The Wealthy Barber Podcast - #32 — Leanne Kaufman: The Do’s and Don’ts of Estate Planning

Episode Date: November 18, 2025

Episode #32 is out now! Our guest this episode is Leanne Kaufman — President and CEO of RBC Royal Trust, the division of RBC that helps Canadians with estate, trust and incapacity planning/professional administration. Leanne is a lawyer by training and is extremely knowledgeable about all things estate planning in Canada. In this conversation, Dave and Leanne dive deep into the fundamentals of estate planning — why every Canadian needs a will, the real cost of getting one and what qualities make for an ideal executor. They explore tricky questions like whether you should choose a family member as your executor, if co-executors are ever a good idea and why keeping a “When I Die” binder can spare your loved ones a world of stress. From corporate executors to cottages (and the conflict they often create) to the risks of joint ownership and the scenarios where trusts actually make sense, this episode covers the most common estate-planning pitfalls Canadians face—and how to avoid them. Whether you’re creating your first will or updating your entire estate plan, this episode is packed with practical advice, clear explanations and guidance every Canadian should hear.   Show Notes (00:00) Intro & Disclaimer (00:55) Intro to Leanne Kaufman (02:34) Why Everyone Needs a Will (05:01) How Much Does it Cost to Get a Will? (07:29) What Qualities Does an Ideal Executor Have? (13:28) Should You Choose a Family Member as Your Executor? (15:46) Co-Executors: Yay or Nay? (18:06) The Importance of a “When I Die” Binder (20:33) Should You Keep Old Wills? (22:05) What is a Power of Attorney? (26:52) Why Dave Doesn’t Like Co-Powers of Attorney for Personal Care (28:39) When Do POAs Take Effect? (30:56) Name Alternate Executors & POAs (32:41) How to Make Sure Your POA Will Be Accepted (34:46) Corporate Executors (40:50) Cottages and Family Conflict (44:26) Use Cases for Trusts (47:28) The Dangers of Joint Ownership in Estate Planning (50:39) Estate Planning is a Holistic Exercise (54:00) Conclusion

Hey, it's Dave Chilton, The Wealthy Barber and former Dragon on Dragonstant. Welcome to the Wealthy Barber podcast. Well, we'll be hosting some of the top minds in the world of personal finance. Yes, that's to balance me out. The podcast is about making the subject not just easy to understand, but dare I say, even fun, honest. Whether you're trying to fund your retirement, figure out how to build a down payment, save for your kids' education, manage debts, whatever. we'll be here to help you do it. Before we jump in, a quick but important note,

nothing we discuss here should be taken as investment advice. We don't know you and your personal financial situation, so we're not here to tell you we're specifically to put your investment dollars. We're here to educate, get you thinking, and we hope entertain. But please do your own research and or consult with your financial advisor before taking any action. Hello, everybody. This is Dave Chilton, the Wealthy Barber with the Wealthy Barber podcast, episode 30 something I've lost track going very well thanks again by the way to all of you out there watching but also sharing it's hard to believe how many people across the country are now

tuning in I think we're constantly number two in the podcast list for Canadian business podcasts and it seems like the momentum is growing and growing so thanks again excited about today's guest Leanne Poffman I do want to as a disclaimer be up front Leanne and I've worked together in a major project but also our close friends so I'm going to call for nothing but soft Both questions. That's it. No, I'm kidding. I will drive her some hard ones. Leanne is the president and CEO of RBC Royal Trust. The biggest trust company in the country is an estate planning expert. She is a lawyer by trade, although not a practicing lawyer, of course, went to Queens University. One of the nicest people I have ever crossed paths with, and I mean that sincerely. She's just a kind,

generous person. Big Blue Jay fan. I'm a Taggers fan, so we've had some confrontation over that. and she has won out this year, obviously, with the Blue Jays outstanding year. She can cover a tremendously wide variety of subjects in estate planning. But the thing that I'm most excited about with this podcast is she sees the front line. She sees the mistakes that are being made, the repercussions of those mistakes. We're going to focus a lot on that during the course of this interview, this podcast. So I think you'll really get a lot out of this. Leanne, welcome to the show.

Well, thanks for having me, Dave. And congratulations on the success of the podcast. and go J's. And go J's, yeah. No, yeah, we're thrilled to have you. We really are. I mean, I've seen you at work and I know your knowledge level is high.

I thought it might be nice just for our audience to go through almost in order the various components of estate planning, starting with the will. And, you know, you've talked in interviews before about how amazing it is that a good percentage of Canadians, some estimates say 45, some say 55%, don't have wills.

Talk to our audience a little bit, about the fallout if you don't have a will. What happens? It is shocking. And we did an Ipsos poll a few years ago post-COVID because we thought maybe the dial would have shifted a little bit in a post-COVID world, but we still had 52% of the people we surveyed saying that they didn't have a will yet. And as you might expect, it skews to be the younger people who are higher a percentage of

not having one. But it, you know, my advice to everyone is it doesn't matter what your age is. It doesn't matter what your asset level is. you need a will. And the reason is because it's not about you and it is about your estate, but it's about your family and the people you're leaving behind. If you don't have a will and you pass away, someone has to apply to the court to become the administrator of your estate. And so that's an additional layer of process. But it also, there's a whole bunch of things that you can't do as a result. So the legislation will determine who gets your assets. You don't

get to decide who gets your assets. No money will be left to charity unless all of your beneficiaries come together and decide that that's something they want to do because the money's now theirs. There's no planning for minors. So if anyone is not the age of majority yet when they become an inheritor, then they'll get it all at the age of majority, no ability to delay that in any way. I mean, just a myriad of consequences. And it's just a bit of a mess. And it's so much easier to just go and get the will done. Each of the provinces and territories has their intestacy laws. And basically, those are the laws that govern what happens when someone dies without a will.

