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What is Estate Planning?
Other Resources Financial Planning Tool Financial Fitness Visit our contact page and submit your question through the "Who can help me?" link or call one of our financial experts at any of our three branches.
Estate planning can help you answer these and many other questions. It is much more than a will. It helps people evaluate their personal and financial situation so they can make informed decisions and develop strategies to protect and support their heirs, minimize estate administration costs and taxes, fairly distribute assets and make critical personal decisions.
You have put years of work into accumulating your estate, including your home, cash, investments, personal property, income, life insurance proceeds, etc. The secret truth is: without a proper will and planning it is not yours to give away when you die. CCRA and the provincial government are waiting to divide it up. Benjamin Franklin put it best when he said - "In this world nothing can be said to be certain, except death and taxes.” It is up to you to protect your estate from taxation. The amount of tax you pay varies depending on your tax bracket, the amount of income you earn and the amount of taxable capital gains you possess. You can be taxed up to 50% depending on your circumstances. Most people know that when the first spouse dies the assets are transferable, free of tax to the other partner. When the second spouse passes away, CCRA will deem all assets are sold on the date of death and tax will be paid on the growth of these taxable assets except the family home. Any RRIF or RSP balance will also be taxable to the estate. Estate planning can save you tax money along the way and at death. It can also mean the difference between being able to dictate how your estate will be administered. The ability to name personal beneficiaries will not only allow your money to be passed on tax free to your loved ones, it will also avoid probate and legal fees associated with the execution of a will. An estate plan can also protect your heirs from going through a lengthy estate settlement, ensure responsible guardians for children and dependents and maximize the value of your assets.
Although almost everyone will need one, it is of primary concern to those ages 55 and older or people with children, a business or a large estate.
Creating an estate plan isn’t easy and usually requires the expertise of more than one person. You should meet with an estate or financial planner, a chartered accountant and a lawyer. They should work together to create a plan that saves you money and your loves ones from future financial headaches.
What are the basic steps in Estate Planning? Since everyone’s financial situation is different, there isn’t one plan that is suitable for any one person. For example, an older couple in retirement without dependent children will have a different set of objectives than a couple with children or a single person. Here are some of the basic steps in Estate Planning:
Although estate planning is complex, time consuming and can be expensive, in the end you will be glad you did it. You will have the peace of mind knowing everything you worked hard to earn will go into the hands of the people you love.
What is Estate Administration? When the time comes you will need a responsible executor/estate representative to carry out your wishes in your will. He or she will be responsible for everything from arranging the funeral to distributing the assets to heirs. The executor will also identify your assets, settle debts and pay taxes.
Why should I be concerned about Estate Administration? It is important that you understand the estate administration process and the role of the estate representative when you are preparing your Will. When you name an estate representative, you are granting that individual full legal authority to deal with all aspects of the administration of your estate. Factors to consider Estate administration can be complicated and requires expertise. The estate representative must have the time and knowledge to:
Credential Financial Strategies Inc. is a member company under Credential Financial Inc., offering financial planning, life insurance and investments to members of credit unions and their communities. ®Credential is a registered mark owned by Credential Financial Inc. and is used under licence.
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