Last week I compared two mechanisms for equalizing children香蕉视频直播檚 inheritances where one (or more) of the children receives a financial gift during a parent香蕉视频直播檚 lifetime.
One is a hotchpot clause in a will. The other is documenting the gift as a loan.
I listed the benefits of each mechanism with a plan this week to create and provide an example will clause that would achieve the best of both worlds.
Here is a draft I came up with:
When dividing the residue of my estate among my children, I direct my Executor to take into account any gifts that I have made to any of them during my lifetime and which I have decided should be taken into account on my death when determining their inheritance for the purpose of ensuring fairness between my children.
Any gifts to be taken into account will be listed on a ledger that I have kept for that purpose, entitled 香蕉视频直播淟edger of gifts to be taken into account for inheritance purposes香蕉视频直播� (the 香蕉视频直播淟edger香蕉视频直播�).
If a gift on the ledger includes a provision for interest, then the value of that gift to be taken into account shall include interest up to the date of my death.
Taking the gifts into account means the following:
- Adding the values of each gift listed on the Ledger, providing the total sum of gifts to be taken into account (the 香蕉视频直播淪um of Gifts香蕉视频直播�),
- Adding the Sum of Gifts to the amount of my estate being divided among my children, resulting in an adjusted amount for division (the 香蕉视频直播淎djusted Amount for Division香蕉视频直播�),
- Dividing the Adjusted Amount for Division by the number of my children, resulting in an unadjusted equal inheritance amount (the 香蕉视频直播淯nadjusted Equal Inheritance香蕉视频直播�), and
- Giving each of my children the Unadjusted Equal Inheritance minus the combined values of any gifts that child received that are listed on the Ledger.
The ledger would be a simple table with the title 香蕉视频直播淟edger of gifts to be taken into account for inheritance purposes香蕉视频直播� having the following headings:
- Date of gift,
- Name of gift recipient,
- Value of gift,
- Interest rate and compounding frequency (if applicable), and
- Signature of Testator.
Each time you give one of your children a gift, you can consider whether you feel it needs to be added to the ledger to achieve fairness with your other children.
This mechanism achieves certainty about which gifts you do want taken into account and which you do not.
It香蕉视频直播檚 clear from the will and the ledger itself that you香蕉视频直播檙e not collecting money from your children. Rather, you are doing your best to achieve fairness between your children.
It allows for an interest rate because a gift of $50,000.00 given 40 years before your death has a significantly different value than the same gift given 5 years before your death. You can choose whether or not to apply an interest rate.
Unlike the loan option, these gifts will not be added to the total value of your estate for the purpose of calculating probate fees payable to the government.
And best yet, it avoids archaic language that nobody understands!
I have provided a draft will clause. But I strongly recommend against making a 香蕉视频直播渄o it yourself香蕉视频直播� will that includes it or trying to amend an existing will to add it. This draft clause might require modifications to work within an existing will structure.
I always recommend obtaining legal advice from a lawyer who might have much better ideas about how to achieve fairness among your children based on your particular circumstances.
Paul Hergott
Lawyer Paul Hergott began writing as a columnist in January 2007. Achieving Justice, based on Paul香蕉视频直播檚 personal injury practice at the time, focused on injury claims and road safety. It was published weekly for 13 陆 years until July 2020, when his busy legal practice no longer left time for writing.
Paul was able to pick up writing again in January 2024, After transitioning his practice to estate administration and management.
Paul香蕉视频直播檚 intention is to write primarily about end of life and estate related matters, but he is very easily distracted by other topics.
You are encouraged to contact Paul directly at paul@hlaw.ca with legal questions and issues you would like him to write about.
