Estate planning is such an important part of planning the last days of one’s life. Not only does it ensure their final wishes are honored regarding property and health, but it can also provide comfort and relief to loved ones in their absence.
This crucial area is often overlooked or put off because of more immediate issues, but can be a mistake that cannot be undone. A comprehensive estate plan could be the solution to a number of legal concerns that arise when a loved one has passed away.
What is Estate Planning
Essentially, estate planning is the process of anticipating and arranging for the management and disposal of a person’s estate during the person’s life in preparation for a person’s future incapacity or death..
A will is an important part of estate planning. This document is a clear statement of your wishes and allows you to have some control over who gets what after you’re gone. Knowing your intentions will save loved ones time, stress and money at a difficult time and give them confidence that they are carrying out those wishes.
Every adult who owns assets or has a spouse or young children should have a will. The person you appoint to carry out the instructions within your will is called an executor. Choosing an executor is up to you and if you are a parent, you can appoint a guardian to take care of your children if they are under the age of 19 after your death.
If you pass away without having made a will, the law says how your property will get distributed, and who has the right to “administer” your affairs.
Areas to Consider in Estate Planning
There is more to estate planning than drafting up a will. Below are some common areas to consider when planning.
Joint
Assets
Trusts
A Designated Beneficiary
Charitable
Gifts
Common joint assets include a joint bank account or a home owned by two or more people. The surviving owners of the joint asset have a right of survivorship. This means that the surviving owner will legally obtain the home when you pass away.
*Advantages of owning a home as a joint asset is the estate does not owe probate fees, which are paid to the court based on the value of the estates assets.
You can name a beneficiary of your life insurance policies, registered retirement savings plans, registered retirement income funds, and tax free savings accounts. They will get the proceeds when you pass.
If the beneficiary survives you by at least five days, the proceeds flow outside your will to them directly from the company holding the plan, and not from the estate.
Trusts are established to preserve assets for a specific purpose such as educating children or caring for someone with special needs or for tax planning purposes.
They are created in a way that is tax effective and that ensure funds are protected for the intended purpose.
*Depending on the size of your estate, you may want to set up a trust (outside of the will) to protect your estate against a wills variation claim.
You can reduce the income tax owing from the sale of your assets on your death by making charitable gifts in your will.
Clients often include a charitable aspect to their estate plan. We help by ensuring that the format achieves the clients’ personal and tax objectives.
We will collaborate with accountants and financial advisors to ensure a strategy is put in place that is optimal for you and that hopefully avoids family conflicts. When there are legal challenges we have the necessary experience to advocate for our clients through the difficult times.