Estate Planning
HOLLISWEALTH ANCASTER
Protecting Your Legacy
Estate planning involves considering what to do with your accumulated assets after you pass away. Considering that no one likes to think about their death or talk about money, this process is left incomplete by many Canadians who otherwise have their financial lives in order. This is a vitally important component of financial planning: ensuring that your surviving loved ones are taken care of as quickly and completely as possible.
The good news for Canadians is that there is no “estate tax” owed when your estate is transferred to your heirs. Depending on the size and type of assets in the estate, “deemed disposition taxes” may be owed that would severely impact the size of the estate that is passed on to your heirs. Estate planning ensures that your assets are properly organized and invested as to minimize the impact these taxes will have on the financial life of your heirs.
One misconception about estate planning is that it solely encompasses what happens after you pass away. In reality, the process of estate planning includes creating powers of attorney and personal directives that ensure that your wishes are carried out should you become incapacitated in any way.
Trained Estate Planning Professionals
Another common misconception is that estate planning is complicated and expensive and that families without large estates don’t need to bother. Estates of all sizes do benefit from being organized with the help of a trained estate planning professional. You can save yourself time and money by organizing your financial information and determining your goals and directives prior to your initial meeting. This way you can spend that time working through the details of your estate, rather than establishing what needs to be done.
At the very least, everyone should have a simple will which is inexpensive when you consider the amount of distress and future costs it can prevent. Larger estates may require additional layers of estate planning tools, such as trusts, in order to ensure a proper dispersal of assets. Still, the more preparation that is done in advance, the easier and less expensive the process will be.
4 Facets of Proper Estate Planning
As we have said, estate planning is not just about ensuring your wishes are known after you are gone. It’s also about ensuring that your wishes are known while you are still here, if something happens to incapacitate you. During the estate planning process, you and your advisor will work together to create documents that will protect you and your assets, no matter what happens.
Your Will
This is the most basic part of estate planning. At the very least, everyone should have a simple will that outlines your wishes upon your death. It is crucial that this document is drafted well and carefully as unclear or murky wills can result in extra costs to your survivors as attorneys and the courts try and determine how to execute it once you are gone.
Power of Attorney
This legal document will ensure that someone you trust takes care of your personal financial matters should you become incapable of doing so. It is important to choose someone you trust as this person will have control over all your assets. This includes paying bills, filing tax returns, overseeing investment decisions, banking and any other financial matters important to you.
Personal Directive
This legal document is similar to an enduring power of attorney in that you use it to bestow decision making powers to a trusted individual should you become incapable of making them yourself, but can be tailored to specific areas of your life. One area in which many people choose to have a personal directive in place is for healthcare reasons. It is vitally important that you have a loved one assigned to carry out your healthcare wishes when you are no longer able to make those wishes known.
Tax Planning Strategies
While no estate tax will be collected from your estate after your death, “deemed disposition taxes” may be owed that will impact the financial life of your survivors. Estate planning can help you prepare and plan for those taxes, as well as figure out the best ways to organize your assets to minimize the impact of these taxes on your survivors.
Your In Good Hands With HollisWealth Ancaster
No matter where you are in the estate planning process, whether you haven’t even begun to think about creating a will or you need help putting the final tweaks on your estate plan, we can help you ensure a bright financial future for your heirs.
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