And the thing that the public doesn't seem to understand is how rigid those laws are. I mean, it's just done according to the formula, your particular circumstances don't influence how the money is distributed at all. I think in Ontario, if someone passes away, the first $350,000 goes to the spouse, and then the remaining amounts divided, a third for the spouse, two thirds for the kids, etc. but to your point, that's not always ideal. In fact, in many instances, we'd much rather the spouse gets the whole shebang. And so, yeah, I mean, it's just, it doesn't take long. One of the things that holds people back besides procrastination

and we think we're not going to die is cost. In general, what does it cost for a Canadian to walk into a lawyer's outfit and get a will? Well, I think you're probably looking at at least $1,000 and just upwards from there. You know, I have a girlfriend who got one done recently and relatively simple estate, a little bit. bit of a little bit of complexity, but not much. And I think she was around 3,000 for her. So,

you know, you can ask up front and shop it around a little bit if that's important to you. And you know there's also online options, which we don't recommend for anybody that's got any complexity and needs any advice at all. But I would say an online will is definitely better than no will at all. And they're quite inexpensive. I mean, a couple hundred bucks. We'll get you one of those. Yeah, it's interesting. I mean, the pricing of wills is all over the map. And so I've had a few people recently go to the market and theirs has been five or six hundred dollars. Now, to your point, relatively straightforward. Plus, I think some lawyers have used them throughout the years as lost leaders to some

extent as a way to establish the connection, the relationship with the client and then go from there. So you really do have to shop the market a little bit, but obviously you also want to deal with a lawyer whom you trust and enjoy, et cetera, et cetera. Going back to the online area, you are a little reserved that the estate has complications and that that doesn't seem to match up as well. So you think that they're better for those of us who have relatively straightforward estates and don't want to do anything tricky.

Yeah, I mean, first and foremost, we're normally going to say you want advice. But there's lots of people out there who don't think that they need it or really legitimately don't need it. So in that case, I would look for a provider that's a bit conservative because what you don't want to have happen is you don't want it to lead to litigation because people didn't know what they didn't know. And so, you know, if there's complexity in the assets, if there's complexity, in the family relationships, like a blended family is a great example of complexity where you probably need advice. You want to understand what your obligations might be, you know, to a previous spouse, if that's applicable, what do you want to do for a current spouse? How do you want to

treat children from different relationships? That's the kind of complexity I'm talking about, business owners, complexity. Yeah, no, I think that those are all very fair points. Interestingly, though, the group that doesn't tend to get the wills, those in their 20s and 30s starting out with young families, they often don't have those complexities. So for that particular marketplace, that's not taking advantage of getting a will and should be, maybe the online opportunity is a fairly good one. Now, let's go to a subject near and dear to our hearts

because we've both spoken about it so much, and that is choosing an executor. So let's start out with the assumption they're going to choose someone from their life, a family member, a friend, a couple friends, whatever. What qualities do you think they should be emphasizing in that decision? Well, first of all, I think make sure that they want the job. You know, a willingness to reform might be a good one, which, you know, surprisingly, is rarely considered.

I don't think people often get asked before they're appointed. You know, we look at things like what's their financial acumen or what's their ability to deal in a business style environment. Even if they don't need to be the experts, they need to work with experts. They need to be able to take advice, make decisions. they need to, you know, you talk a lot. I like when you say great attention to detail because it is a project. It's a project to manage.

You know, you are stepping into the shoes of someone who's passed away and you're collecting every aspect of their life and you're tying up all the loose ends. So there's a lot of loose ends and a lot of them have several steps involved. So that is a project to be managed. I don't think enough people pay attention to age and stage,

meaning what is the age of the person that you're thinking of appointing? and often it is going to be a generation down. But if it's not, then you're often looking at a sibling or a close friend who's the same age as you are. So what's the likelihood that they're going to be available and willing and interested in acting when the time comes? You know, we often see that with trust, too.

If you're thinking about a trust, don't forget that the trust has to survive your estate. And for probably some time, I often see, I've seen it on more than one occasion where elderly executors are asked to be trustees for 20 years and that's just not going to happen. I'm not sure if I coined this expression or not, but I'm definitely going to take credit for it. But I think that with executors, there's a lot of desire drift.

And so when you initially ask them, you're in your 20s, you're in their 30s, they are happy to do it. But then over the years, you drift apart, things happen, somebody moves, there's a divorce, a number of different things. And they no longer have that desire. I've always said when people review their will every two or three years, I push people to review their will more often than most people, review your executor choice as well. and speak to them again to make sure that they're still open to being involved, et cetera. Do you see a lot of that desire drift where somebody passes away and then the executor's going, ah, my enthusiasm level's pretty low now or my health isn't there? I think sometimes the desire drift happens when they're a little bit further into the process

and they realize exactly how much work it's going to be. Yeah, been there. I've been there. Yeah. I mean, one of the other things I should have mentioned in the things to look for, but this happens, this comes up in this context as well, is where are they living? you know, where they are could be a big inconvenience, for one thing, because so much has to happen right in the location where the deceased was. But there's a legal risk or a tax risk, too. And I won't

get into too much detail. But, you know, if you're named or your proposed named executor or attorney is out of the province or more importantly out of the country, go get some cross-border advice because there could be tax consequences and other kinds of consequences to that choice. So back to your question about desire and drift. do think it's critically important that, you know, we, we ask that question back to my initial tip, which is make sure they want the job. And to your point on reviewing the will, I want to just draw that back to the intestacy conversation we started off with for a second, because an out-of-date will is basically no better than no will at all. And so if you outlive your executors, then

someone still has to apply to court. And if you go that your beneficiaries, it's going to go back the intestacy legislation to determine who gets your assets. So keeping your will up to date is critically important for those reasons, too. Well, you've heard this story, but when I went and looked at my father's will 10, 11 years ago, both. He had co-executors. They were both dead. And I said to him, dad, your executors are both dead. And his answer was, that's not ideal, is it? And no, in fact, dad, that is not ideal and needs to be looked into it. But you made a very important point. Sometimes even some of the beneficiaries have passed away. People do not update their well enough. I actually don't like the advice to you here in the industry, look at your will every five years.

