It is important for you to retain and protect your assets, and leave a lasting legacy for your family. People sometimes think that estate planning has everything to do with the wealthy. This misunderstanding can lead to unnecessary legal complications for survivors. Everyone can benefit from estate planning, whether rich or middle class, young or old. From reducing expenses and taxes of an estate to streamlining the transition of assets to beneficiaries, estate planning ensures that your loved ones are financially protected.
Whatever assets you leave at the time of your passing should be preserved and transferred to whoever you wish. Modern estate planning covers more than just a will. Power of attorney, representation agreements and wills are three key parts to estate planning. Your estate plan must be prepared with the assistance of legal and financial experts.
Creating an estate plan
When most Canadians talk about the term estate planning, they typically think of their Will. A valid will, undoubtedly, is a key component to any estate plan; however, there are other elements that must be considered in order to address all the important areas. The following are some major steps that will help you create a sound plan:
- Define your estate planning objectives
- Define your objectives based on your current financial situation
- Define actions necessary to achieve your objectives
- Define your assets and liabilities
- Consult a financial advisor
- Periodically update your documents
It is a complicated process to determine a deceased individual’s liabilities and assets. Assets can be scattered among safety deposit boxes, bank accounts, etc. Therefore, it is recommended to document a summary of all of your assets and liabilities that you or your spouse own. The summary should also include the ownership structure of assets and beneficiary designations. This information plays a critical role in implementing tax-saving and will-planning strategies.
Key components
It is not humanly possible to predict the future with absolute certainty. But with comprehensive planning, you can gain peace of mind knowing that all of your financial matters are arranged for your family and loved ones. Key components of an estate plan include the following:
1. Will
A will is a document, a last communication with the family and friends and also an opportunity to clearly define how your assets should be handled. If someone dies without leaving an updated will, courts then decide the future of one’s assets. You certainly don’t want the court to distribute your wealth against your wishes. Moreover, having a will is also crucial to avoid delays and potential squabbling among family members.
2. Power of attorney
The power of attorney is a legal document which gives power to someone to manage your financial affairs when you are unable to do so. This power can be given to someone on your behalf either temporarily or permanently during your illness or inability to make important decisions.
A representation agreement is also a component of an estate plan. It authorizes one or more individuals to help you represent your financial matters or even make decisions on your behalf.
Get started with your estate planning
It’s never too late or too early to start thinking about estate planning. Kewcorp Financial is a team of financial experts who provide specialized estate planning services to individuals and business owners in Canada. Feel free to discuss your estate planning needs with us. Give us a call today!
