Maximize your legacy through estate planning

The COVID-19 pandemic prompted many Canadians to think more deeply about estate planning. Pandemic or not, it is extremely important to maintain an up-to-date estate plan to ensure a smooth transition of assets and protect your beneficiaries. Make sure your estate plan has all of the essential elements listed below – and talk to your Raymond James advisor about how they can help you maximize your legacy.

The essentials that should be in every estate plan

Your will is a legal document that names an executor to manage your estate and distribute your assets according to your wishes. A will also enables you to name your preferred guardian for minor children. Without a will, your assets will be distributed according to provincial/territorial intestacy laws – which may not match your preferences. A will should be clear, practical and tax efficient.

Powers of attorney are legal documents that empower someone else to act on your behalf in the event of incapacity. There are two types, which may have different names in different provinces/territories: one focuses on financial matters and the other focuses on personal and healthcare decisions. Because a power of attorney can give another person significant authority, it’s very important to choose your attorney(s) with care.

Costs after a death may include funeral expenses, legal, accounting and other professional fees, provincially/territorially levied probate fees, and (often the biggest one) taxes. There are many relatively simple ways to reduce some of these costs, such as beneficiary designations or planning to make strategic donations to charity. Your advisor can help you decide what will work in your situation.

The optional extras that can make a big difference

Planning for your funeral and expenses can give your loved ones one less immediate worry. It also helps to discuss your wishes with your family so they know what you would want.

Life insurance can provide a tax-free lump-sum benefit in an amount designed to meet your specific needs – whether that means covering funeral costs and/or taxes, topping up bequests to loved ones or donating a larger sum to charity. Make sure you consider who you name as beneficiary on your policy, and whether you want it to be part of your estate or pass outside it.

One common advanced estate planning strategy is the use of trusts. A testamentary trust takes effect after death and allows you to provide specific instructions related to when and how beneficiaries (including minor children and disabled beneficiaries) receive assets. An inter-vivos (or living) trust takes effect during your lifetime and may help you reduce probate fees, taxes and maintain privacy. Trusts require sophisticated planning, but can be extremely useful.

Being an executor can be a time consuming, stressful responsibility and can give rise to personal liability. Complex estates require a higher level of expertise but even a simple estate can have many unforeseen challenges. It is not always an honor to appoint family members or friends. You may want to consider the use of a professional trust company executor. Your Raymond James advisor can talk to you about that too.

Speak with your Raymond James advisor about your estate plan. Taking steps today can help ensure more of your assets transfer and that the process is as easy as possible for your loved ones.

Four steps to a comprehensive estate plan

1. List all your assets and liabilities and where your executor can find your legal documents and financial records

2. Take time to identify your estate planning goals and priorities, including challenges you want to address

3. Meet with the professionals who can help you design and implement an estate plan to achieve your objectives

4. Schedule regular reviews of your estate plan to make sure it keeps up with changing circumstances and legislation

Statistics and factual data and other information are from sources Raymond James Ltd. (RJL) believes to be reliable but their accuracy cannot be guaranteed. Information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. It is provided as a general source of information and should not be construed as an offer or solicitation for the sale or purchase of any product and should not be considered tax advice. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd. (“RJFP”), a subsidiary of Raymond James Ltd., which is not a Member - Canadian Investor Protection Fund. When providing life insurance products, Financial Advisors are acting as Insurance Representatives of RJFP.