Top Estate Planning Strategies For Canadians

You need to get your affairs in order so that if you died yesterday, it won’t be a mess for your family. Make sure your assets are given/dispersed in a tax-efficient manner.

You’ve probably heard of ‘Estate Planning’, but what is it exactly and how can you benefit from it?

If you don’t have a comprehensive estate plan, then the province takes over to divvy up your estate. You don’t want your estate landing in the hands of the Ontario government to be managed!

Estate planning is when you anticipating and arrange a plan for how you want your estate, during your life and after your death, to be managed in a way that minimizes the possible taxes and fees that may be charged to your property (income, transfer, estate, and other taxes). By planning for tomorrow today, you’re also able to protect your estate and make sure that you leave a lasting legacy for your family upon your passing.

The term “estate” refers to all the property and assets you own or have control of. This may include real-estate properties, accounts, bonds and stocks, cash, buildings and establishments, jewelry, collections, all types of businesses and even retirement benefits.

Estate planning is much more involved than just what you put in a simple Will. Your Will is part of your overall estate plan, but you also take into account your power of attorney, trusts, beneficiary designations, property ownership, your home, business succession, investments, insurance, living trusts, limited partnerships and other benefits you are entitled to or have control over. It also includes contingency preparation and your personal wishes regarding health care; reducing or eliminating uncertainties and making it very clear how to administer medications if you become sick or disabled, unable to decide for yourself.

Estate planning isn’t something to be contemplated when you reach the ripe old age of eighty. Anybody, irrespective of age, with considerable assets should have a plan in place. Remember, death or a debilitating illness affecting your legal capacity to contract might strike you any day, you should prepare for that eventuality beforehand. An estate plan made during an illness affecting contracting capacity can be challenged, complicating matters for beneficiaries.

It is important to prepare and implement an estate plan while the individual is alive and of peak mental health to make rational decisions. Why? Because this is the perfect time for a person to perform and have the legal capacity to come up with a contract. There may be challenges that could occur if an estate plan is implemented once a person is already disabled, and that individual may be more prone to fraud, abuse and coercion.

When entering into an estate planning contract, it is very important to make use of the services of a lawyer to help you prepare and fill out the correct legal paperwork. They can make sure all of the legal requirements needed in the estate plan are met, will be able to answer legal questions regarding your estate, and can advise you on the sensitive decisions and legal matters that benefit you. If you don’t have an attorney to help, Pension Solutions Canada can refer you to one.

Here are four steps you get you started with setting up your estate plan:


Step 1: Take Stock Of Your Possessions

The first step in planning your estate is to take stock of all your material possessions (technically referred to as ‘estate’), and then determine their value. Typical items comprising the estate include: house(s) and land; bikes, cars, planes and boats; cash-in-hand; savings accounts, pension accounts; certificates of deposits; stocks, bonds, and mutual funds; insurance and annuities; employee benefits; jewelry, furniture, art collections; ownership rights/interests in businesses; and claims against others. Mind you, the list is not exhaustive and your debts and obligations to others are also a part of your estate.


Step 2: Line Up Your Beneficiaries

Names, addresses, ages, you should determine who should be the trustees/guardians in case the beneficiaries are minors at the time of planning the estate.  Also, you must identify an executor of the estate.


Step 3: Organize Your Documents

Organize and put together 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 before you consult a professional estate planner.


Step 4: Consult A Professional

Though small estates might be easy to plan, it is advisable to take the help of professional estate planners to explore all the possibilities to reduce tax and expenses. Keep in mind that estate planning is not a one-time affair, so it is important to have a professional you can work with to keep your plan updated. Any change in your marital status, death of beneficiaries, a birth of a child, or changes in the law will require a review of the plan.

Estate planning is often put off until it is too late.  Imagine that you are suddenly ill or you die. Your partner or your children are not aware of your most recent estate information.

As your financial advisors, we could be called upon to offer guidance or information to your family in that time of need.

Please put us in a position where we can help.

Click here to download our Estate Planning Worksheet.

The team at Pension Solutions Canada specializes 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 estate planning, retirement planning, address tax minimization, and connect you with a certified attorney. Call us at 1-888-554-6661.

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