Estate Planning

Estate planning is the process by which an individual plans to pass on his or her wealth, including investments and life insurance, upon death to a chosen person(s), with the goal of:

• Preserving and/or enhancing the value of the estate to the extent possible
• Ensuring delivery of the intended amounts to the appropriate persons; and
• Minimizing taxes, where possible
  

It is usually recommended that you start the process by taking an inventory of your assets so that you have a clear picture of what may be in your estate.  You should also work with a financial advisor so that they can help you project what the after-tax value of your estate may be.

If you don’t have a will when you pass away, you are considered to have died “intestate”, and your assets will end up being distributed according to the “intestacy” rules of your province, which may or may not be consistent with your wishes.                                             

For example, in some provinces a common-law partner will inherit in the same manner as a married spouse, while in other provinces they will receive nothing upon an intestacy.  

Some people might choose to protect their estate by purchasing a permanent life insurance policy to help offset the cost of income taxes on their estate after they pass away. Others might transfer their assets tax-free to their spouse/partner

While those are just a few examples, there are strategies that can help you reduce or avoid the tax burden on your estate after you pass away, and an Investors Group Consultant can help you figure out which ones makes sense for your situation.

Your estate plan should always be reviewed after any major life event – such as a birth, death, or divorce – to ensure it reflects your new reality, and then make adjustments to it as necessary.

If you don't have a customized estate plan that aligns with your whole financial picture, your assets may be distributed in a manner you didn't anticipate. 

Your estate plan will encompass more than just your will – it could include a review of your beneficiary designations, joint ownership arrangements and powers of attorney.  

You can nominate someone to act as guardian for your children by specifying your preference in your will, although your choice of guardian must be approved by a court (in the event you were to pass away).

To assist your loved ones in the event you pass away, you should include these items in your list of personal records:

• People to contact (e.g. next of kin, executor, employer, lawyer, etc.)
• Estate documents (e.g. financial decisions, funeral arrangements, will, organ donation, etc.)
• Your personal details (e.g. personal data, digital assets like online accounts, citizenship papers, marriage/divorce certificates, club/association memberships, military service, etc.)
• Financial Commitments (e.g. rent/mortgage payments, outstanding loans and lines of credit, credit cards etc.)
• Insurance (e.g. life, disability, critical illness, hospital, etc.)
• Investments (e.g. mutual funds, annuities, GICs, etc.)
• Residence and real estate (e.g. where they are located, who owns the title, etc.)

You can also download a PDF copy of our Personal Records Organizer and print it off to help organize information about your personal and financial affairs. It will be extremely valuable to your family and estate administrators in the event you were to pass away.