estate planning parksville

Spring Clean your Estate Plan

As human beings one of our favourite subjects to talk about is estate planning, said no one ever. We tend to avoid this subject like the plague, when we intuitively know that the chances of us dying is approximately 100%.

Estate planning is actually not that complicated and when an effective plan is put in place, one feels a tremendous sense of relief! So what are the components of a well-structured estate plan?

Correct asset structure

A couple should always make sure that all non-registered investments are held in joint name. This will avoid any probate fees and transfer of ownership to the surviving spouse will be timely. The transfer will be seamless as the deceased’s name is simply removed off the account or asset. By the way, the same applies to real estate and vehicles. So make sure your home, additional properties, cars and RV’s are all in joint name.

Legal documents

Make sure you have a Will, Enduring Power of Attorney and a Representation Agreement. These important legal documents serve different purposes. The Will distributes your estate as per your wishes. Make sure your will is up to date with current legislation and that it was drawn up in the province of BC. An Enduring Power of Attorney allows your Power of Attorney (normally your spouse) to act on your behalf if you become mentally incompetent. A Representation Agreement allows your Representative to make decisions with regards to your medical treatment.

Taxation of your estate

This is especially important when only a single spouse remains alive as all the assets are now owned by this one individual. A good idea is to review the value of all your assets and to simulate what the tax bill might be. If you don’t mind your estate paying the tax bill then there is no need for any insurance. However, if you wish to leave your heirs the full value of your estate then the most efficient way to pay this tax bill is to put a life insurance policy in place that will pay this bill.

Gifting

If you have non-registered cash that you wish to leave to your kids consider giving them some of it while you are still alive. There are two benefits to this strategy that satisfies both sides of your brain. The emotional side of your brain, on the right, will be satisfied as you get to see your kids enjoy the money while you are alive. The analytical side of your brain, on the left, will be satisfied as you now get to reduce your estate costs by lowering your probate fees due to having a smaller estate.

An estate plan is neither complicated or difficult to be put in place, it is one of those things we know we should do but never seem to get around to doing it. To quote Wayne Gretzky:

“Procrastination is one of the most common and deadliest of diseases, its toll on success and happiness is heavy.”

Stop procrastinating and start planning.