I've said to a lot of my friends, once you get to be our age, especially, look at your will every year. I don't mean our age. I'm older than you, but I'm at my friend's age along with me. Look at it every year. It takes five minutes for heaven's sakes, 10 minutes. I want to go back to a point you made that I think is not getting enough attention. Geographical proximity for the executor is very important. And I think in this digital era, a lot of people have convinced themselves. It's not nearly as important. You can do almost everything online. You can do it by Skype, whatever. not the case. There's certain activities here that you need some physical presence. And having to come from far-flung places is very expensive, very time-consuming, delays the process. I'm a big advocate of having

the people close by. Yeah, I agree. I mean, it can be done. Certainly it can be done. But it isn't ideal. It is a huge inconvenience. And if you just think about all the physical stuff that has to be dealt with has the first point. I mean, there's no way that even if someone's moved into a retirement home, There's a lot of stuff that needs to be dealt with. And that's all the executor's job. You know, that's got to be done by the executor. There's a lot of financial institution or financial type work. Think about having to sell real estate.

You know, that's, you're going to want to talk to somebody that's local and there's going to be things that have to be done that you can outsource a lot of it. You know, you can hire property managers. You can hire someone to do all these, to do all these aspects of it for you. But if you're doing it yourself, there's a lot of time you're going to have to spend in that location where they were living when they passed. You know, I've said to people that I think, in addition to the qualities that you've described, some financial savvy, maybe a little experience, obviously attention to detail, the desire

to do it, a couple of other qualities that can really help is being thick-skinned. You are going to take some criticism from beneficiaries. There is going to be some family conflict. You have to be able to handle that very, very well. And you have to have good energy. You know, people who tend to act promptly on matters really make for better executors. than those of us who fall victim to procrastination. But the family conflict is almost an inevitable part of this.

Do you think that appointing a family member is the way to go, or do you think that often leads to too many troubles and that you're better to either use a corporate executor? We'll get to that later or to choose a friend. Look, every situation is going to be different, right? I mean, by profession, I'm going to suggest that everyone biased towards a corporate executor, but I know that that's not practical. So family members are, as you said, the most common.

whether it's a child or a sibling. But you have to think about what that's going to do, the family dynamics. And again, I think that's something that's underappreciated or not considered enough when people are going through this process. So I often get questions when I'm in a client audience. I have three kids. Do I name all three or do I just name one? I don't know.

I don't know the answer to that question because I don't know how your kids get along. I don't know whether, you know, choosing one over the other two will be, the other two will be grateful that they don't have to do it or whether they will be, you know, upset that they didn't get chosen once again, you know. Or both. That's the challenge. Or both. Or both. You can be both. Yeah. It can lead to resentment. What if one's local to our earlier conversation and two are out of town and guess who the burden's going to fall to? But, you know, everybody shares, shares the honor equally. So I don't have a good answer to the question. I would not put it on a friend. I mean, Unless it's a really, you know, good friend or you're convinced that they're going to be a calming influence in the family situation because of the influence they've had during the lifetime. But I don't, I mean, I think that's a bit unfair, honestly, because as you said, executives have to have thick skins. Like they're everybody's, you know, they're going to make somebody upset about something somewhere along the way. Let's be honest, probable. And so why would you do that to your friends? Why would you want to put them in that?

situation. It's interesting because I agree with all of that, but I also can see why people go that route because they're trying to take it away from one family member and avoid some of the potential conflicts. So all of this, again, is very, very tricky stuff. Do you believe in co-executors? There's so many qualities demanded of an executor that maybe teaming up two or three brings those to the table, but also the burden is then shared among more people. But there are also challenges with that. Walk us through your thoughts there. Again, you know, it depends on who the co-executors are, do they get along? Back to the do I name all three kids or just one. Okay, do you three kids get along? Or can they not make a decision together to save their lives? How do you expect them to do this together?

I think co-executors can be a good idea. You know, when we act, when we act as corporate executor at World Trust, we do often have co-executors. And that's because the person that was writing the will wanted that sort of personal touch and were there for the administrative side of thing. So if you can share the weight that way, share the burden, as it were, maybe somebody's got more strengths in one side or is local, and the other has other strengths and can do a certain amount of it at the distance. And that's how they divide the duties. But they really do need to be able to get along. I mean, you don't want executors fighting amongst themselves because that's just going to lead to litigation. How do you get around the fact that, let's say you have two, they may not agree on some very significant matter.

Is there language that can be crafted that says, hey, if they can't come to an agreement, then this person, their opinion is going to be the one that holds sway. Yeah, you can put that kind of language in there. You know, two can be tricky. If you think they're not going to get along, you might want three and have majority rule. That might be a little safer. But, yeah, you can put language in that says, you know, the final decision shall be made or someone gets a veto or whatever the case maybe. But if you're going to do that, then that might not. set those executors up for success either because now the other executors along for the ride

and having to do the work and get the liability. But at the end, their decision doesn't really count. So, I mean, you got to think through the family dynamics or whatever the dynamics are there too. Just listening to you talk about all these pitfalls, I think it's so important not to die. Like, just stay alive. Well, it's one strategy. Yeah, because when you die, things can really hit the fan here, clearly. I have another one. Just spent it all. You know, yes, exactly. Yeah, and that's a my daughter says, give it away, dad, give it away to a certain person. This way. No, I think that the, again, we're going through all the challenges here that can arise.

