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In 1926, a wealthy Toronto lawyer and practical joker by the name of Charles Vance Millar died. In his last will and testament Mr. Millar bequeathed the residue of his estate to the woman in Toronto who could produce the most children in the 10-year period following his death. The race became known as The Great Stork Derby and, in 1936, there were four winning mothers who each had produced nine children. They each received $125,000, which in 2011 dollars had the same buying power as $2,032,050.

When it comes to a last will and testament, Canadians can get as crazy as anyone. I've seen some pretty complicated wills. Some have been as thick as a phone book. It's enough to make any executor's head spin (my condolences if you have to administer an estate like this).

Today, I want to speak to those of you who have more than you need to live on and expect to leave behind assets of significant value. I'm going to share an idea that is going to make your last will and testament so simple that you might just breathe a sigh of relief. I'm talking about creating a "living structure."

The concept

The idea is to create a structuring during your lifetime – a living structure – that will ensure the financial assets you leave behind will be dealt with in an appropriate manner once you're gone. A last will and testament is different in that it creates a structure – some might call it a mess – after you're gone.

The problem with creating a structure upon your death by your will is that your heirs may not be prepared for what many might consider a complicated mess. Multiple trusts, a significant number of bequests, heirs being treated differently, and many more common issues can create hard work, family arguments and hurt feelings.

Don't get me wrong - creating a will is absolutely critical. There will almost always be assets that must be distributed under the terms of your will, but what if you could look after most of your estate today, while you're alive, so that there are no surprises to your family after you're gone?

Creating a living structure involves taking those assets that will one day be inherited by your heirs, or charity, and transferring those assets today into a structure – commonly a trust – in a manner that will continue to give you control and use of the assets, but that will also result in minimal disruption when you die.

The specifics

Consider an example. Charles has a significant estate and his children are due to inherit his assets one day. Further, Charles has a desire to give a sizable amount to various charities after he's gone. Charles also has concerns about his children simply taking full control of the inherited assets upon his death because he wants his children to establish productive lives, which could be jeopardized by a large inheritance, and he's not convinced they will deal with the assets appropriately just yet.

Charles could create a living structure by taking that portion of his assets that he expects he will not spend during his lifetime, and he could transfer some of those assets to a family trust today. In addition, other assets could be transferred to a private or public foundation for the benefit of charities.

What are the benefits of all this? This would create a structure that Charles can see in operation while he's still alive. Upon his death, the trust and foundation simply continue on. No disruption, other than perhaps naming a new trustee to replace himself. The trust agreement spells out the particulars of how the assets of the trust (which also includes the inheritance of the children) are to be managed.

During his lifetime, Charles will have had the opportunity to involve his children in the structure as trustees, or perhaps advisers to the trustees. This will help Charles educate his children on how to work within the structure, and to see his heirs working with each other. He can also watch his favourite charities benefit from his generosity during his lifetime by distributing assets from the foundation each year.

Charles doesn't have to give up control or use of the assets in the family trust while he's alive, but won't be shocking his heirs at the time of his death with something they've never seen before.

Your living structure might include trusts, holding companies, partnerships or foundations. Every family's needs are different.

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