Ten Estate Planning Tips to Protect Your Estate and Your Family

1. Make sure you plan and discuss with your family and professional advisors how you want your estate to be distributed; don’t keep everybody in the dark until the end.

2. Draw up a Will with a lawyer. Dying “Intestate” (without a will) increases costs, takes away control of your family’s assets, and adds stress for your family.

3. Keep all your valuable papers together such as insurance policies, wills, bonds, investment records, birth certificates, marriage certificates and social insurance numbers. Be sure your family knows where they are; don’t leave it to a game of “hide & seek” after you’re gone.

4. Review your life insurance and keep your program up to date. It is the most cost effective way to create the cash to pay bills and provide income. (This is where Life Guard Insurance can help)

5. If you have insurance, consider a named beneficiary if it is appropriate. Naming your estate could slow down receipt of monies to pay bills and provide income. Having the proceeds paid to the estate increases executor’s fees and gives one more opportunity for the proceeds to go to the wrong people.

6. Explore leaving property and investments as “Joint with rights of survivorship” so ownership can be changed with the least cost, “red tape” and time delay.

7. Name a beneficiary in your RRSP or RRIF or put an RRSP-RRIF clause in your will to eliminate the potentially biggest tax bill possible. The total value of your RRSP/RRIF could be added to income and taxed at the highest rate, reducing income to survivors. A “spousal beneficiary” defers this tax.

8. Keep some of your assets “liquid” so that there is cash to pay bills upon death. This allows flexibility to preserve the value of the estate and avoids a forced sale of assets.

9. Suggest that your potential survivors seek advice and do postmortem tax planning. If you’ve done a good job of creating your estate plan, your family will need competent advisors to help manage the assets.

10. Annually, fill out a Net Worth Statement showing a detailed list your assets, where they are, and their current values. Prepare an Income Statement showing all current income sources, and also make a list of the type of income and amounts which continue after death.

Estate Planning Canada

Estate planning strategizes how, when and to whom, the proceeds of your accumulated wealth will be distributed

Do you know all the legal and tax ramifications that are set in motion when you die? These restrictions impact the value of your estate, its obligations and your loved ones. Life insurance planning is a key part of Estate Planning, but only one part of the picture. At Life Guard Insurance we believe it’s better to start Estate Planning with the help of professionals — a lawyer with estate experience and an accountant who understands estate taxes and the power of designing Trusts. As your insurance broker, we also play a significant role in the final Estate Plan, but insurance should never drive your plan.

To create a final Estate Plan, you need a thorough accounting of all your assets. You then need to identify your desires for division of assets and passing on your inheritance. And finally, you need to look at all the pitfalls that could get in the way of fulfilling your wishes. Without a complete and well thought-out plan, the wealth you have built spent your lifetime building can be eaten away by:

  • Taxation
  • Family conflict over your will
  • Excessive legal costs
  • Double taxation
  • And many other pitfalls

Life Insurance is a cornerstone of good Estate Planning
An exempt insurance policy is the most cost effective way to create tax-free cash flow at death. This easily accessible cash is very beneficial during settlement of assets. Life insurance proceeds can be used to pay off the final tax bill to the estate from CRA, thus preserving the wealth in the estate. Life insurance proceeds can also be used to fund charitable donations through the estate, which creates very favourable tax deductions. It is also a way of moving wealth to a direct named beneficiary without public disclosure of assets through the will and wealth losses due to legal, executor and probate fees.
Estate planning is complicated. You need a team of experts to build a comprehensive plan for you. Life Guard Insurance has access to the best Estate & Tax Lawyers and Accountants in Canada to assemble your estate planning team. Do you have a solid estate plan in place? If not, or if you would like a thorough review of your estate plan contact Life Guard Insurance.