FOR A SUCCESSFUL SUCCESSION

WRITTEN WITH THE SPECIAL COLLABORATION OF ME NOEMIE LANDRY-BLANCHARD, NOTARY.

FOR A SUCCESSFUL

 SUCCESSION

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No one plans to fail, but many fail to plan. This adage particularly applies to the succession planning of entrepreneurs, some of whom still haven’t drafted a will, while others may neglect to update it. However, a will is the only means you have for the management of your assets after your passing. This column aims to be the first of two on succession planning, and this one will address general considerations.

The will is a unilateral legal act, in the sense that it aims to orderly dispose of the testator’s assets, unlike a contract that dictates the relationship between two or more parties regarding any object. The law also provides certain rules governing its preparation and the regime it establishes. The will does not replace the unanimous agreement among shareholders; it complements it. Although each will have its peculiarities, it is important to highlight these key points as “tips and tricks” to ensure optimal estate planning:

• Conduct a wealth assessment This is the elegant term referring to the inventory of your personal and business assets, including stocks, investments, etc. Ease the liquidator’s work by listing your personal identification numbers (PINs), access codes, and computer, mobile, and internet passwords in a document that the liquidator can refer to. And don’t forget to indicate where the small key to your safety deposit box at the bank is hidden!

• Choose your liquidator wisely The chosen candidate must demonstrate great integrity, attention to detail, transparency, and patience. The liquidator will carry out the execution of your last wishes. In a border region like this, be aware that choosing a liquidator from another province could have logistical implications for the settlement. Finally, since the expenses related to their work are covered from the proceeds of the estate, you will likely prefer to choose someone who lives in your region to minimize expenses.

• Opt for the universal legacy in divided shares instead of specific legacies (except for certain purely personal items or those with particular sentimental value). For example, instead of giving the cottage to Louise and the investments to Maxime, choose to bequeath all assets to your heirs, with the money divided after the liquidation of assets. If you wish to favor one of them, grant them a right of first refusal before the liquidation of the asset takes place and allocate its market value to their share during distribution. Want to disinherit a member of the estate? Specify this in the will and/or attach a personal note to it to reduce the risks of a contestation.

• Is one of the heirs a minor? Be aware that for any legacy exceeding $25,000, the law requires the appointment of a guardian or the establishment of a guardianship council until the child reaches 18. Fortunately, you can designate a guardian in the will.

• Life Insurance: Avoid changing the beneficiary in a single act. The name on the insurance policy should match the one in the will to prevent lengthy procedures. Insurers may not necessarily be aware of the will’s content at the time of death. A beneficiary listed in the policy but not matching the one named in the will, for example, after a separation, could be grounds for contestation.

• Power of attorney or legal guardianship has the effect of freezing the will; it is then no longer possible for the person involved to make changes. A protection mandate allows you to plan for the management of your well-being and assets in the event of potential incapacity.

WARNING: The information contained in this article, while of a legal nature, does not constitute legal advice. It is recommended to consult with a professional for advice that will address your specific situation.