What is involved in estate planning?
Estate planning is an important area of financial planning and yet it is the most neglected and taken for granted as a last priority. Estate is the sum of assets and liabilities of an individual. An estate plan ensures your wishes are carried out and you can care for your loved ones even after you are gone. There are several areas to consider when making your plan.
- Record your personal assets. Make a list of what you own and where it can be found, your property, investments, shares of stocks, mutual funds, bank accounts, insurance policies, pension plans, vehicles, jewelry, personal items of value, include business ownership, partnership and shares in an enterprise if any.
- List your liabilities, such as mortgages, loans, credit card balances, owing to friends and relatives if any.
- Choose an agent or a trusted person to know the location of your important documents such as your lists of liabilities and records of assets.
Plan for incapacity,
Though many studies are showing that Canadians are living longer, some reports have shown that 60% of Canadian seniors rely on five or more medications to treat 2 or more chronic conditions. It was also reported that the big threat to the quality of life and health in aging is loss of cognitive abilities leading to dementia, including Alzheimer’s disease. As of date there are no known drugs to control the situation and more and more seniors are afflicted by it. Though experts are advocating prevention, there are no foolproof ways to avoid the disease.
1. Prepare a personal directive.
A personal directive is a simple written document that allows you to designate an agent to make decisions on your behalf concerning your health, maintenance and care, in the event you are incapable of doing so. In most cases, Personal Directives can be prepared with out the help of a lawyer
2. Prepare an enduring Power of Attorney;
A Power of Attorney allows you to appoint an agent to look after your financial, business and legal matters. A power of attorney will only be in effect while you are alive and ends in the event of your death. There are instances that a lawyer is required in the preparation of a power of attorney as there are also situations where it is not necessary.
3. Prepare a Will.
Your Will details how your estate and possessions will be handled after your demise. Your Will allows you to appoint an Executor or Executors of your estate and effect your wishes for the care and well being of your love ones. In Alberta, like the Power of Attorney, wills can be prepared with or without the services of a lawyer, One must seek professional help if not very familiar with the laws in effect.
4. Pre-plan Funeral and Cemetery arrangements.
Take responsibility of your end of life celebrations, it is an important event that can not be left to guess work. You have spent your life planning most of the things you do, why not plan the most important segment of your journey, the finish line.
5. Gift assets during your lifetime.
If you give your beneficiaries some assets while you are still alive, you can watch them enjoy your gift.
6. Establish living Trusts,
For the special circumstances in your life you can establish trusts to care for those needs
7. Minimize Taxes and Fees,
With proper planning there are various ways to reduce taxes, probate and estate fees. Depending on your circumstances, a tax adviser should be able to arrange things for you so you could leave more assets to your loved ones.
8. Review Life Insurance;
Life insurance provides money to help your loved ones maintain their lifestyle and help protect your legacy.
For further information and assistance in preparing your Estate Plan and Documents, contact; Ben Calica; 403 542 1297 or Toll Free; 1 866 840 2781