Let me talk about a couple others. People die and nobody can find the will or they find a will and they're not sure it's the most recent or they find a will, but there's no accompanying net worth statement laying out where all the assets are and how to get at them and so on and so forth. You know how hard I advocate for full information on that front. I'm a big believer that people have to tell their executor, their family members. here's the most recent will this is how to find it

here's my net worth statement here are the pertinent details etc I'm very pushy on that front do you not think that would solve a lot of the problems we run into Oh my goodness one of my colleagues told me many years ago that the greatest gift

his father-in-law left his children was a very well-organized when I die binder so I mean that's exactly what you're saying now there's some digital versions I get a little nervous about the digital versions because you know the digital platform has to live longer

than the person whose data is stored, which is I'm not, you know, confident in in all cases at this point. But absolutely, a good old-fashioned binder, there's nothing wrong with it, right? Or one of those accordion folders or something like that with copies. But I know this will probably come up because I've heard you talk about it as well, but don't forget all the digital stuff because not everything has a paper copy. You know, one of the things that I definitely have seen in real life not make its way into the knowledge base of the executors is private company shares. As you know, they're often not documented. They're not in an account per se. And so you have to find the share certificate or the original transaction details. And that's sometimes

sometimes slick between the cracks. So yeah, all of this has to be laid out. I love the idea of the When I Die folder and having it all put together very carefully. Obviously, you have to protect against it being found if you're leaving too much detail and so on and so forth. But people are clever enough to do that. Yeah, private company shares anything. I mean, we still sometimes see share certificates, right? Only in certificate form. Like, we still see that. We still see, you know, strip coupons.

So, so you, you just never know. And it does have to be, there has to be a bit of a scavenger hunt in many cases. What I was, what I was reminded of many years ago, I used to hear about people storing their wills in their freezers because they thought they were fireproof. So if you can't find it anywhere else, I guess check the freezer. That's something I would do, isn't it? let's be honest. That's something I would do.

Well, there's nothing else in your freezer. So there's nothing about fridge. In fact, I don't even know why I have one, to be perfectly honest. No, all of that is very interesting. Going back to Wills, let me ask you a question that I'm asked often. Somebody has a most recent will, but they also have versions of older Wills. Do you tend to think they should keep those or not keep them? Get rid of them.

Okay, so you and I are completely aligned. Do you know that a lot of experts out there to stay planning say keep them? Because sometimes they could add clarity if there's any disagreements going forward and so on and so I do not agree with that because in real life, when the old wills have been kept, they've led to controversy. If there's been changes, then the people on the negative end of the change are often embittered. And so I don't believe in keeping them. I think you're best to get rid of them, but I do see the other side of the story. Yeah, you're right. And I mean, there's probably professionals who disagree. I'm giving a gut check personal reaction, I would say, but for the same

reasons you probably would have, which is if there's a story to be told that's different in one will, then in the other, then, you know, who's there to explain what happened? Why did the story change? Now, sometimes they can be evidence, right? If you're, if you are truly worried, this, it's maybe the only, you know, it's the only evidence if you're worried about undue influence or if a will's not valid because someone didn't have competence to make it, then obviously you want to have access to that. But chances are the lawyer does, assuming you worked with a lawyer. So, I mean, I get that. But I also think there's, there's people that like to write on their way. wills. You know, so-and-so didn't visit me for tea on Sunday. She's out. And I don't know how much

of that is healthy for someone else to see. No, I'm with you. Like, I'm totally with you. I tend to believe in chucking them. Okay, let's move on to powers of attorney. Amazing how little most Canadians know about these documents. Amazing to me. And of course, they come into play in most of our lives at some point or another. Walk us through definitions of the two types of powers of attorney. And they're not always called powers of attorney across the country, are they? No, they're not. And we, you know, Quebec is a completely different system. So we won't, we won't talk, because there is a power of attorney in Quebec, but it only applies when someone has capacity. It's a different document when they lose capacity. Right.

What tends to change more in name is the personal care document. So, you know, representation agreements in British Columbia, et cetera. But I think for ease of today, we'll just talk about powers of attorney for property and powers of attorney for personal care. And what I mean by property is not just real property, like real estate, it's all of your assets, anything that you own. So back to your point on people not appreciating that they have them. I referenced earlier, we did that Ipsos poll that said 52% of Canadians said they didn't have a will. 65% of them said that they didn't have a power of attorney, which is shocking. But you know what's crazy there is there's a lot of older Canadians, including some older, pretty wealthy Canadians who don't have power.

of attorney in place. Nuddy. Or, or they don't remember that they have powers of attorney because it was all done part and parcel with the will. To the will, yeah. And if they don't remember, it means they didn't give it much thought, which I think is problematic for reasons we'll probably talk about. So what you're doing in the power of attorney document is you are appointing a substitute decision maker, someone to step into your shoes. And in the case of powers of attorney for property, the rules and things are a little bit different when it comes to personal care of is property. So I'm going to mostly focus on property because frankly, that's what I know best. But I think that, you know, the power of attorney for property can do anything that the person that they

were acting for. It's called the donor in Ontario anyway. So they can do anything that the donor, the person who gave them the attorney, can do accept, make a will or a testamentary disposition. So they can't change. Otherwise, yeah, you'd change the will all the time. Like I would do that in a second if my dad appointed me. My sister would be out. O-U-T-out. So that's a good law. I like that rule. I like that rule. Yeah, it was written specifically for people like you. So the, and so that also includes like can't change a beneficiary designation on a registered plan or an insurance policy. So it is a very powerful document. As the word suggests, the other thing that people sometimes get confused on is because it has the word attorney in it, people think that person has to be a

