Some stories come to me more than others, like that of Lucie (pseudonym).
Mother of an only daughter in her thirties, our reader fears for her estate if she were to die tomorrow morning following an accident.
Not that she is sitting on an immense heritage, but still: she has a house paid for and savings for her old age accumulated through discipline.
“I have worked on a budget all my life, I have never been extravagant”, says this woman on the verge of retirement.
His estate plans are like the rest of his life, they couldn't be simpler. The widow intends to bequeath everything to her only descendant.
But there is a shadow in the picture: a prodigal son-in-law, whose expenses weigh on the finances of the young couple.
Among other things, he seems to be driven by an insatiable passion for motorized devices, from leaf blowers to lawn tractors, obviously including new cars. His latest fad: a watercraft.
“Real waste! I'm afraid my daughter will finance part of it, but the subject is taboo,” says Lucie.
She worries at the idea that the fruit of her years of sacrifice will turn into a pontoon or an F150.
Are there any solutions?
Without the presence of the son-in-law, Lucie could have settled for an ab intestate succession, that is to say without writing a will. In this case, his daughter would automatically be liquidator and heir to the estate.
The situation of our reader now requires the advice of a lawyer. The services of a notary are not a luxury, even in simple cases.
Here, the challenge is to find a solution that will allow the heiress to enjoy her due while protecting the inheritance of the spouse.
I consulted two notaries to see clearly, both are spontaneously considering the testamentary trust.
“It is used a lot in a context of asset protection, we want to make sure that the beneficiary does not squander it,” explains André Soucy, notary at the accounting firm Mallette.
The solution may seem extreme at first sight, which is why a more in-depth analysis seems in order.
The trust requires the appointment of a trusted third party who will control the faucet as directed by Lucie. It's heavy, especially since the heiress is not fundamentally irresponsible; his problem, deep down, is coming from a frugal family and loving a carefree spouse.
A testamentary trust is expensive, costing $2,500 to set up and incurring accounting fees each year.
This solution is most often considered in large estates and when it involves young heirs or a disabled person. That's not exactly the case here.
The life annuity
Notary Tania Marineau suggests another, less expensive option: distil the inheritance with a life annuity.
"We could provide for a bequest on death, for example, and use the residue to buy a life annuity," explains the legal advisor.
As the inheritance will come in the form of small monthly amounts, it is less likely to excite the spouse's infatuation with all things drinking gas. “But it is more restrictive for the beneficiary”, recognizes Tania Marineau.
Always a constraint
Whatever the solution, anything aimed at protecting the inheritance of the son-in-law will constitute a constraint for the heiress. But time is on the line for Lucie. His fears are based on the assumption of an accidental and imminent death. She is likely to live to a ripe old age and spend her assets at her own pace. In the meantime, his son-in-law could come out of the background.
You never know, which is why she should consult a notary to avoid rolling over in her grave.