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Thinking about Putting Off Death?
by Terry Fay
Thinking about death and putting off planning your estate — one is difficult and the other is very easy. Together, if they remain ignored, the two can combine to create a sticky situation for you and your beneficiaries.
Without careful planning, your estate may be tied up in the courts for months or even years. The government could end up collecting more taxes than is necessary. And, most importantly, how your legacy is disbursed may be decided for you, not by you.
Every Canadian adult — regardless of your financial situation — should have an up-to-date estate plan that outlines the following:
- who is responsible for distributing your assets
- who gets what and when they get it
- who will take care of your children
- who will manage any trust accounts; and
- who will make financial and medical decisions if you’re incapacitated.
To take control of your estate, we suggest the following five steps:
- Determine your estate planning goals.
- Consider which estate planning tools fit your situation best.
- Choose the people you would like to speak for you.
- Start raising estate-planning issues with your family.
Keep your estate plan up to date.
Depending on the complexity of your estate, you may require the services of a lawyer or notary, a financial advisor, an accountant, an insurance agent or a trust officer.
Developing a complete estate will require much more than a will. Depending on your personal situation, you will need to consider a combination of the following components:
Will: the core document in your estate that identifies an executor, distributes your assets and names a guardian for your children if they are still minors.
Trust: is established to take care of assets you don't want transferred immediately after your death or to manage investments for beneficiaries who are incapable of doing so themselves.
Life insurance: can ensure your heirs aren't negatively impacted by their inheritance, or to pay your funeral expenses or final taxes.
Living will: sets out your preferences for medical care if you're unable to express them yourself. This concerns continuing life support and similar important decisions.
Organ donor cards: is an official statement of whether you would like your organs to be salvaged for someone who would benefit from a transplant. You will also need to discuss this with your family as doctors may need their consent as well.
Funeral arrangements: helps decide how you would like to be remembered.
Business succession plan: decides what will happen with a business you own in part or whole. There are complex rules regarding selling a business or passing it to heirs.
In Canada there are no "estate taxes" - taxes owed on the entire value of an estate. However, your estate may be subject to probate or income taxes. These are paid out of your estate, reducing the amount paid to your heirs. Taxes are important considerations when planning your estate.
Insurance products provided through Dundee Insurance Agency Ltd.
This article was prepared by Terry Fay who is an Investment Advisor with Dundee Securities Corporation, a DundeeWealth Inc. Company. This is not an official publication of Dundee Securities and the author is not a Dundee Securities analyst*. The views (including any recommendations) expressed in this article are those of the author alone, and they have not been approved by, and are not necessary those of Dundee Securities.
The particulars contained herein were obtained from sources which we believe reliable but are not guaranteed by us and may be incomplete. The opinions expressed have not been approved by and are not those of DundeeWealth Inc., its subsidiaries, or its affiliates, including, but not limited to Dundee Securities Corporation, Dundee Private Investors Inc. / Ltd., Dundee Insurance Agency Ltd., Dundee Bank of Canada and Dundee Mortgage Services. This website is not deemed to be used as a solicitation in a jurisdiction where this Dundee representative is not registered.
Insurance products provided through Dundee Insurance Agency Ltd.
Only securities related products and services referenced are offered through Dundee Securities Corporation.
Dundee Securities Corporation, Member CIPF, is a DundeeWealth Inc. Company
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