Getting the most from estate planning

Contrary to public opinion, estate planning is about much more than making a will. The purpose of an estate plan is to make sure that, in the event of your death, your family is taken care of and your money is used in the way in which you choose.

Naturally, we all have different priorities when it comes to this area, be it providing for family, paying for school fees or donating to charity. Regardless of your personal situation, here are some tips for planning your estate effectively:

  • Consider your options

    If a valid will is not in existence when you die, you will be unable to control how your assets are distributed. Regularly reviewing your will is crucial to ensuring that it reflects your current circumstances, as is making sure that the beneficiary designations for plans like RRSPs and RRIFs are up-to-date.

    Provincial legislation can impact your plans, particularly if you are governed by more than one province or country so make sure that you factor this in too.

    Think about whether you would prefer to leave your estate to beneficiaries outright or through trusts. If you own a business, a family succession plan can be a good way to achieve this.

  • Appoint your representatives

    You should consider who you wish to be legal guardians for your children, as well as those who will hold powers of attorney and be executors and trustees for your estate. These roles come with a lot of responsibility therefore care should be taken when making your choice.

  • Consider using trusts

    You can set up an inter vivos trust while you are alive whereas a testamentary trust comes into effect when you die. Trusts can be an effective method of providing income to members of your family in certain situations and it is worth looking into whether or not they would work for you.

  • Think about jointly-owned assets

    It can be common for parents to register their adult child as joint owner of assets in order to reduce future probate fees. Though a popular option, problems can also arise so, as above, you should consider to what extent this option may or may not suit your own personal situation.

  • Estate freezing

    It is possible to freeze the growth of your family business, for example, at a moment in time to allow your beneficiaries to take advantage of the growth at a later date.

  • U.S assets

    If you are a U.S citizen who lives in Canada or, conversely, a Canadian with property ownership in the U.S you would familiarise yourself with U.S regulations, as a tax is imposed on estates.