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Advisor shaking hands with clientEstate planning might sound like a tool for the wealthy. But the truth is, just about everybody has an estate. Most of us need a plan to ensure it is properly distributed to family and other beneficiaries when we die.

For financial planning purposes, your estate isn’t a mansion or a huge tract of land. Rather, it’s everything you own, plus anything that will be received after your death — such as proceeds from a life insurance policy, or pension payments that continue after you die.

If you don’t make provisions for the disbursement of your wealth, it could end up in the wrong hands. You need a strategy for transferring personal and business wealth from investments and other assets as quickly and tax efficiently as you can.

Basic Elements of an Estate Plan (Click each subtitle for more info.)

A Will

A properly drafted Will ensures that your wealth is distributed according to your wishes. Without formal instruction, provincial legislation will determine how your assets are divided – which could have little to do with your wishes.

Tax plan

You can reduce taxation of your assets by structuring them properly while you’re alive. In Canada, your estate won’t face death taxes as it would in some countries. But for income tax purposes some of your assets may be deemed to have been “sold” when you die, which means the estate could face a hefty tax bill for items such as capital gains. A number of strategies can help ease the tax burden, including transferring assets to children while you’re alive. Trusts within your will can also be used to save tax for beneficiaries after you are gone.

Life insurance

Life insurance coverage can supplement your wealth and help provide financial security for your beneficiaries, and can be utilized to pay the taxes that may arise on death, thus preserving capital accumulated.

Business succession plan

Business owners should have a plan for their enterprise. This may involve selling the business and distributing the assets to heirs, passing it along to children or stipulating who should manage the business. In most cases, the succession process should begin long before retirement, not at the time of retirement or when you die.

Enduring Power of Attorney (POA)

Balance scale #LegalSavingsPlanYou may need help with your assets while you are alive. If you are incapacitated and unable to manage your financial affairs, an enduring POA can give a trusted spouse, friend, or relative the power to manage your affairs. Quebec residents should speak with their financial and legal advisors about mandates in anticipation of incapacity. Residents of British Columbia should look into the implications of the British Columbia Representation Agreement Act.

An estate plan should be considered part of an overall financial plan. Your estate plan takes your strategy one step further, allowing the wealth you build to provide for your loved ones after your death.

Ask your financial and legal advisors how to get started on an estate plan. This is one area where good professional advice is crucial.

Make it a great day!


P.S.  What am I thankful for today?  I’m thankful to be home safe.  I’m thankful for the abundance of love in my life.  I’m thankful my children are all safe.

What are you thankful for today?

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