lawyer, not true. It can be anyone, anyone over a certain age. Over the age of majority, I assume. Yeah, in some provinces, it might even be younger, but let's just go with over the age of majority. Now, again, we see a lot of people don't have these documents in place at all, but when you go to choose the people you're going to appoint as your powers of attorney, it's a lot of the same type of thinking that goes into choosing your executor, somebody responsible. I think for personal care, it helps if they have proximity. They're close by because sometimes they have to go to the hospital. literally go to the hospital to help make decisions, et cetera. Do you think, again, that that's

key in this case as the person's nearby? I do. Again, like you said, probably more so for personal care. You can name the same person for property and personal care, but you don't have to. It can be different people. I think that's critically important. I think, you know, back to the point of people maybe not thinking enough about this document or realizing that they have one based on the statistics we heard, to me, the power of attorney is as or more important than the will because it's the document that governs what happens to you and your money, your assets, while you're still alive. You just may not have the capacity to be making those decisions anymore. So, yeah, 100%. It needs to have as much thoughtfulness. And then again, you have to think about

the relationship between either co-attorneys, which can be very tricky. or between the attorney for care and the attorney for property, who really do have to work in unison together because every care decision has to be supported by the property to the extent that there's cost associated with it. I agree. And I mean, sometimes, let's be honest, that can be really tricky.

The objectives can be almost at odds. What's best on the personal care front can cost so much that it's very damaging on the financial front and maybe not sustainable. So it's not that the person managing that doesn't care. They don't think that it's going to be affordable over the long term. So there's some back and forth there. Everybody has to present their perspective. So you're right.

They have to have good communication skills and hopefully have a strong relationship. I've spoken very aggressively about the fact I don't like co-powers of attorney for personal care. Because, again, some of the decisions have to be made quite quickly. And if you have two people and they don't see eye to eye, that can be a problem. You can have gridlock set in. That's one example of where I for sure would have lawyer language about if there is. a disagreement, such and such person's opinion has to be the one that guides things going forward. Yeah. And I mean, the other thing to consider is, you know, sometimes the care

decisions are made to preserve the assets because I have a lawyer colleague who refers to them as impatient inheritors. And so, you know, you don't want a care decision to be made that somehow is done on the basis of cost versus what's in the best interest of the person that you're making the decision for, whether that's where they're going to live, what kind of care they're going to be able to receive, you know, how many hours of care. We work with a colleague who's an elder caring specialist and she gets called into the courts because family members fight over where parents are going to live, whether it's, whether it's, you know, one person's basement and then, you know, they're going to save some money on a facility of some kind or, you know,

going to stay at home and have very expensive care brought into. the home or whatever the case may be. So those, nobody wants to think that their family's going to be the family that fights over stuff like that. But, you know, people fight over stuff like that. Well, I mean, you and I've gone through it in our personal lives. We've both had parents where you've had to make very tough decisions. And this is tricky.

Striking all the right balances is not easy. Even when there is strong communication, even when everybody gets along, it's not that easy. I mean, people see things differently. And it is a very, very challenging one indeed. Look, here's a question. that I never see addressed. I don't see this discussed, but the public asks it all the time.

So I appoint power of attorney for property, for example. Can that person start making decisions right now when I'm absolutely fine and don't want them involved in any way, shape, or form? That is a common question, but you never hear it discussed. Yeah. So most powers of attorney will come into effect the minute they're signed.

So the answer to the question is yes. But of course, if somebody goes out and starts using it without the person's consent and the person still has capacity, then you change your power of attorney. I mean, you have the capacity to do that. So most financial institutions, for example, won't take instructions from an attorney

if they know that the person still has capacity, the primary, you know, account holder, unless that person has also signed off on it, right? So it is tricky. The reason that we don't suggest making it a requirement that the person, has lost capacity or there's a finding of incapacity before they start to act is there's a capacity is a very elastic well and it's a very elastic definition too right so people have

good days and bad days capacity doesn't unless somebody has something catastrophic happen normally capacity doesn't disappear overnight so you have this long period of time where someone may not be formally deemed incapacitated or you can't get a formal finding maybe they won't Maybe they won't go into the assessment. But they're making, they're making poor decisions financially. And so there's, it's not uncommon now to hear about, you know, years of making poor financial decisions. And then suddenly, you know, when finally someone gets to step in, the damage has been done.

And so you can't, you don't really want, we call them springing powers of attorney, at least here in Ontario, the one that only comes into effect if there's been a formal finding of incapacity. But, you know, you run the risk. of not having that formal finding and then not being not being able to have the power of attorney come into effect when it should you and i agree completely on that because we've seen enough real life examples that it's impossible to disagree you know too too often it has been done where they didn't have it immediately and then it's ended up being a disaster down the road can i make one more point though because i don't want to lose this one either back to it applies to both wills and powers of attorney and i should have said it earlier i know you've said it as well get an alternate named oh okay i don't i don't want to forget about that point Because, again, I think I may have referenced it when I talked about outliving your executors. But if you haven't named an alternate for both the power of attorney and for the executorship, then you're back to having to go to court.

And I will say that in the power of attorney situation, going to court is as much or more onerous of a process than getting the ability to administer an estate. And now you have to think, you know, the person that has to do that is probably also caregiving. They're probably also dealing. because the person is still alive. And so if it's the, you know, the single child or the one person that's always there for them, then they're probably also trying to manage both sides of the equation. And having to navigate that core process is not something you want to wish on anyone. No, that's really an important point.

Thank you for bringing it up. My argument is you should have a backup to the backup. So it should be your plan A, a plan B, but also a plan C. Because, again, you don't know when the plan B says, I can't do it either. I'm very sick or I'm dealing with an issue out in British Columbia. and I'm from Ontario and so on and so forth. We see it so often in real life that it can't hurt to have, again, a backup to the backup even. Well, and I mean, if it's a couple, you know, nine times out of ten, they're naming each other in the first instance.

