Prevent estate battles

No matter how well you craft your estate plan, ex-spouses, disgruntled business partners, estranged children and misguided family members can still challenge your wishes after you’re gone. Informing beneficiaries of your intentions ahead of time can help you identify possible problems beforehand.

Bulletproofing an estate against potential disputes is a serious concern, says Dana J. Nelko, partner at Fillmore Riley LLP in Winnipeg. However, challenging a will is not easy.

“The courts are reluctant to set aside what the testator has said—those are his last wishes,” Nelko notes. “Manitoba courts can only set aside certain bequeaths where a financially dependent spouse or child’s financial needs, for example, have not been properly considered.”

That said, if the mental capabilities of the testator are in doubt, courts will jump in.

“Roughly 90% of the challenges you see to wills in Manitoba relate to issues of capacity or undue influence,” he says. “If the court is satisfied the person didn’t know what he was doing when he executed his will, or his affections were poisoned, or he was unduly influenced to put in provisions, the court will set [it] aside.”

For people in the early stages of dementia, independent capacity assessments may help clarify their positions. But for someone in better health, they may have the opposite effect by raising questions about their cognition needlessly.

For those intent on unequal distributions to close relatives, Caroline Abela, partner at WeirFoulds LLP in Toronto, recommends drafting a memorandum of wishes in conjunction with your will.

“It [can] explain, for example, why one child received 95% of the business and the voting shares while the other child only received 5%—because Child Number One has been involved in the business for the last 40 years,” she says.

Still, Abela says the most effective solution may be communication. By informing your heirs well ahead of schedule, you can often diffuse conflict before it begins—or at least get an idea of who’s likely to initiate a challenge.

“Often the issue is not that an unhappy beneficiary will wreck havoc, but rather that the beneficiary who perceives there has been unequal treatment does not say anything until after the testator’s death,” Abela says. “[One of] the reason[s] to meet is to help illustrate the fact that the unhappy beneficiary had an opportunity to express himself—but chose not to do so.”

Although such meetings may be uncomfortable, it could be a small price to pay for the peace of mind that you’ve faced challenges now instead of leaving your estate plan to chance after you’ve gone.