Estate Planning

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Estate Planning

• What?
• Why?
• How?
• Insurance Concepts

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Definition

• Estate planning consists of using legitimate
  government sanctioned tax-planning strategies to
  ensure that you and your survivors do not pay out
  more than is legally required.

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• Introduction
• In the broadest sense, estate planning
  consists of
• Deciding who you would like to have
• your property and possessions after
• your death.
• Defining and taking care of
• your responsibilities.
• Determining the most effective way
• to carry out your wishes.

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Things to consider.

• wills
• powers of attorney
• family trusts
• charitable gifting programs (view our power point
  presentation)
• estate freezes (view our power point
  presentation)
• buy-sell agreements (view our power point
  presentation)
• living wills
• funeral/memorial plans

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Why bother?

• Those who die without having first put their
  financial house in order often leave behind a
• complicated, time consuming
• and expensive task that has to
• be completed by their surviving
• family and friends hardly a
• pleasant experience for those
• already in mourning.
• Those who die without an estate plan have
  also relinquished their right to make decisions.
  Failing to plan ahead means that the fate of
  their money and their family is now in the hands
  of other people.

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Provincial intestacy chart

In Manitoba if the issue, is that of the
deceased but not the surviving spouse, then the
share of the surviving spouse is as follows
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• NotesA preferential spousal share is generally
  an amount determined by statute to which the
  intestate's spouse is entitled (to the extent
  possible) in preference to all other
  beneficiaries
• In all provinces and territories except
  Quebec if there is a surviving spouse with no
  surviving children, the spouse receives all of
  the intestate deceased's estate in Quebec, if
  relatives exist 1/3 to spouse, 1/3 to parents,
  1/3 to brothers or sisters (nieces or nephews)
  if no parents ½ to spouse, ½ to relatives if
  no relatives ½ to spouse, ½ to parents

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• In most provinces and territories, if a
  person is survived by his or her child or
  children or in the situation where the child or
  children are deceased but have living issue at
  the time of the death of the testator, the estate
  will go the child or children equally and the
  share of the deceased child shall be divided
  amongst that child's heirs (under the appropriate
  intestacy rules found in provincial statute).
• As of January 2002 subject to change
  where amendments to provincial legislation and
  regulations occurs

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An estate planning team

• No one advisor can complete every task associated
  with
• estate planning. Its a job that calls for the
  contributions of
• several different professionals, namely
• The Accountant, who can offer advice about
  possible tax
• consequences.
• The Financial Advisor, who can recommend products
  and
• strategies.
• The Lawyer, who can draft the will and provide
  other legal
• advice.

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Stages of life

• Many people believe that estate planning is
  something only to be
• considered in ones old age, after having amassed
  a small fortune.
• In fact, estate planning is virtually for
  everyone. Indeed, those
• with less money should take a particular interest
  in making sure the
• funds they do have go as far as possible.
• Young couples, single professionals, as well as
  seniors should all
• consider how to minimize costs while providing
  the maximum
• amount of money to their chosen heirs.

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Wills

• The will is the roadmap of the estate planning
  highway, outlining in detail where your property
  should go after your death.
• Those who die without this
• document lose all say in the
• matter the assets in their
• estate will be divided up
• according to a formula in
• their provinces legislation.

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Legal expertise

• While it is possible to write your own Will by
  hand (known as a holograph will), it is
  preferable
• to use the services of a lawyer,
• who is an expert in the field and
• able to avoid any ambiguity in the
• phrasing of this important
• document.
• Besides keeping your original Will in a safe
  place, where it
• cannot be lost or destroyed, your lawyer will
  also have the document entered in the Register of
  Wills, making it easy to locate after your death.

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Wills How to keep costs down

• Before meeting with a lawyer, you should consider
  the
• following
•  1. Beneficiaries - that is, who do I want to get
  my possessions after I die. Make a list of what
  you own. Obviously if you are a homeowner that
  will be first on the list, but also have a list
  of investments, RRSPs, business interests, as
  well as other property such as a cottage, family
  heirlooms and jewelry. Take along the documents
  for each of these if you have them. With
  something like your home, the lawyer will need to
  check as to the type of joint ownership. With
  appraised jewelry, for example, the appraisers
  description can assist in the description used in
  the will.

