Estate Planning: 4 Critical Things To Consider First

When thinking about estate planning, most people think about their Will and planning out what should happen in the event of their deaths.

However, what if you are disabled or mentally incapacitated or fall seriously ill? It’s important that you have an estate plan in place to account for these kinds of contingencies.

Let’s explore 3 critical things you need to consider when preparing to put together your estate plan:


1. What documents do I need when I start estate planning?

You want to make sure to have a will, durable power of attorney, and health care proxy and/or living will. A living will is a legal document where you dictate your own wishes, while a health care proxy form assigns and gives a person authority to make medical decisions on your behalf. You will also want to organize and have handy a list of important contacts and phone numbers, any pre and post-nuptial agreements, original marriage certificate, beneficiary designation forms, health and life insurance information. divorce decrees, previous wills, deeds of real estate property, appraisals, and latest tax returns.


2. Who are my beneficiaries?

When you pass away, the fair market value of your RRSP or RRIF is included in your final income return. If your spouse is the named beneficiary of your RRSP or RRIF, the plan and its assets can be transferred into their RRSP or RRIF on a tax-deferred basis.

If your spouse is not the named beneficiary, the funds go to your estate which adds complexity as your spouse and the executor of your would have to file a joint election with the CRA to transfer the funds.

If someone other than your spouse is the named beneficiary, all of the assets will be passed to that person. However, keep in mind that your estate will be liable for income tax on the amount.


3.  Do my beneficiaries know how to find my estate planning documents?

If something ever happened to you, do you beneficiaries know the location of your files and how to access them? These are highly confidential and personal files that you don’t want in the wrong hands because of the risk that they may be used for identity theft. While it’s important to safeguard these documents, you want need to make sure your beneficiaries know how to ‘unlock’ them. If they are in a safety deposit box, do they know which bank it is in and where the key is? Are they in a locked filing cabinet? Digital files on your computer behind a password-protected account? Have a plan in place to make these documents available under specific circumstances to the right people that you trust.


4. Do I Have A Certified Financial Planner To Help Me Plan These Important Decisions?

Ready to start the estate planning process? The team at Pension Solutions Canada is here to help. We specialize in helping individuals prepare for retirement and manage and protect their assets.

Click here to download our Estate Planning Worksheet.

Let us review your estate and income streams in retirement. We’ll help with retirement planning, estate planning, address tax minimization, and connect you with a certified attorney. Call us at 1-888-554-6661.

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