“What must you do to avoid it?” I deliberated a moment; my answer, when it did come, was objectionable: “I must keep in good health, and not die.”
— Jane Eyre, Charlotte Bronte
As our young heroine, Jane Eyre cheekily put it, keeping well and life everlasting is an ambitious and noble intention. Yet, as reality would have it, estate planning is a crucial component of any complete financial plan. Despite common misconceptions, the process need not be overly complicated. Even so, with the guidance of your team of finance professionals, your peace of mind is worth the cost and effort.
“What’s involved?”
Estate planning involves arranging for your assets and putting things in place for your family, loved ones, and any charities you support in the event of death or incapacitation.
All of this can be an emotional process. Facing and overcoming such hurdles now can save your loved one’s time, stress, and conflict, not to mention potential legal and financial challenges when it matters.
“It’s only me, and I’m not that wealthy.”
No matter your marital status, having an up-to-date estate plan is critical for your finances and your family. An estate plan makes it easier for whoever will deal with your affairs.
The need for estate planning isn’t only for high-income earners or those who have amassed significant wealth. If you have savings, investments, or assets of any kind, you need an estate plan.
“I already have a will.”
While a will is an essential aspect of an estate plan, estate planning involves more. You want to ensure that beneficiaries are assigned as you wish, any minor children will have a legal guardian, inheritances will be set in place, and taxes will be well-managed.
“What about a joint will with my spouse/partner?”
A solid estate plan can help your family avoid probate taxes or other legal fees.
For example, the Canada Revenue Agency (CRA) identifies a disposition of assets when someone dies. Putting certain assets in a joint account can sidestep this deemed disposition and probate taxes, as can a Dual Will.
From a legal perspective, having a joint will can create restrictions and complications, especially in the case of separation or divorce. We recommend that clients think twice (or even thrice!) before considering a joint will, especially if children from previous relationships are involved.
Essential checks for when you do your estate planning include:
- Itemize your assets and liabilities
- Update your beneficiaries
- Assign legal guardians for your children
- Decide if you need a Trust or life insurance
- Set up your power of attorney and an executor, where applicable
- Plan for your taxes
By organizing your affairs now, you can focus on living life with added peace of mind. Let’s talk about it. Speak to your Foster financial advisor or our Family Office Group’s Financial Planner, Victor Todorovski CFA, CFP today.
Disclaimer: This article is for general information purposes only, and is not legal, financial, or tax planning advice. Everyone’s situation is unique, and this article cannot apply to every person. The reader should not take any action, or refrain from taking any action, as a result of this article without first obtaining legal or professional advice.
