Will and Estate Planning

Will and Estate Planning by Vanessa Benedict Investment Advisor National Bank Financial


For many, estate planning sounds lofty and complicated, but it really isn’t. Everyone should give careful consideration to the financial, legal and tax issues that will affect the transfer of your assets to your beneficiaries. At any age, an estate plan can help you:

  • Set a value on your estate through an analysis of your assets and project estate values over time
  • Assess and address current and future liabilities, such as mortgages or bank loans, probate fees (estate settlement legal proceedings), taxes, legal fees, executor’s compensation, and any personal guarantees that will be payable by your estate.
  • Determine how best to meet the needs of your beneficiaries
  • Your estate plan can protect your estate and your intended beneficiaries from costly legal red tape, competing interests, and unnecessary taxation. This is reason enough to give it some serious consideration.

Trusts can be used to manage your estate assets, provide tax reduction and deferral opportunities, fund allowances and endowments for family members, serve as tax-advantaged strategies for charitable gift-giving, provide ownership privacy, and much more.

Here’s how a trust works: you appoint a secure and reliable third party (an individual or a trust company), as your trustee to look after certain assets for the benefit of your beneficiaries. To make the trust legal, you must transfer title or ownership of those assets to the trustee. The trustee in turn invests the assets, manages the growth, and sees that the assets are distributed to beneficiaries according to your instructions.

A trust may operate while you are alive, after your death, or both, and may be used to ensure that your assets are always managed according to your wishes.

Risky to delay estate matters
As average lifespans increase, so does the probability of acquiring a critical illness, requiring long-term care or becoming mentally incapacitated during our lifetime. A forward-looking estate plan would provide for these health conditions using insurance.

While there are several ways to ensure your estate goals are accomplished, two are considered cornerstones of estate planning and should be prepared by everyone. These are having a properly executed and current Will and appointing a power of attorney.

Many people delay writing their Will under the assumption that being young, or in good health or without dependants, justifies waiting. However, if your assumption is wrong, your beneficiaries will get what the province mandates. In addition, the absence of a prepared Will invariably causes delays and extra expense for surviving loved ones.

Careful consideration should be given to the value of your estate and those people you wish to benefit from it. Questions that should be considered are who should receive what, and under what circumstances. For example, should money be held in trust for a child until a certain age is reached?

Choosing an executor
Your executor is responsible for administering your estate according to the wishes in your Will. Not only should you choose a primary executor, but also an alternate (a contingent) if you are concerned whether an individual you may wish to appoint would be up to the task. You can also consider naming a corporate executor, The duties of an executor are many and complex, and the emotional strain can be high, so choose this person carefully. Letting them clearly know your wishes will give you peace of mind, and will allow them to act decisively during a potentially unsettling time.

Powers of attorney
Incapacity or ill-health raises another estate planning issue: what if you aren’t capable of making crucial decisions concerning your health, finances or the care of your children? To prepare for such a possibility, you need to name a power of attorney, both for personal care and for property and asset management. The individual(s) or trust company you name as your attorney will have the power to make these important decisions for you.

If you have minor children, you should take great care to nominate a Guardian for them – someone with similar values, who is physically, emotionally and financially capable of taking responsibility if necessary. Your estate plan should protect you and your assets from the risks of financial and legal mismanagement, and excess taxation.

A power of gives someone the authority to manage and govern your property and financial affairs while you are still living if you become incapable of doing so. There are also powers of attorney for personal care governing health and other life decisions. Everyone should have both. You will need to complete a legal document to appoint a power of attorney.
There are different roles a power of attorney can take on, over a limited period of time (i.e. during your absence on vacation) or in more enduring situations and with broader control (i.e. managing all of your financial affairs if you are somehow incapacitated).

Whatever stage of life you are at, Wills and powers of attorney are two cornerstones of prudent estate planning. They can help ensure that your worldly assets are properly cared for, and that the most important people in your life are properly considered at an important time. However, Wills and powers of attorney are also potentially complex legal documents that require the advice of specific professionals to implement properly.