Estate planning strategies - protecting your legacy

Dick Young
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Dick Young

When your time comes - and may it be many years from now - you will want your legacy to be passed on exactly as you wish. You will want to ensure your family is protected and the least possible taxes are levied against your estate. That's why estate planning is so important and why you should do it now using strategies like these.

• A Will is the foundation of any estate plan. It designates how your estate should be distributed. If you die without a will (i.e. intestate), provincial legislation will determine how your estate is distributed amongst your heirs.

• A Living Will provides direction for your care in the event of catastrophic illness or disability.

• An Enduring Power of Attorney (also called a Mandate in case of Incapacity in Québec) provides direction for how your property will be managed in the event of incapacity.

• An Executor (sometimes called a Personal Representative or in Québec, a liquidator) is the person named in your will to settle your estate according to your documented wishes.

• A Guardian should be named in your will to take care of your children while they are minors.

• Liquid Assets are important to pay for taxes, debts, the costs of settling your estate and/or other obligations. If you do not anticipate that your estate will have sufficient liquid assets, consideration should be given to purchasing insurance.

• Funeral Services can be prearranged to save your estate some money, avoid extra stress on your survivors, and ensure the service is according to your wishes.

• Financial Assets should be comprehensively listed in your records - and be sure your Executor and/or survivors know where to find them.

• Probate is the process by which your will is validated by a court with fees paid to your provincial government usually calculated on the net fair market value of the assets in your estate. Although reducing probate fees may be desirable, avoiding probate through the use of strategies such as beneficiary designations and joint ownership can lead to problems if some beneficiaries receive more of the estate than others.

These comments are based on the probate process outside of Québec, since the probate process is different in that province.

• A Trust specifies a trustee who will manage the assets so long as the assets are held by the trust. Although it is possible to set up a trust during your lifetime, most people set up trusts in their will. A trust set up in your will is known as a testamentary trust, and it can serve several purposes, including maintaining control over the assets until certain beneficiaries are mature enough to manage them, and providing certain tax and government support advantages to disabled beneficiaries.

Your personal estate planning strategies depend on your financial situation and the rules in your province. Your professional advisor and lawyer can help ensure your legacy is left as you wish while limiting probate costs and taxes.

This column, written and published by Investors Group Financial Services Inc. and Investors Group Securities Inc., presents general information only and is not a solicitation to buy or sell any investments. Contact your own adviser for specific advice about your circumstances.

Organizations: Funeral Services, Investors Group Financial Services, Investors Group Securities

Geographic location: Québec

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