I see it all the time – people look on Google, find something that seems to make sense, and follow it through without getting advice from a professional. And then, when the action they took turns out to not have the same result in the place where they live as it did in the place where the blogger or journalist lived, they end up paying way more than they would have to just leave things be. Here are some common ones:
- Not naming a backup beneficiary for life insurance or registered investments. It’s great if you’ve named your spouse, but what if you die at the same time? Naming an alternate (or contingent) beneficiary means that this money will pass outside of your estate, and not be taxed.
- Gifting property (including adding a child to your deed). Always, always, always get advice from a lawyer and accountant before doing this. There are more dangerous than can be stated in a blog post.
- Designating registered investments through your will. This can be set up properly, but there is a specific way to do it – if you’re not using a lawyer, you can run into a lot danger, and end up with taxes owing on them because they accidentally pass through your estate.
- Putting severe restrictions on inheritances in a will. More often than not, they’ll be found to be invalid.
- Leaving assets to minor or disabled beneficiaries without setting up trusts. They could squander the money, or they could lose valuable benefits. It’s always best to have a professional do your will; it’s vital if your beneficiaries need any assistance at all.
This is a complicated area of law. Be careful.