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• 2. Executor - who do I want to be in charge of
  my estate. Who do I trust to do what I want
  done. The key word here is trust, not
  friendship. Trust both in integrity and
  judgement. You want someone who understands what
  you want done and how you would want it done.
•  3. Guardian - who do I want to raise my
  children (be sure and run this by them first!)
•  4. Back-ups - who do I want to be second choice
  for beneficiary, trustee or guardian if the first
  choice is unable or unwilling to act?

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Define your obligations and responsibilities..

• Obligations
• Mortgages and other debts such as loans and
  credit cards
• Final taxes
• Costs of settling the estate, such as probate
  fees and legal fees
• Responsibilities
• Income for spouse and dependant children
• Funds to support dependant relatives such as
  elderly parents
• Lifelong support for disabled children

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Probate

• Probate is act of officially proving the
  authenticity and validity of a Will in the
  Courts. Not only does probate slow down the
  settlement of the succession, it also results in
  additional legal fees.
• A Will drawn up by a lawyer is not subject to
  probate because the law recognizes lawyers as
  public officers, and allows them to confer
  authenticity on their Wills.
• It is also possible to avoid probate through
  the use of products like life insurance and
  segregated funds.

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Next steps..

• Prepare a Will
• Select an executor
• Establish a power of attorney

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Enduring Power of Attorney

• It is important to note that the Power of
  Attorney document (general, limited or financial)
  will not be valid if you become mentally
  incapacitated unless it specifically states that
  the attorney's authority is to be maintained
  under this circumstance.
• Additional wording is necessary to ensure the
  document is considered enduring in subsequent
  mental incapacity. This is commonly referred to
  as an "enduring Power of Attorney".

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Living Wills

• The purpose of a living Will is to provide
  instructions regarding your medical care if you
  were to become incapacitated and unable to state
  your wishes. This document may indicate the type
  of treatment you may or may not wish to receive.
  A living Will should be created with the
  assistance of a lawyer or notary and discussed
  with your family physician and family members.

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Trusts

• Trusts are a way for an individual to transfer
  assets to other
• people while still retaining some control. There
  are two basic
• kinds of trusts
• Inter-vivos trusts, which are created during
  ones lifetime (the name is Latin, meaning
  between the living)
• Testamentary trusts, which are created in the
  will at the time of death.
• Depending on the situation, one or both of these
  trusts may be required as part of the estate
  planning process to for example, reduce taxes,
  pay for the education of children, or to provide
  ongoing support for a disabled relative.

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Beneficiary designations

• Besides making provisions for heirs in the Will,
  its also
• possible to name beneficiaries directly on
  insurance
• polices, company pension plans and segregated
  funds.
• Under certain conditions, beneficiary
  designations can allow
• assets to pass directly to the person named
  without having to
• become part of the estate or go through the
  probate process.
• If you havent named a beneficiary, the money
  will flow
• through to your estate by default.
• It is not possible to name a beneficiary on a
  mutual fund account (depending of the
• provinces legislation). But because of their
  special insurance status, it is possible to
• appoint a beneficiary on segregated fund
  accounts.

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Irrevocable and revocable

• In Quebec, if you name your legal spouse as
  beneficiary, that
• designation is deemed to be irrevocable unless
  otherwise
• specified that means you will not be able to
  change it later
• on without his or her approval in writing.
• Revocable designations, on the other hand, can be
  changed
• unilaterally in the future and allow for greater
  flexibility.

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Charitable donations

• In many cases, leaving money to a charity is a
  win-win
• propositiona worthy organization receives
  funding, while
• your estate obtains a credit that can be applied
  against taxes
• owning elsewhere.
• Recent changes to tax legislation have also made
  it possible to
• name a charity as beneficiary on a life insurance
  policy. If you
• have insurance you no longer require for personal
  or
• business reasons, you can name your favourite
  charity as
• beneficiary and your estate will receive a credit
  for the face
• amount of the policy at the time of your death.
• View our power point on
  Charitable Giving

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Estate Planning
Next steps
Has this discussion raised any questions or
concerns that youd like to discuss in greater
detail?
Please feel free to contact us. Emailinfo_at_insuran
ceconcepts.ca
Thank You