Right. And then the backup, the backup is to the surviving spouse or surviving partner. But if they're both in their 90s, by the time these documents have to come into effect, you, you know, you've effectively probably, you know, already onto your alternate number one. one. Yeah, so I agree. So you've got to have a backup to the backup. Your last question on powers of attorney, you know, power of attorney, the actual document is incredibly straightforward. It's often a one or two pager and signature witnessed, et cetera. The challenge with that is when people actually have to go use the power of attorney to do something financial. They're going into the financial institutions across the country. And the financial

institutions are sometimes challenging to deal with. They're saying, hey, we don't want to take just that. We need more than that because we don't want to be exposed on the liability front. We don't want to make any mistakes. You're seeing this more and more, of course, with the aging population at baby boomers, nobody's wrong here. Like I understand why the financial institutions are pursuing more proof, et cetera. What can we do to improve that particular situation what seems to be coming up too much? I think, although very few people probably do this, ask them in advance what they're going to need when the time comes and make sure you've got it teed up while everyone has capacity. I mean, that's not a conversation anybody really wants to have, but let's face it.

it, we're planners, so we like to plan. You know, things change. Legislation changes, laws change. A crazy legal case comes out, and that changes what, you know, the risk tolerance of any particular. It's not just financial institutions. I mean, anybody needs to be able to be satisfied that the power of attorney is a valid document. And we see so much abuse and misuse of powers of attorney that you can't blame anyone for double checking. So, So, I mean, the best advice I could give is probably to say, let's see if you can confirm in advance and get it on file early before you need it, whether that's with your financial institution or anywhere else that might accept it and keep it and know that it's there and make sure that they've done their due diligence while everybody's still capable and competent to make any changes that might be required. Yeah, that's very well said. And by the way, I hope our listeners put a lot of stock in that answer because this is coming up a lot.

This is becoming a significant real life issue. And so thinking about that answer, doing some pre-planning can make a huge difference to avoid stress and delays down the road. Okay, I'm going to tee up something near and dear to your heart. You're biased on this front. So I'm going to help you out before I throw it at you. Corporate executors are becoming more commonplace now. Obviously, at Royal Trust, that's one of your big offerings and you are biased. But I'm not biased.

And I'm, as you know, a fan of corporate executors for a lot of the complicated estates. out there. And as we've gotten older, the last 20 and 30 years, I've been out there. Estates, oh my gosh, there's so much trickier than they were when I first started out. You've got, you mentioned blended families, but you've got foreign real estate, you've got hold codes, you've got private company shares. You have all of these things. We didn't use to deal with too too often except for the altar rich, are now becoming quite commonplace in the professional market, in the well-to-do market. It's very difficult for even competent individual executors to step in and tackle all this with no experience and everything else.

So the corporate executor steps in and does this. We'll talk about the perceived downside, the cost in a moment, but talk to us about the upside of what it is you do and why you believe in it. Well, I'll start with a pretty basic premise, which is we outsource so much of our lives to professionals. Why is this the one area that everyone clings to the honor of doing it personally? You know, that's kind of a bit of a mystery to me. But, I mean, like you said, we often get involved when there's complexity, for sure, 100%.

There's a lot of, like you said, the estates we are seeing are so much more complex than they were 10 or 15 years ago. We also get involved when there are challenging family dynamics. You know, having a neutral third party is something that is very attractive to a number of families. We get involved when longevity is required. So someone wants to do some trusts that are going to last maybe beyond the current generation. So back to the age and stage one more time, a corporate trustee, a corporate executor isn't going to die. We aren't going to quit in most cases. And we're there for the long haul.

We have a lot of people who are worried about children with disabilities, sometimes often adult children with disabilities. And so we're seeing some more of that. They don't want to burden their other children. They don't want to interrupt the sibling relationship. They want to let siblings be siblings. They don't want to put their, you know, sibling relationship on the line, you know, to put them in charge of someone else's money. So we see that quite a lot. And then, you know, back to the non-resident thing.

There's so many people now where their family is not where they are. And so we see a lot of instances where we're appointed because it avoids that logistical challenge. It avoids those potential tax issues. and and it's you know frankly it's just the burden of administration they don't want to put on their family member or to our earlier conversation their friends let someone else who does this all day every day take the burden of administration if you want to have a co who's there like we talked about earlier to help make decisions that reflect the values of the family or whatever the case may be that's available to them but but why burden them with the minutia and that

project management that we talked about earlier. You know, it's interesting when I first started talking favorably about corporate executors 20 odd years ago on stage, my argument was that a lot of these very complicated estates are almost too much for most individuals to step in and handle. You also could avoid some family friction. But now having seen friends go through all of this and deal with all of the ups and downs and all arounds, I actually flop the two reasons for the corporate executor. The family friction odds are so much higher with a complicated estate.

there's more money involved and just more tricky things and it tends to lead to somebody having a falling out with somebody else. That's my biggest reason now for thinking with those big complex estates to pass it off to the professionals. I mean, you must see some horror stories with families falling apart over friction on all these subject matter.

Yeah, and it isn't always just the big and complicated ones. I mean, there's all sorts of things that families get upset about in estates that, you know, having a neutral third party to be that arbiter or the common bad guy, whatever role it is that we're being put in there to play, even with some relatively simple assets, but things that have high emotional value, whether that's relationship-wise or actual tangible things,

like I'm sure we might talk about cottages and family chlachis and heirlooms and things like that. But it doesn't necessarily have to only be the big complicated estates that get messy from a relationship perspective and we're having a neutral third party there to preserve the family, forget about the assets for a minute, is worth, you know, whatever cost may be associated with it. Yeah, no, I think that's true. You mentioned the family heirlooms and I've said that I find it fascinating that a lot of the controversy you see among family members is not over the really valuable family heirloom, the group of seven painting. They've kind of thought that through and we're going to sell it and we're going to divide the money such and such a way. It's,

over the non-financially valuable things, but they have sentimental value. You know, a picture of grandma's wedding, all of those, that's where a lot of the arguments take place. And so I've been pushing people, you've got to discuss all that ahead of time. And you'll use a lottery system

or the sticker system, whatever else you can, make it luck-based. And so nobody's bitter that somebody's been given this, et cetera. It's all divine by luck. I mean, you're in this.

