|Will & Estate Planning|
Answering all the above questions before you die is the purpose of estate planning and a well drafted will should address some of the above key questions. No matter what your age, if you have dependents, or have accumulated any assets, you should start putting some estate planning strategies to work.
By planning your estate today, you'll have as much say as possible on what happens to your family and your financial assets when you die. A will is more than a way of showing how responsible, thoughtful and generous you are — or, at least, were.
If financial planning is the way you build assets, estate planning is ensuring those assets are managed in a way that serves you and your family best, both now and after you die. Estate planning is not the preserve of the old and the wealthy. While you may not think your assets amount to much, even a mortgaged home can become a substantial asset if the loan is life insured.
How to Start
You will need sound tax advice to ensure as little of your hard–earned money as possible goes to Revenue Canada and provincial probate fees. But don’t get too caught up in tax–saving strategies in case you lose sight of your main objective: To make sure your family and loved ones are cared for now and when you die, whenever that may be. The consequences of failing to plan properly are more serious than you might think.
Everyone over 18 with assets of any kind should have a will. Yet a recent survey commissioned by the Trust Companies Association of Canada shows that half of Canadian adults do not.
The Consequences of Dying Without a Will
The Impact on Your Children
A will is the only place where you can elect who you would like to be the guardian of your children. Without a will, the courts will decide who raises them.
In addition, depending on where you live, your common–law spouse may not be entitled to a share of your estate.
Dying without a will can also seriously affect the value of your estate. For example, your estate may have to pay income taxes that could have been avoided. Further, taxes due as a result of your death may force the sale of the family cottage — or even the family business.
Your beneficiaries may also suffer from the inevitable delays in settling your affairs. It may result in family strife, and costly legal challenges or other fees that might have been avoided. There will be no gifts to a friend or favourite charity because they’re not included in the government formula. There will also be no trusts to provide for special needs.
In short, the distribution of your assets may not reflect what your beneficiaries need or what you would have wanted.
If these warnings sound ominous, they are. The message is loud and clear — a will is one of the cornerstones of financial planning. If you have a family, or have accumulated any assets, have one prepared — and soon.
If you have a spouse only, your estate will go to her or him. If you have children but no spouse, your estate will pass to your children. If you have neither spouse nor children, your estate will go to your next of kin — parents, brothers and sisters or nieces and nephews.
MoneyWI$E Financial Inc. can advice you to reduce taxes by showing you how to legitimately transfer assets to a living trust. You may also want to pass your family business on to your children so future capital gains will be taxed in their hands or you may want to set up a spousal trust, a financial power of attorney etc.
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