AWESOME Tips from Estate Planning Stars! Read this to Save Money & Frustration

As I mentioned above a will is the first step in estate planning. The good news is you don’t need a fancy lawyer. You can draft your will online. Here are a few words from Tracy Laranjo of Willful, an online estate planning platform,  to help you navigate this process!

“Dying intestate (without a will) is an incredibly burdensome experience for your loved ones. Without documenting your wishes in a Final Will and Testament, they are left to make very difficult decisions.

These include what you would have wanted to be done with your body, your funeral preferences, who you would have wanted to care for pets or children, and how you would want your assets distributed.

Without assigning an executor in your will, someone must apply to become your administrator. Your administrator can’t begin to act on your behalf until the court gives permission – which can take a while.

Having a will allows for someone to begin acting on your behalf immediately after you die.

Drafting your will isn’t the end of the road my friends. Here are some words of wisdom from Robb Engen of Boomer & Echo!

“The foundation of a good estate plan starts with ensuring your will is up-to-date.

You’ll want to specify who will handle your affairs and give them direction through a power of attorney and medical directive.

You’ll also want to revisit the beneficiary designations on your investment accounts to ensure these designations don’t conflict with your will.

Keeping them up-to-date is the easiest way to ensure a smooth transition of those assets.

One difference between today and a generation ago is the introduction of the TFSA – a great tool for retirees to save and also incorporate into your estate plan.

Death doesn’t release your estate from debt. Don’t forget to take your tax obligations into consideration. 

“The biggest mistake in estate planning is not taking into account the taxes payable on death.

There is a deemed disposition of capital assets when an individual dies which gives rise to a large tax owing in the estate. Bequests often do not take into account the net after-tax value of the estate.”

David J Rotfleisch is a Certified Specialist in Taxation and the founder of the boutique Canadian income tax law firm Rotfleisch and Samulovitch PC.

He appears regularly in the media including print, television and radio. His website has extensive in-depth tax articles. If you want more information click below.

Everyone dreams of having a cottage – but you don’t want it to become a burden on those you love when you die.

Check out what Mark Halpern, CEO & Founder of WEALTHinsurance.com has to say about this:

“When you and your spouse die, the tax department (Canada Revenue Agency or “CRA”) considers it as if you sold the cottage at the current market value and the difference between your original cost and its current value (called ‘capital gains’) gets taxed.

The tax rate on capital gains is approximately 27% in Ontario so you will owe approximately $100,000 of taxes on the cottage bought for $100,000 and now worth $500,000.

If your estate has too little cash to pay your final tax bill, your heirs may be forced to sell the cottage and liquidate other assets just to pay the taxes due when your final tax return is filed.”

Families are complicated – which means that estate planning is fraught potential pitfalls. Jim Yih the founder of RetireHappy.ca has some ideas to avoid these sort of issues:

“My best advice is to be careful.  A lot of people simply choose a family member like a spouse or child without really thinking it through.  Do you have kids or family members that don’t get along?  Will it create problems choosing one over another?  Is it beneficial or problematic to list more than 1 executor?  Will they have time?  Do they have the mental and financial capability to deal with an estate?

The other tip is to help your executor by communicating with them and helping them with the necessary information on where to find the required doucments when you pass away.  The job of an executor is a very difficult one because there is often so much unknown and the person with all the answers is not there to help. 

Make sure the executor knows where your will is kept.  Keep your will and all-important financial documents in a safe and fireproof location and make sure the executor knows where you keep important financial papers.”

At the end of the day, estate planning must include details of how you want your final hurrah to play out. Some people want an elaborate burial and funeral, while others simply want a cremation.

The difference is HUGE when it comes to finances and planning. 

Robin Sutton of BasicFunerals.ca has some great advice:

“The most valuable thing you can do for our loved ones is to express and hopefully record your wishes ahead of time. This can seem like a daunting task, but having the forethought to make final plans in advance can save your family from added emotional distress at what is likely to be a very difficult time.”

If you decide to move ahead and pre-pay a funeral provider, ask questions. Be sure to know what is included in the pre-payment, what costs may arise at the time of need and how funds will be invested. Seek the help of a transparent and knowledgeable funeral professional.

At the end of the day not planning a funeral may cost your loved ones a lot.” 

If you want Robin’s advice click here.

Unfortunately a LOT of people wait until later in life to do their estate planning. This ultimately means they have less time to save cash for their final wishes.

At Policy Architects we deal with a lot of elderly clients that are looking to get something set up quickly and affordably…

…and I am here to say that it’s not too late! 

There are some incredible products out there that enable people on limited budgets with health conditions to take out small permanent policies that don’t break the bank. 

The cost of a funeral in Canada today can range from as low as $2,000 up to $20,000. So, If you need 5k – 25k of coverage there are plenty of choices for you.

Health issues are expected and won’t put you out of the running. Even if you’ve had a brush with cancer there are carriers that will provide coverage.

Many of our clients are pleasantly surprised that even with their health issues, they qualify for the most affordable, Tier 1, coverage.