married, everything will usually go to your parents, brothers or sisters.
Do you want the courts deciding how your farm or small business is divided up?
Instead of you deciding how your estate is shared, the government takes control of your estate and will make all the decisions on how your assets are distributed. The government’s logic and process of distributing your assets may be significantly different than the approach you would have taken.
Canadian Farm Statistics
According to the 2012 Statistics Canada census, in 2011, there were 293,925 farm operators in Canada. Classified by age, 48.3% of them were older than 55. That’s up from 40.7% in 2005. So, the aging of Canada’s farm population is advancing rapidly and by the next census well over half of Canada’s farm owners will be over 55.
Total capital tied up in land and buildings alone of all farm operators came in at over $200 billion in 2011. This does not include capital related to farm machinery and equipment, livestock and poultry and savings and other investments. It’s conceivable then that more than $100 billion of those capital assets are in the hands of our 55+ aging farm population.How does one provide for the orderly transfer of those assets to the next generation without a will? A proper estate plan includes a will and outlines how you would like your assets and other financial affairs to be distributed to your heirs.
Set up correctly, your estate plan will ensure your estate is settled as quickly as possible and in the most cost-efficient manner to avoid or minimize the costs and delays of probate.
Estate planning also takes into consideration any mental or physical incapacity that leaves you unable to manage your own financial and health affairs. A designated Power of Attorney can help ensure your wishes are carried out.
Depending on the type of assets in your estate, there may be a “deemed disposition tax” that could seriously disrupt the financial lives of your surviving family.
Invariably, the cost of letting the government decide how to settle your estate will be far greater than seeking legal, tax and financial advice on how best to set up a will and estate plan that will meet your family’s needs.
The earlier you begin the process you increase your flexibility to structure your affairs in the most advantageous manner. Life insurance could provide needed funds to cover any capital gains owing on the sale of a farm or business at death and could also provide funds for equitable distribution of the estate should one of your heirs decide to carry on the family business.
Should you be looking for legal assistance to complete your will, FBC has forged a partnership with a leading Canadian legal firm, Miller Thomson, to offer preferred pricing on legal services for our Members.