The Importance of Estate Planning

Estate planning is all about protecting your loved ones by planning a smooth transfer of your assets to your heirs. It’s about giving you peace of mind knowing your heirs are protected and will receive the legacy you intended for them. 

WHAT is estate planning?

Estate planning is a formalized plan which specifies details regarding the management and transfer of your estate in the event of your incapacitation or death. The plan allows you to prepare and arrange the transfer of your assets, outlining bequests to your heirs and beneficiaries, as well as instructions regarding your last wishes. 

Your estate planning strategy may include:

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A clear understanding of your last wishes, so they are properly carried out.

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Instructions to ensure your assets are distributed according to your wishes.

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Steps to minimize and defer taxes and other costs.

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A plan to sell or pass on your ownership stake in a business.

WHY create an estate plan?

1. Manage your legacy

Decide how you would like your legacy distributed and ensure that your loved ones are provided for. This could include distribution of assets to your spouse and family members, supporting a meaningful charitable organization, or gifting your property or heirlooms to your heirs.

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2. Avoid or minimize family disagreements

Prepare for any potential family, legal, and financial considerations. A clearly articulated estate strategy can alleviate uncertainty and reduce conflict over asset distribution and other estate-related issues.

3. Ensure a smooth wealth transfer

Plan for a smooth and timely transfer of your assets to your heirs and beneficiaries. It offers peace of mind, giving your family members a better understanding of your intentions and time frames for transfers.

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4. Manage costs

Plan and proactively manage the taxes and other associated costs of settling your affairs and transferring your assets. It helps reduce the stress for your heirs later.

5. Planning for incapacity 

Planning for incapacity involves documenting your wishes and advance medical directives. In planning for potential incapacity, preparing powers of attorneys and a living will are essential.

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WHO needs estate planning?

Everyone can benefit from ensuring their assets and wishes are documented within a formalized plan. Your specific needs will be determined by your age, relationship, or family status, as well as your accumulated assets. 

Some essential documents are needed by everyone including younger adults, singles, or couples regardless of your financial situation, even if you have minimal assets.

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A will (parents with children should include a guardian 1 )
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Beneficiary designations
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Medical and financial powers of attorney
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Instructions and documentation to help control how your assets are taxed, managed, and distributed 2

HOW to get started

Life is unpredictable, and so the best protection is to be prepared by starting as early as you can. Here is a list of 6 steps to help you get started and track your progress.

1. Define your estate planning objectives.

• Allow time to think about what your goals and intentions are with a clear mind.

• Define and document your goals and priorities.

• Consider who will be assigned to the roles of POA and executor(s).

2. Choose your executor and POA wisely.

• Select individuals who have a vested interest and are trustworthy. 3

• Consider what expertise the person brings to the role, and what tasks may need to be delegated.

• Ideally, select someone that lives in your province; otherwise, an executor bond may be required. 4

3. Organize your documents.

• Up-to-date will and beneficiary designations on registered plans and insurance policies.

• Power of attorney—personal care, finances, and property .

• Financial statements, real estate, and family documents—including digital assets and passwords. 5

• Pre-planned funeral arrangements and instructions. 5

4. Protect the value of your estate and business.

• Consider life and property insurance coverage.

• Determine your exit plan strategy or succession plan.

• Investigate what to do to prepare the business for sale.

5. Reduce estate costs.

• Determine strategies to mitigate the potential tax impacts.

• Examine tax deductions and credits.

• Talk to an expert about reducing probate fees.

• Explore the potential benefits of trusts for your heirs.

6. Seek expert advice.


• Experienced financial advisor

• Legal counsel

• Tax and accounting experts

• Insurance consultant

Preparing your estate plan can be an enriching experience that provides peace of mind and clarity into the future for all involved. 

Speak to us about how we can help develop a comprehensive estate plan for you and your family.
  1. For children under 18 years of age or that require assistance due to mental and or physical challenges.
  2. Instructions and documentation for the transfer of a business, farmland, out of country real estate, bequests to charities, or similar unique to your requirements. 
  3. Select one or two alternative executors in case the one you first named cannot take on the role for whatever reason.
  4. If your executor resides outside of your province at the time of your passing, in most cases they will also have to post an estate bond called a foreign executor bond. An estate bond can be expensive and inconvenient for your executor to deal with. Source: https://www.willful.co/learn/choosing-an-executor-in-another-province-or-country
  5. Review the IPC Will Companion for more guidance. You may ask your IPC advisor to provide you with a copy.


Resources:

Estate Planning: First Steps, IPC, 2021

Estate Planning: Protecting Your Heirs and Beneficiaries, IPC, 2021

Estate Planning: Transferring Your Estate, IPC, 2021

CIRANO: Econometric Models on the Value of Advice of a Financial Advisor

Wealth Transfer 101: How to talk to your heirs about their inheritance, IPC Private Wealth, 2017

The Art & Science of Estate Planning: provided by Investment Planning Counsel Inc.

https://www.advisor.ca/my-practice/conversations/estate-planning-for-the-incapacitated/


Prior to implementing any strategies contained in this document, individuals should consult with a qualified Tax Advisor, Accountant, Legal Professional, Financial Advisor or other professional to discuss the implications specific to their situation. Estate law, including wills, powers of attorney and probate fees, vary and are governed by each province and/or territory. Please review provincial laws based on where you reside. 

Investment Planning Counsel Inc. provides this publication for informational purposes only, and it is not and should not be construed as professional advice to any individual. The information contained in this publication is based on material believed to be reliable at the time of publication, but IPC cannot guarantee the information is accurate or complete. Individuals should contact their IPC advisor for professional advice regarding their personal circumstances and/or financial position. 


Trademarks owned by Investment Planning Counsel Inc. and licensed to its subsidiary corporations. Investment Planning Counsel is a fully integrated Wealth Management Company. Mutual Funds available through IPC Investment Corporation and IPC Securities Corporation. Securities available through IPC Securities Corporation, a member of the Canadian Investor Protection Fund. Insurance products available through IPC Estate Services Inc. & PPI Management Inc. © Copyright 2021. All Rights Reserved.


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