ESTATE PLANNING

Estate planning ensures that if you are physically or mentally incapacitated, your affairs will be managed in a manner that you have prescribed and upon your death, your estate will be distributed according to your instructions.

OBJECTIVES OF ESTATE PLANNING

The four fundamental objectives of Estate Planning are to ensure that:

  1. Your estate is managed according to your wishes if a disability renders you incapable of doing so yourself
  2. Appropriate insurance plans protect your dependents, meet their liquidity needs, and, in case you are disabled, provide ongoing income
  3. Your assets are distributed to the appropriate beneficiaries at the time of your death
  4. Tax and administration costs are minimized

THE ESTATE PLANNING PROCESS

Estate Planning involves the following important steps:

  • Identify all of your assets and potential liabilities
  • Identify family members, friends, or other individuals who would be capable and willing to play a role in looking after your affairs
  • Confirm your beneficiaries and indicate which of your assets you would like each to receive
  • Review the potential tax consequences of each alternative available to you
  • Consider costs and ease of administration when assessing your alternatives

THE TOOLS OF ESTATE PLANNING

The following legal instruments and products are available to assist in your Estate Planning:

POWER OF ATTORNEY

The authority you grant your “attorney” or representative can be either limited to specific activities or wide ranging general affairs. It can be temporary or of an indefinite duration, but in all cases, it ends upon your death or incapacity.

Because the Power of Attorney will not be valid if you become mentally incapacitated, you must have a document that specifically states it be maintained under this circumstance.

ENDURING POWER OF ATTORNEY

Allows you to arrange for the care of your financial affairs should you become mentally incapacitated.

MEDICAL DIRECTIVE

Also referred to as a Living Will, Representative Agreement, or Power of Attorney for Personal Care. This provides instructions regarding your medical care if you are unable to state your wishes. It should be created with the assistance of a lawyer (or notary) and discussed with your family and physician.

WILL

Indicates in writing, how you wish your assets to be distributed after your death. If you die without a valid will, the Province dictates the distribution of your assets. The results likely will not be what you would have wanted.

JOINTURES (JOINT OWNERSHIP WITH RIGHT OF SURVIVORSHIP)

Applies to many types of assets.
Allows assets to go automatically to your survivor(s) when you die.
Can be an effective way to reduce costs and avoid challenges under the Wills and Succession Act.

TRUSTS
Can be used for a variety of purposes including private gifts, protection of assets from creditors, or maintaining control over your assets for years after your death.

INSURANCE
The following are some of a wide variety of products that can protect you from risk:

Disability insurance — provides replacement income if you become disabled and are unable to work.
Life insurance — provides a lump sum of tax-free capital to cover liabilities, replace your income for dependents, or fund specific gifts to individuals, charities, or others.
Property/casualty insurance — covers a wide range of risks such as theft or fire, as well as exposure to liability.
Long-term care insurance — provides an income to cover long-term care costs incurred either at home or in an institution.
Critical illness insurance — provides a lump-sum payment if you contract cancer, heart disease, or other major illness defined in your policy.
Travel insurance — offsets potentially prohibitive medical costs that might be required when travelling in destinations that are not covered by your provincial medical insurance.

REGISTERED DISABILITY SAVINGS PLAN (RDSP)

For parents of children who are eligible for the disability tax credit, particular attention must be paid to Trusts, insurance, and the use of RDSPs. They are tax-preferred investment vehicles that can receive federal government contributions to enhance their effectiveness.

 

THE ROLE OF YOUR BLACKBURN DAVIS FINANCIAL ADVISOR

  • Identify your Estate Planning needs
  • Assess your current financial situation, existing documents relative to your estate, and insurance products
  • Work with you to develop a strategy and plan to meet your Estate Planning needs
  • Coordinate the services of your lawyer and accountant and work with them to ensure your plan is implemented
  • If you do not already have a lawyer and accountant, we will recommend ones who we know are knowledgeable and experienced in Estate Planning services.

 

PLAN. COORDINATE. COMMUNICATE.