The Estate House

The Death Channel

Some German television producers recently announced that this fall, Eos-TV, a cable channel focusing on aging and dying, will launch in that country. 

As the producers have partnered with the national funeral home association to bring the channel to fruition, there is an obvious "sales" bent to the programming that is going to be offered.  In fact, the producers have been very up front about their hope that educational-type shows on life insurance, funeral insurance, and home care services will be sponsored by companies who offer those services.  Whether they will influence the content remains to be seen.

As an additional revenue stream, Eos-TV will also offer families the opportunity to create a 30-second televised obituary.  For the low low fee of 2400 Euros ($3454CDN), the obituary will air 10 times on Eos-TV and will be available as video on the channel's website, as well as the websites of various funeral homes.

The producers' rationale for this channel is simple: Everybody dies and everyone at some point is affected by death.  Is there a lot of information out there?  Sure.  The challenge will be for the information and programming offered on Eos-TV to stay objective and not influence viewers to a course of action based on who is paying the channel's bills.

Cottage Conundrum

We're well into July and that means lake season.  Many of us are going to be spending at least some time at a family cabin/cottage (depending on which part of the country you're from).   Maybe it's your family that owns the cottage, but often this vacation refuge is Mom & Dad's  or Grandma & Grandpa's and has been in the family for several years, even decades.   

There can be significant conflict if the succession of the family cottage is not dealt with well in advance of the owner's death.   Siblings or cousins may get into arguments about any number of things, including who gets to use the cottage when, who is responsible for payment of any taxes or restocking supplies, and who is responsible for maintenance of the property.   If you are a cottage-owner and are trying to figure out what to do with the property when you die,  there are a number of things you should consider.

If you plan to leave your cottage to all of your children in equal shares, you'll need to think about how you want them to own it.   Should they own it jointly, with the right of survivorship to the other siblings?  Or should they own it as tenants-in-common, with the right to sell their share with a right of first refusal to their sibling?  How can you ensure that inheriting part of the family cottage won't make it subject to potential matrimonial property actions between your children who are getting a divorce?   

Once you've determined ownership, then it is a good idea to set out ground rules for usage of the property.  How should we determine which weeks each child and their family gets exclusive use of the cottage?  Is extended family allowed to use the property?  How will we make sure that the property is maintained, the taxes paid, and supplies restocked?  The sooner you set out these ground rules, the better.  Your kids might be more inclined to follow them after you're gone if they knew that it was how you wanted it.  Some options include having the summer divided into two week blocks and each child takes turns determining which blocks they want (i.e. if I picked first this summer, Sister picks first next summer), or setting up a board structure, complete with a treasurer, to make sure there's someone responsible - and someone to hold others responsible - for following the rules. 

Planning what happens to the cottage is kind of planning for succession of a business.  You shouldn't wait until you've died for the plan to jump into action and the earlier you start planning, the happier your family will be. 

RCMP Burial Dispute

Tomorrow, Constable Leo Johnston, one of the four RCMP Mounties murdered at Mayerthorpe, Alberta on March 3, 2005, is scheduled to be disinterred from his original burial site at Lac La Biche, AB and moved to the cemetary at the RCMP depot in Regina, Saskatchewan.  This request was made by his widow, Kelly Johnston.

Constable Johnston's mother, Grace Johnston, is very distraught over the impeding move, which she only found out about this past Friday.  Since then, she has contacted her MLA , the Solicitor-General, and even the director of Service Alberta to help her stop the disinterment.   She has also hired a lawyer to get an injunction against moving the body.

Unfortunately, if Kelly Johnston is the administrator or executor of her late husband's estate, there is probably little that Grace Johnston can do to stop her son's body from going to Regina.  As I have stated in previous columns, the executor is the one who makes the final call on funeral and burial arrangements.  Kelly may, however, be personally responsible for the costs of moving the body, rather than Constable Johnston's estate. 

The public policy reasons for this are sound.  Someone needs to be designated as responsible for making the final decision on funeral arrangements, otherwise families could dispute the arrangements for months, or even years! 

An update will follow once this issue has been decided.

Making Sure There's Enough to Go Around

Most people have an idea of who they would like to be the beneficiaries of their estate, whether its family members, friends, or charitable organizations.  One essential part of the estate planning process is ensuring that there will be enough money left in the estate to provide for their beneficiaries as much as they expect it to. 

The way most estates work is like this:  First, your debts get paid.   This includes any taxes (including capital gains and income tax), funeral expenses, legal fees associated with the administration of your estate, and other debts or loans that survive your death. 

Second, any specific bequests get paid out.  This includes things like, "$10,000.00 to my favorite charity" or "$5000 to each of my grandchildren" .

Finally, once all of the debts and specific bequests are paid, then the rest - or residue, as it's commonly known - gets distributed to the residual beneficiaries (i.e. the "everything else I leave to my three children" clause). 

Most people want the residual beneficiaries to receive most of their wealth, or at least a substantial sum.  However, because everyone else gets paid out first, you need to ensure that there will be an adequate residue left in your estate. 

Since taxes, and particularly capital gains taxes, can mean a big chunk of your estate goes to the government, you should be sure to consult with both a lawyer and an accountant to determine ways to minimize your tax bill.  Charitable donations in your will, for example, will result in a tax credit to your estate.  Even better, if you give your executor the power to fulfill a  bequest to charity by donating public securities, you will not have to pay any capital gains that have accrued on those securities. 

It's all worth checking out before committing yourself to an estate plan.