The goals of an estate plan are to reflect your values and, importantly, to look after your loved ones. A loss in the family is difficult on those closest to us; an effective, tax-efficient estate plan can alleviate some of the financial and administrative burdens on them. Estate planning is a complex exercise; as such, it is beneficial to obtain professional advice to help ensure a smooth transition, and that your legacy remains intact and reflects each stage of your life. We designed this high-level checklist to guide you through important considerations for an effective estate plan. 

1. Will

Assets

  • Ensure you maintain an up-to-date list of all assets and liabilities.
  • Ensure your will indicates the jurisdiction holding your assets and the procedures involved in distributing these assets.
  • Be aware of what assets will be involved in the probate process and whether it makes sense to reorganize your assets.
    • Registered accounts (RRSP, TFSA, RRIF) and insurance products will include a beneficiary option while joint accounts typically have right of survivorship (i.e., both outside the probate process).

Beneficiaries

  • Ensure your will specifically states who will inherit your assets.
  • If beneficiaries are minors, you may have to consider alternatives (e.g., setting up a testamentary trust).
  • Consider if the beneficiaries have physical or health-related issues that may have an impact on them receiving your assets.

Executor

  • The executor you appoint will carry out the responsibility of distributing assets while following the legal process of administering the estate.
  • Consider if the executor is the appropriate person to carry out the responsibilities. Your executor is required to be a Canadian resident but equally important are personal considerations such as their ethics, willingness and trustworthiness, and the age and health of the person.
  • Ensure that you communicate your wishes to the executor.

2. Power of Attorney

  • A power of attorney is a legal document that appoints someone you trust to make decisions for you if you become unable to do so (e.g., if you are incapacitated due to a short-term or permanent illness, or accident).
  • Ensure the person you appoint is capable and understands your wishes.
  • Ensure you have an alternative person in mind in case the person you choose is unable to serve.

3. Documentation

  • Ensure all your important documentation is known and available to key members involved in your estate (and, ideally, that these documents are kept in a centralized place).
  • This includes passwords to financial institutions as well as online accounts (e.g., social media, organization tools and email accounts).

4. Financial Planning

  • Ensure you have a plan for the estimated tax bill and probate fees at your death.
  • Consider ways of reducing some of these taxes and fees involved.
  • Ensure there is enough money set aside to pay for taxes, funeral costs, and other expenses.
  • Consider if it makes sense to organize assets so they fall outside your estate at your death.
    • This reduces probate fees, taxable gains, and allows assets to pass to the beneficiary more quickly (probate can take six months to be completed).

5. Advanced Planning

Insurance

  • Ensure you have adequate life and disability insurance policy.
  • You can use life insurance to reduce and eliminate significant estate-related tax bills

Trusts: Consider if setting up a trust makes sense for you

  • Inter Vivos Trust: A trust that allows you to carry out your wishes while you are still alive.
  • Testamentary Trust: A trust that is set up after your death, which carries out your wishes.

Business Owners

  • Ensure you have a succession plan that includes the named successor, communication with your family, as well as how and when to pass on ownership/control of your business.
  • Ensure you consider the tax implications, including ways to reduce or defer taxes (e.g., using strategies such as an estate freeze or trusts).
  • Consider obtaining business insurance, especially for businesses with multiple owners.

This material is intended solely for information purposes, does not constitute investment advice, is not a recommendation or an offer or solicitation to buy or sell any security or instrument or participate in any trading strategy. The material is not intended for distribution to, or to be used by, any person or entity in any jurisdiction or country in which distribution or use would be contrary to law or regulation. The statements and opinions expressed are as of the date hereof (unless otherwise indicated) and are subject to change as market and economic conditions dictate. Effort has been made to ensure that the material presented is accurate at the time of publication.

Guardian Capital Advisors LP is a subsidiary of Guardian Partners Inc.; Guardian Partners Inc. is a wholly owned subsidiary of Guardian Capital Group Limited, a publicly traded firm listed on the Toronto Stock Exchange. For further information on Guardian Capital Advisors LP, please visit www.guardiancapital.com/private-wealth-management. All trademarks, registered and unregistered, are owned by Guardian Capital Group Limited and are used under license.