Although estate planning isn’t a pleasurable task, it’s required so that you can effectively transfer all of your assets to the people of your choice once you pass away. With a little mindful planning, your beneficiaries can avoid or significantly minimize needing to pay estate and income taxes on your assets, as well as unnecessary fees, and expenses. Plus, it helps bring clarity and decrease stress for your loved ones during the difficult time of mourning your loss.
Here are some common mistakes you can avoid when planning your estate:
- Procrastinating. The most common mistake when it comes to estate preparation is procrastinating and not getting around to doing it at all. At the very lease, take the time to prepare at least the monetary portion of your estate so that you leave your beneficiaries with some security and peace of mind.
- Not updating or reviewing your Will on a regular basis. You should check it at least every 2-3 years to make necessary revisions. There are elements that can cause information to be changed about your beneficiaries such as deaths, adoptions, births, or divorces. These changes in your family could change who you want to leave your assets to.
- Not thinking you need an estate plan. Avoid the trap of believing that you don’t need to estate plan because you don’t have a lot of assets and consider your estate to be ‘small’. No matter what amount of assets you leave behind, it’s important that they are managed and dispersed according to your wishes. You also might not realize how big your estate really is, once you take into account the value of your home, all of the assets contained within it, as well as any life insurance policies you have.
- Presuming that you’ll have to take a tax hit on all of your assets. Talk with a certified financial planner about strategies you can use so that your beneficiaries can minimize paying taxes on your possessions or avoid taxes entirely if possible.
- Not taking guardianship of your children into account. It can be easy to focus on your property and assets when planning your estate succession plan, but don’t forget about your children. They need to be appointed guardianship. There are many details to take into consideration when it comes to guardianship, and is something you don’t want to leave up to the government to decide on your behalf.
- Not seeking out help from a financial advisor. If you don’t have a financial advisor, contact one today. Financial Planners and Advisors are skilled thoroughly in these matters and can assist you with creating a proper succession and estate plan. It is your duty to protect your assets and ensure they are managed according to your wishes. It pays to be prepared. Take advantage of the services that a Financial Advisor has to offer.
Click here to download our Estate Planning Worksheet.
The team at Pension Solutions Canada is here to help. We specialize in helping individuals prepare for retirement and manage and protect their assets. Let us review your estate and income streams in retirement. We’ll help with retirement planning, estate planning, and tax minimization strategies. Call us at 1-888-554-6661.
