The passing of a loved one is  a challenging enough experience to go through. Add in a loved one's unknown financial situation and a host of other issues can be revealed for the surviving family to contend with. When a loved one leaves behind financial assets, the disbursement of those assets can sometimes cause hard feelings or outright fights between family members. But what does the bickering accomplish?

Who receives my money when I die?

The most common types of investment accounts, registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs), allow you to name beneficiaries who will receive the funds when you pass away. It leaves little room for fighting as your wishes are recorded in writing.

Who determines what happens to my other assets?

Your will may determine who receives what of your non-registered accounts and financial assets. Sometimes, beneficiaries of a will believe they have more power than they actually do. The person who administers the estate at this point is the executor or executrix, not the beneficiaries. For those that aren’t familiar with estates, this can come as a surprise. 

Beneficiaries certainly have the right to ask questions about their interest in the estate, like the listing price of a house whose sale funds their inheritance. Still, the executor holds the power to sign off on the sale. 

Who should I name as executor?

Carefully selecting your executor is a crucial part of avoiding conflicts amongst your beneficiaries. If your beneficiaries perceive that you are playing favourites, it can set the stage for bad relations when it comes time to make decisions about your estate.

The most straightforward way to avoid conflict between beneficiaries or your executor is to speak with each of them, separately or together, so everyone knows their roles and your expectations of their process ahead of time. This isn’t unusual; your will shouldn’t be a surprise to your family (unless, perhaps, when your situation is unique and requires attention to other details).

Your executor will be better equipped to make smart decisions that keep everyone happy if they have professional advice guiding their process. Consider introducing your financial advisor to your executor so they can work together upon your passing to disburse your estate as you wish.

Above all else, develop a plan if you don’t have one. It will save your family time, money, and stress knowing you’ve taken care of the details and recorded what you want to be done.

Source: https://www.advisor.ca/tax/estate-planning/how-much-power-do-beneficiaries-actually-have/ 

The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This article was produced by Advisor Stream for the benefit of Rick Irwin, Financial Advisor at Trinity Wealth Partners, a registered trade name with Investia Financial Services Inc. The information contained in this article does not necessarily reflect the opinion of Investia Financial Services Inc. and comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities.
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