ESTATE PLANNING INFORMATION

On Wills, Estates, Trusts Law for residents in Canada  

Estate planning is one of the topics that are often avoided by individuals for the reason that it deals with attitudes and feelings about business arrangements, death, property ownership, marriage and family relationships that they or other family members may not be ready to contemplate.  An estate plan is a tool that provides some aspect of control to property of an individual who has worked so hard to accumulate it.  If one doesn’t bother to make a plan, the provincial government will determine what happens to his/her real and personal property upon his/her death.

A good estate plan can only be created in recognition of one’s personal circumstances that includes both family and financial.  While working with a professional advisor, the following things are to be considered as the canon of sound estate planning:

1. Full disclosure of all assets and liabilities;

2. Full disclosure of one’s needs and objectives, particularly

    regarding family members

3. Full disclosure of any existing estate plan;

4. Full and open communication with the professional advisor

    concerning the existing plan’s merits and disadvantages,

5. Full and open communication regarding the prospects for

    improving or replacing the existing plan and the consequences

    of the various choices.

Who Should Have An Estate Plan?

Everyone can benefit from the development of an estate plan.  Young or old, wealthy or middle class, an estate plan can reduce the taxes and expenses of an estate, simplify and speed the transfer of assets to the next generation and can also ensure that beneficiaries are protected.  Estate planning should be a financial priority at almost any stage of life. In fact, sometimes the terms estate planning, financial planning and retirement planning are interchangeable and refer to the same kind of planning.

Why is Estate Planning Important?

An estate plan defines how an individual wants his assets to be owned, managed and preserved during his lifetime and how he wants them to be dispersed after his death. It is important to ensure a simple, tax-efficient and organized transfer of an individual’s assets to loved ones.

Drafted properly, an estate plan can do the following:

1. Divide the assets of an individual the way he wants them to

    be divided.

2. Determine how the assets of an individual are owned,

    organized and managed while he is alive.

3. Minimize the income taxes at the death of an individual.

4. With an estate plan in place, an individual can transfer the

    ownership and minimize the taxes incurred on them.

5. Minimize the individual’s costs and fees at death.

Documents in an Estate Plan

There are three basic documents that form the foundation of an estate plan: a will, an enduring power of attorney, and a personal directive.  Additionally, certain individuals and families can benefit from more specialized services, such as the creation of a family trust.

Estate planning is an important exercise one undertakes to preserve his wealth for his family and to arrange for its orderly devolution to his heirs.  It can involve wills, powers of attorney, inter vivos trusts, testamentary trusts, living wills, life insurance, critical illness insurance, long term care insurance, registration of assets in joint ownership, tax planning and business succession planning.