Estate Planning
Are you prepared?
Preparing a Will requires careful planning and consideration of your assets, debts, and beneficiaries. It's important to involve family and professional advisors to create a Will that reflects your wishes. We can work directly with your trusted legal counsel to incorporate these services into your holistic wealth plan.Key steps include documenting assets and ensuring accessibility for executors. Consider factors like property ownership, beneficiary designations for insurance and pensions, and arrangements for business ownership or loans. Thoughtful preparation ensures clarity and fairness for your beneficiaries.
Beneficiaries of Your Estate
Preparing your Will often involves leaving assets to a spouse directly or through a trust, while naming beneficiaries for insurance or pensions to bypass probate. Trusts can manage children’s inheritance until a specified age, with flexibility for their needs. If you have no heirs, consider naming relatives, friends, or charities. Clear planning ensures your wishes are honoured.
Choosing an Executor
Choosing an executor is vital for managing your assets, debts, taxes, and estate administration. Naming alternates and selecting someone in your jurisdiction eases the process. Many couples name the surviving spouse, while complex estates may involve professional trustees. Executors can also serve as trustees, ensuring your estate aligns with your wishes.
When to Review Your Will
Review your Will whenever major life changes occur, such as marriage, divorce, births, deaths, or significant asset changes, and ideally every 3–5 years. Without a Will, provincial laws decide how your estate is distributed, which may differ from your wishes. Intestacy can lead to costly delays, court-appointed representatives, and restricted asset handling, making it crucial to have a Will in place.
Power of Attorney
A power of attorney allows your appointed attorney to manage property and finances if you’re incapacitated. It can be general or limited, and in most provinces, may remain effective after incapacity with proper wording. It’s typically done alongside a Will, which becomes effective only at death, whereas a power of attorney applies during your lifetime. A POA faces restrictions, such as not making Wills or beneficiary designations. A POA for personal care lets the attorney decide on life-sustaining measures and care. Naming alternates is recommended for both roles to ensure seamless management.
Income Tax & Capital Gains
When a taxpayer dies, capital assets are deemed sold, and RRSPs and tax-favored accounts are included in the final income, leading to potential income tax liabilities. Deferring this liability is possible through asset transfers to a spouse or spousal trust. Trusts may face high tax rates, so professional advice is essential to address tax implications and explore strategies to minimize estate taxes, including life insurance for coverage.