You see so much controversy over those subject matters. Yeah, well, and when things go missing, right? I mean, there's often stories about somebody getting back to the house as soon as the funeral was over and something disappeared. Where's the fill in the blank? What happened to, you know, whatever the case may be? So, yes, there's fighting over objects during the distribution process, but there's also sometimes fighting over objects because you wonder who took them. No, that's a very good point.

Now, you brought up cottages, and I think in estate planning and estate settlement more, there's no more. controversial area than cottages. Not everybody's blessed to own one, of course. I think it's about 10 to 12% of Canadian families have a second property. But oh my gosh, the horror stories when you try to pass them on to more than one child are just legendary and not in a good way. What are your general thoughts on how to deal with the cottage? Are you in that camp that sell it before you die and take away a lot of this potential

controversy? Yeah, if you don't have a plan in place that is better than they'll figure it out, I would sell it. I would sell it. Now, I say that, but you know, do as I say, not as I do. But I do think getting ahead of it one way or the other is important. So that means, you know, either having an agreement ahead of time amongst those that, you know, will be inheriting it to do a buyout plan by one or figure out who's going to use it, who isn't. But yeah, I really, this industry and my experience has led me to think that emotional attachment to property is very, very dangerous for families, very dangerous.

You and I couldn't agree more. And again, anybody out there disagreeing, they may be looking at their one case or a friend's case and saying it all worked out fine. But when you look at the big picture, your universe is a wider one. Oh my gosh, it's hard to disagree with everything you just said, anything you just said. The number of disasters is crazy. And I love that expression that their plan is they'll figure. it out. Well, I can tell you from watching it, they seldom do. I mean, you've got three people

inheriting at all of different income levels. So one may want to do a major rental. The other one's like a major rental. Are you kidding? We only go there one week per summer. Or they get conflict about when they want to go there. It just is so difficult to make it work. Now, a lot of our listeners are going to say, I don't care what they're saying. The cottage is a key part of what holds our family together. It's generations of tying us, of binding us, of creating memories. I get all of that. I really do. So there's no one answer that's right for everybody. But I do want to warn people that if you don't sell it and you pass it on, there's a good chance that's going to lead to some controversy. That's just fact.

Well, and you also have to do some second level thinking here because if you're that attached to it amongst the, you know, G2, the generation two, the siblings, the adult siblings, what happens when it goes to the next generation down? Right. And now you don't have two or three people sharing. You have six or nine. And how's that going to work? And how are they going to divide all of that up?

I mean, if you truly think it's going to be a generational family binder, then, you know, how's that going to work when it gets past the first generation? That's a great point. Yeah, hard to believe it can survive six, nine, 12 people eventually wanting access to it and sharing ownership and sharing costs and most importantly sharing decisions. So that's a good point. Even if you think it's a key part of the family, getting it past that next generation, the math just doesn't make it look good.

Now, a funny story is that we talked about the importance of communication here. and talking about all this in advance. And so, of course, I went out and said, this is what you need to do. And a buddy of mine, Sarney did that. And then came up to me and said, oh, my gosh, Dave, that was horrible advice. We had the conversation in advance. And now my kids are fighting before I even die. I'd have been better to wait and leave the disaster for when I was gone.

I didn't have to listen to it. So, but that speaks, even though it's a funny story to how challenging all this is, that even when they're trying to have a calm conversation and the cottage wasn't being sold and the guy wasn't dying, it still led to disputes about how it was going to be shared, handled and all those types of things. So it's very, very tricky. You know, one of the things in financial planning circles when you listen to podcasts like ours and others that gets very little attention, trust. We don't talk about trust. They're thought for, by the general public as being reserved for the ultra wealthy and that there are ways for them to do this and do that. But for

the normal folk out there, and that tends to be our audience, you just never hear them discussed. But one of the things that I've seen is a lot of people use them to leave money to beneficiaries because the beneficiaries had addiction problems and they didn't want to give them all of the capital thinking that with the addiction problem that could lead obviously to some big problems is that one of the reasons that you see trust used quite quite a lot actually yeah pretty common addiction just a general kind of spend concerns about their ability to manage money or to be vulnerable to lose their money easily sometimes it's they're worried about family family law situation you know, relationship.

Right, for sure. I think we mentioned earlier children with disabilities. So there's, you know, whether they have a disability tax credit or not, two kind of different ways you want to structure your trust, if you're trying to preserve some government benefits while still letting the child benefit or the inheritor, whoever it is, benefit from the trust. But that happens quite a lot as well. People who are just not going to have the capacity to manage their own money, they don't,

They lack legal capacity, but it doesn't have to be that. It could be, you know, any kind of, any kind of disability. So, yeah, I think for a while there, trusts were what you originally said. They were a tool of the wealthy, mostly as a tax planning strategy. Most of that tax planning benefit has gone away through different changes over the years that has been made to the tax filing rules. They're actually now a little bit punitively taxed as opposed to beneficially. That's not the case when it comes to disability trusts if they qualify for the disability tax credit.

So there are still a few areas where it can be beneficial. But I think they're, like you said, they're overlooked as a strong planning tool. Miners, right? I mean, let's just think for a minute about, and of course, it sort of depends on the amount of money you're talking about. But do you really want kids getting their full inheritance at age 18 or 19? Or do you want it to be staggered? Do you want it to be delayed? Do you want it to be incentive-based? Like you'll get so much when you finish your first university degree or your first post-secondary program, you can have so much to buy a house. You can have so much to start a business. But otherwise, it's going to be delayed until you've got the maturity that whoever the person is gifting it thinks that they need. So lots of great reasons still to use trust as a structure that have nothing to do with tax or certainly are not limited to the high net worth. And you're right. I think on the family planning, you're seeing more of that too.

