Family Estate Planning

The first question people ask us when we bring up the subject of Estate Planning is “Why does it matter to me?” We find that many people assume that estate planning is only for the wealthy. This couldn’t be further from the truth. What becomes clear to families of all the Canadians who die every year without a will is the disbelief when the province takes control of the estate to decide how the assets are to be distributed. Even for smaller estates, the costs and delays of probate can have devastating consequences.

The goal of estate planning to Northern River Financial is to arrange your financial affairs in a way so that your assets can be passed to your heirs efficiently and expediently. The good news for Canadians is that no estate tax is owed when an estate is transferred to your heirs after you die. The bad news is that, depending on the type of assets in an estate, there may be “deemed disposition tax” that could seriously disrupt the financial lives of your surviving family. Estates that are properly planned have assets arranged and titled in such a way as to minimize any taxes payable.

Key considerations

  • Wills and powers of attorney
  • Income tax and estate freezing
  • Life insurance
  • Testamentary and inter vivos trusts
  • Charitable gifting

Estate planning tools such as trusts can be established to reduce tax exposure. Contrary to popular belief, estate planning is not just planning for death; it is also essential to ensure that your affairs are handled in accordance with your wishes while you are alive. Should you become mentally or physically incapacitated and unable to manage your own affairs, tools such as powers of attorney become important life planning documents.

People avoid estate planning because they think it is complicated and expensive. However, for most estates, is not true. It does usually require the expertise of an estate planning professional such, as a Certified Financial Planner, accountant, or attorney to execute the legal documents. Significant time and expense can be saved by organizing your financial information and determining your goals and objectives prior to meeting with a professional. At the very least, everyone should have a simple will which is inexpensive and can alleviate significant distress and costs incurred without having one. Larger estates may require additional layers of estate planning features, such as trusts. The more preparation done in advance, the easier and less expensive the settlement of the estate will be.