Estate Planning – A Follow Up

By Martin Rumack

April 9, 2019

#realestate, Toronto

In last year’s newsletter, I wrote an article about the ways to minimize the value of your assets as part of your Estate Plan, to decrease the amount of probate fees and income tax paid by your estate upon death. The article also pointed out some estate-planning pitfalls that can result from a lack of information.

Recently I was made aware of a situation involving an elderly person who, upon becoming unable to look after his own financial affairs, arranged for one of his adult children to be added to the bank account as an “owner” (This was in addition to having limited signing rights in the role of Power of Attorney for Property for his father). The adult child did not advise the bank at the time that his father had been assessed by a qualified medical professional as being incapable of making sound decisions of any nature –which the banker should have investigated given the father’s age.

After the father died, the adult child commenced writing cheques to himself, as well as withdrawing funds from a bank machine for his own use. When the bank was notified of the death, the bank’s position was that since the account was registered not only in the father’s name but also in the name of the adult child, the bank could not freeze the account.

Needless to say, this caused significant strife and rancor amongst the siblings. What is the take-away from this situation? Be extremely careful in who you appoint as Powers of Attorney and as Estate Trustees on your behalf!! You should consult a lawyer in this regard.

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