People concerned about divorce and there's some of the reasons that they're using it that way. Okay, let's touch on a number of other things. Joint accounts. I just talked recently in a video I did about my concern that all of a sudden, Canadian, older Canadians are slapping people's names on joint accounts left and right. We did not see this that much 15 to 20 years ago. Saw it, but not that much. Now it's commonplace for people to be doing this. Just walk our audience through some of the potential dangers there. Well, you're giving up ownership first and foremost. As soon as you put somebody else's name on it as a joint owner, you are giving them full ownership rights unless there's an agreement, you know, to the contrary. So it makes it subject to that other person's

creditors. It could show up in that person's family law act. You know, if there was some sort of a family claim, they could go spend it. There's, there's, you know, generally there's no restriction on that. So that's a problem. You could be triggering capital gains tax. Absolutely. Immediately on the gift. A lot of people do it, two reasons, convenience and to avoid probate. And probate is a dirty word in many provinces across this country. But I would say that if a poorly thought-out joint account creation to avoid probate is going to cost a lot more in litigation than it cost to probate the estate. So this is another area where good sound advice is required about the consequences. And it's not just about the impact of the joint account.

It's the impact on the whole estate. Because if you've gifted something as a joint account, it's now no longer, you know, going to be in your estate if it's got right of survivorship. It belongs 100% to that joint account owner when you pass away. So it's now there's some, there's some legal presumptions that if there are certain family relationships, like if it's a parent making a joint with a child, there's now, since the Supreme Court of Canada case many years ago, there's a presumption that that child is holding it on trust for the estate. Right.

There's a presumption that has to be rebutted or disproven. So then that could lead to a disagreement, right? No, no, no. The intention was that it was to be 100% mine when we passed. Well, show me the document that says that the intention was the gift to you. So they're very thorny. They're very thorny. And so the convenience can very quickly become like a massive inconvenience.

You said all that so, so well. And some of the top minds in Canadian finance are saying all the, those same things now and saying that before you do this, there should be red flags saying you better go do proper research. You're right about avoiding probate. But here's the funny thing. The people I speak to in some cases are doing it because they think they can avoid capital gains tax by doing it. They incorrectly think that I'm just going to die. It's going to shift over to my daughter's name, et cetera, and I'll not have to pay capital gains tax. There'll be no deemed disposition. If only were that easy, then we'd obviously be advocating for it. Now, I'm not saying

I'm against joint accounts, by the way, at all. I'm saying you need to understand all the repercussions and the potential risks and everything else. Estate planning in general, because we are getting to be an older society and there are a lot more complicated estates. People need advice. It's very difficult to do this on your own. Now, you need to sit across the table from a true expert and have her, have him walk you through the nuances, make sure that the plan is customized to your situation. In fact, I think we're going to see a division in the financial planning advice community that focuses on just this. So they're not going to manage your assets.

They're not going to do anything along those lines. You're strictly going to go in and they're going to walk you through all the various things that you have to consider when you go to do your estate planning. But yes, your points about the joint account are bang on. Any other points you kind of want to make to our audience before we wrap up here? So two things. First, your point on competent planning, I mean, is critically important. And, you know, if you're working with a financial institution,

like RBC, you should have access to the planners that can make you think through that, not just for the stuff that is currently with RBC, but like ask, make inquiries. Is there, is there someone I can talk to that can help walk me through some of this? Because that really is, you know, a critical part of the value proposition of a financial institution these days. The other thing I would say is we've talked a lot about wills and powers of attorney, the cornerstones of an estate plan, but they are not in and of themselves. an estate plan. They are the core components, but we sometimes ask people to visualize a bit of a

spider web. And so you've got your will and your power of attorney, but you've also got your designated beneficiaries over in one corner of the web, and you've got your life insurance policy in another corner of the web, and you've got your joint accounts, like we talked about, in another corner of the web. And when you touch one, the whole thing ripples. So when you're going to make an account joined, you can't just go and talk about the joint account, with whoever it is that you're getting advice from. You have to talk about the impact to the whole plan. If you're changing a beneficiary designation, same thing,

or making a beneficiary designation for the first time. I mean, another common issue, we won't go into depth. But, you know, if someone gets all of the proceeds of a registered plan as a designated beneficiary, the estate is still responsible for the tax on that. Absolutely. Look at some of the extreme examples of that we've seen over the last few years. So it's not fair, probably fair or equal, depending on which words you like to use.

They're not always the same to give one child the designated beneficiary on the RIF or the RRSP and the balance of the estate to someone else because the someone else is going to pay the tax on the portion of the registered plan gets. So my point being, it has to be a holistic conversation. It has to involve everything you own and owe. and you, you know, you can't just talk to any one person in isolation, one advisor, one financial institution without really making sure that you understand the downstream impacts of that to the whole plan. Yeah, I agree.

You've got to seek expert advice and estate planning. It's not going to take too long. You're going to sit down. You're going to go through all your assets. And to your point, some people still have liabilities, late life, et cetera. And you're going to work through all of that in the way that you think makes it best for your beneficiaries, optimizes on all fronts, but it is key to get good sound advice.

You've been a great guest. It's always a pleasure seeing you. It really is. And I look forward to doing it. We'll have you back at some point because we didn't have time today to talk about using life insurance as an estate planning tool, a couple of the other things you brought up. And they're very important as well. So we'll get back to those next visit.

Well, and it was a rare treat for me. Usually I'm the one inviting you to come talk about these things. So we got to reverse rolls a little bit. That was fun. You were better. All right. Thanks again.