Sasha and Anna have recently married and live in Toronto. This is the second marriage for Sasha
Question:
Sasha and Anna have recently married and live in Toronto. This is the second marriage for Sasha and Anna as they have both been married and divorced. Sasha has one child, named Paul (aged 12), with his first wife Isabella. When Isabella and Sasha divorced, they split all their assets amongst themselves except a cottage which they continue to hold in joint names. Sasha’s ex-wife wants to change the ownership of the cottage to tenants in common. Their intention was for Paul to inherit this cottage after Sasha and Isabella die. Sasha rewrote his will after separating from Isabella using a home will kit. He named Paul as the beneficiary in his will and Paul is a beneficiary on his RRSP. Sasha did not name a beneficiary on any of his other investments. He wrote his will before he got married to Anna and has not updated his will since getting married to Anna.
Anna has no children from her previous marriage and her former spouse, Ian, now lives in another country. They divorced amicably and split all assets evenly between them. Anna is pregnant and the child is due in 2 months time. She is concerned that Sasha has a will which does not include this new child but Sasha refuses to rewrite his will. She is planning to rewrite her will next week and give extra amounts to the new child because Sasha will not re-write his. Sasha and Anna have the following assets:
Asset | Value | Ownership |
Cottage | $1,200,000 | Sasha and Isabella- Joint owners |
Apartment and contents | $900,000 | Sasha and Anna- Joint owners |
RRSP | $350,000 | Sasha |
RRSP | $140,000 | Anna |
Investments | $320,000 | Sasha |
Investments | $400,000 | Anna |
Joint bank account | $20,000 | Sasha and Anna- Joint owners |
Car | $15,000 | Sasha |
Car | $23,000 | Anna |
Anna’s mother is starting to show signs of dementia. She is forgetting a lot of things, and last week she tried to purchase a plane ticket to Ecuador but cannot travel as she needs support to travel. Anna’s mother is a widow and has never completed any estate planning. She currently holds about $500,000 in investments. Anna realizes that her mother will not be able to live alone much longer. Anna wants to help her mother take care of her assets and has come to you for advice. Anna has three siblings whom each have 2 children.
Required (continued next page):
- Explain to Sasha what will happen to his cottage if he should pass away under the current arrangement of ownership and what would happen if ownership was changed to tenants in common.
- Explain to Anna who would get the following assets Sasha owns should he pass away today and why.
- Apartment and contents
- RRSP (Sasha’s)
- Investments (Sasha’s)
- Identify two things Anna's mother needs to do regarding estate planning and one issue with Anna’s mother making estate planning choices.
Expert Answer:
1 i In the current arrangement of the ownership if Sasha dies then his wife will become the sole owner of the cottage because Sasha has not written an... View the full answer
