6 simple answers to make estate planning easy

Start now to safeguard your lasting legacy.

You’ve heard the classic saying, “Death and taxes…” Nobody likes to discuss either, but these are two certainties in life. What’s also true is that the more we plan for both, the better off we are.

We accumulate personal possessions, financial assets and even real estate over the course of our lives. Whether we’ve built up a lot or a little, there is one thing we all have in common — you can’t take it with you when you pass away.

Here are the some frequently asked questions and answers to help plan for the future.

1. What exactly is estate planning?

Estate planning is simply coming to terms with one simple truth — mortality — and preparing accordingly by naming the people who’ll receive your belongings after you pass on.

Everyone needs to make this plan, and you shouldn’t wait for retirement to open the discussion. A common misconception is that estate planning is only a beneficial strategy for the wealthy. However, the truth is that families with even modest assets can see a benefit, as anyone can lose assets or fail to reduce financial concerns due to lack of planning.

We can’t predict when a tragedy will occur, so an estate plan becomes very important for loved ones. Start now, as there’s no need to wait and there are efficiencies to be gained. By taking this proactive step, you’ll be in control of how distributions are made and how your estate will most efficiently deal with that last tax bill.

2. What items should I consider?

This is a huge step where a professional advisor can identify your vision to ensure your assets go to those you care for. Your advisor can assist you along the way, and help you execute this vision

Some common estate planning considerations include:

  • Naming a guardian for your minor children: Don’t forget to select someone to be the trustee of their inheritance as well.
  • Naming beneficiaries of your assets: You have physical assets and valuables to inventory, but there are financial assets to consider as well. For example, your beneficiaries will have financial responsibilities and you may have to consider extra arrangements for future financial protection for them. They may not be prudent with finances, or they may require extra attention due to trouble with creditors or life’s circumstances and changes, such as divorce.
  • Real estate: Do you wish to pass a home, piece of property or cottage on through your estate, for instance?
  • Your business: Are you self-employed? Who will take over your business if you’d like it to continue to operate?

3. Will there be any additional expenses?

When considering your legacy, it’s important to identify opportunities to keep as much of your assets in the hands of your family. This helps avoid erosion of assets due to taxation or the cost of probate. In some instances, these costs are unavoidable, but your planning puts you in control.

If you can identify the future cost of taxation to your estate, you can decide on the extent to which you’d like to offset that cost to your family with the addition of insurance protection.

There are steps that can be taken at this stage, such as the implementation of insurance strategies. You can also properly aligning beneficiary designations, which can make a significant impact on estate cost reductions.

4. When do I involve my lawyer?

Once you have a clear plan, you can formalize this with the assistance of your attorney.

It’s recommended that you seek legal assistance to draft your will. If you do not get to this final step, you run the risk of passing away “intestate” — that is, passing away with no clear directive of how to distribute your estate assets.

Those that pass intestate can subject their beneficiaries to a longer and more expensive process where the estate assets are distributed according to the court’s standard template of asset distribution.

5. What decisions can I make now, so my family won’t have to later?

Do you know if you’d prefer to be cremated or buried? Do you know where you’d like your final resting place to be? If you do, that’s great — but do your beneficiaries know?

Another estate consideration that often gets left to the ones you leave behind is making funeral arrangements. Often, those loved ones must make these decisions during a very difficult time.

As is the case with most things, the sooner you plan your funeral, the more cost-effective it will be. So it’s best to make all the necessary arrangements beforehand.

6. When do I need to start planning?

Start this year. If you are a young family or a single adult, you can start with a simple will and some term life insurance. As you continue to accumulate more or over time, you can expand your planning.

If you have reached retirement already and still do not have a will, don’t wait any longer. Wills can be changed — so don’t procrastinate if you’re unsure of how to proceed.

Get in touch with your financial advisor to ensure your financial planning discussions have taken your estate planning needs into consideration. Then talk to your lawyer who can help get your will started. You’ll have peace of mind knowing that your wishes will be properly executed.

This is one of the most thoughtful things you can do for those you love, and it will be a burden lifted in a time of grief and stress.

Credential Financial Strategies Inc. offers financial planning, life insurance and investments to members of credit union and their communities. This article is provided as a general source of information and should not be considered personal advice. Please speak to your personal financial representative before making any financial planning decision or implementing any strategy.

About Ryan Fontaine

Ryan Fontaine is the Senior Investment Advisor Credential Securities/Credential Financial Strategies Inc./ Credential Asset Management Inc. Ryan has over 20 years’ experience in the financial services industry as a Financial Advisor. Specializing in the development of customized income planning strategies that help ACU members maintain their lifestyle into their retirement years. Credential Financial Strategies Inc. offers financial planning, life insurance and investments to members of credit unions and their communities. Mutual funds, other securities and securities related financial planning services are offered through Credential Securities, a division of Credential Qtrade Securities Inc. Credential Securities is a registered mark owned by Aviso Wealth Inc.

View all posts ›

Up Next

4 ways to save on everyday purchases while socially distancing

5 ways to save on everyday purchases

The cost of living is rising across Canada, partially fuelled by pandemic-related inflation. As we move further away from the pandemic, prices are finally slowing down. It never hurts to…

Read more ›
Karen DiQuinzio

ACU Employee Spotlight: Getting to know Karen Di Quinzio, Director of Wealth

With over 25 years of industry experience, Karen Di Quinzio is the Director of Wealth Management at ACU. Her role includes leadership, strategy, coaching and training, hiring, compliance and registrations,…

Read more ›
TFSA Basics: How does a TFSA work

Finance basics: How does a TFSA work?

Ever since its introduction in 2009, the Tax-Free Savings Account (TFSA) has been a hit with Canadians. Yet, despite its widespread popularity, there still seems to be some confusion about…

Read more ›