Three Essential Steps To Efficient Estate Planning
Wednesday, October 25, 2006
The Unintended Heir
“…and to the Taxman, I leave half of my retirement savings.”
If you were writing your will today, would you include a gift to the tax collector? Many Canadians do just that by not planning, or by not having a will in place.
It is possible to avoid the unintended heir by discussing your estate planning wishes with your lawyer, insurance specialist, financial advisor, and accountant. It is possible to leave more to your family and less to taxes by planning for this transfer of family wealth.
A common tactic is to utilize a universal life insurance tax shelter, the proceeds of which are paid out tax-free to heirs for pennies on the dollar. These proceeds also by-pass probate for those who wish to avoid this expense. Universal life is particularly attractive to high net worth investors who stand to lose vast amounts of family wealth to taxes, and wish to minimize the impact of taxes on their estates.
Making Your Will
Every adult over the age of 18 should have a will in place. Your will is the cornerstone of your estate plan, because it leaves legal instructions to those left behind as to how your estate is to be distributed.
Your will should be made with a lawyer who specializes in estate planning. Avoid do-it-yourself will kits.
In your will is where you name your executor (called an “estate trustee with a will” in Ontario.) Your executor is the person you select to carry out your wishes. Be sure to have a back up executor named just in case the first one is unable or unavailable to fulfil the duties involved.
There are certain qualities your executor should possess, and this should be the topic of discussions with your advisors. Also, be sure to talk to the person you want as your executor to make sure they are agreeable to this task. An executor’s job can easily last months or even years.
Powers of Attorney In Ontario
In Ontario we have two kinds of Power of Attorney. One is referred to as Power of Attorney for Property, and the other is referred to as Power of Attorney for Personal Care.
Power of Attorney for Property is a legal document that allows another person to handle your financial affairs in the event that you are incapable of doing so. The Power of Attorney exists while the person granting it is alive, and ceases upon death. Upon death, the will takes over for estate settlement.
Power of Attorney for Personal Care is a legal document that allows another person to make decisions regarding personal care, such as proper housing, medical attention, nutrition, hygiene, and so on, in the event that you are incapable of making these decisions yourself. This authority also ceases upon death.
"Robert Packman is extremely efficient – the type of guy you would like to deal with if you have a problem."
**DFS Investments Disclaimer:
Commissions, trailing commissions, management fees and expenses all may be associated with mutual funds investments. Mutual funds are not guaranteed and are not covered by the Canadian Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be repeated. This site do not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. This site is intended for Canadian residents only and the information contained herein is subject to change without notice. DFS Investments will not be held liable for any inaccuracies in the information provided. References in this site to third-party goods or services should not be regarded as an endorsement of these goods and services. The owner of this site is not liable for any inaccuracies in the information provided.
