The Rural Voice, 1997-01, Page 31process called "intestate succession"
comes into effect. The estate is
distributed in accordance with the
provisions of the Succession Law
Reform Act, provincial legislation
that governs the laws relating to
estate administration. The estate will
be transferred according to the size of
the estate and the number of
• survivors. If only the spouse
survives, all of the estate will go to
the spouse.
If the spouse and children survive,
the distribution depends on the size
of the estate. If the estate is Less than
$200,000, all of the estate goes to the
spouse. If the estate is larger than
$200,000, the first $200,000 goes to
the spouse and the remainder is
divided between the spouse and
children. If there is no spouse, the
estate is divided equally among the
remaining children.
Such provisions would create
obvious problems for a farmer who
wished the farm to remain
operational for the spouse or for one
of the children.
Gamble used three case studies to
illustrate the difference properly
setting up your affairs can have on
the ability of your family to continue
to operate the family farm. In the
worst-case scenario, a farmer dies
without a will, with all the farm
assets in his name, and with no
beneficiary named for his RRSP so
that it goes into his estate. Gamble
acknowledges that this is unlikely to
happen because often a financial
institution automatically asks who an
RRSP buyer wants listed as a
beneficiary. Still, he says, the
example illustrates the extra costs
involved because the will and joint
ownership weren't established. For
instance, because all the assets went
into farmer Bill's estate, and estate
administration charges are based on a
percentage of the money involved in
the estate, the charges range from
$20,000 where there is a will, to
$39,350 for the farmer without a will.
Probate fees go from $5,500 to
$11,305.
All this drains money from the
resources the family has to keep
farming and to settle the claims on
the estate. In addition, under the
worst-case scenario, the family is
forced to sell off one of its farms in
order to settle the estate. This further
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,.„. .,„, ,_.„...mommwm...........,,..........,,,
1J i MetLife
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Extensive training in the areas of:
® intergenerational
IR retirement
M insurance
MetLife
the necessary
this highly
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JANUARY 1997 27