McCay Duff LLP is publishing a three-part series on the topic of planning your estate, written by Senior Tax Manager Paul McConkey. In part one of our series, we looked at the five W’s of estate planning that every person should consider as they start the process of putting together a plan custom-tailored to their circumstances. In this blog, we look at all of the steps someone should take into consideration when they start planning their estate.

Estate planning is deciding, during a person’s lifetime, who will inherit their assets after their passing and the management of those assets during their lifetime, if they become incapacitated and unable to conduct their own affairs. If you realize this might be applicable to you – what’s next? Steps to consider for estate planning that McCay Duff can assist with:

Make an inventory of all of my assets & debts

An inventory is a list of what you own and what you owe. It is extremely useful for determining your goals as you prepare your estate plan. It also makes life easier for the person who will have to settle your affairs after your death. Make sure it is always up to date and keep it in a safe place.

Establish my Goals

Your goals and objectives may include any of the following:

  1. Make sure your spouse is financially secure, 
  2. Increase your wealth until your children turn 18, 
  3. Eliminate costs around settling your affairs that might decrease your wealth, 
  4. Decrease taxes so your heirs will receive as much money as possible, 
  5. Prevent the person who settles your affairs from selling expensive or sentimental property to pay your debts, and 
  6. Transfer control of your business to your children. 

Get a Will

A will is essential for expressing your wishes, especially should you become incapacitated and unable to manage your own affairs.

Provide for Family Members who need Support

You might want to provide financial support to family members but without giving them control over your assets. This is usually done through a testamentary trust and this type of trust comes into existence the day you die, under terms established by your will. 

Avoiding Probate Fees & Taxes

There will always be tax implications when you pass away. Trying to minimize the potential liability while still alive makes perfect sense. Probate fees are provincial court filing fees based on the total value of your assets when you pass away.

One option might be an inter-vivos trust (known as a “living trust”) that would allow you to transfer assets to one or more trustees for the benefit of your heirs, while you are still alive.

Another option is Joint Tenancy with Right of Survivorship that lets two or more people own an asset together. When one person dies, his or her ownership passes immediately to the other person and is not included as part of the estate.

Designate Beneficiaries

Naming a beneficiary (or beneficiaries) on your registered accounts can help you pass on your wealth efficiently and help lessen the strain on loved ones.

Consider the Family Business

If you have a business and want to pass it on, consider which family members have the inclination and aptitude for running the business. Are they involved in the business currently? Share transfers can be contemplated while all principals are alive and done to minimize taxes. What is your business currently worth? We can assist with determining the valuation of your business.

In the third & final instalment, we will go into more details on Estate Planning when family corporations are involved. Your trusted tax advisors at McCay Duff would love to discuss your estate planning needs if the time for you is NOW! The tax team, headed by Greg Kauffeldt, has over 50+ combined years of providing clients excellent estate planning advice and strategies.

McCay Duff LLP, in collaboration with legal and financial planning professionals, can effectively assist you with your estate, financial and succession planning needs. Early and effective planning assists in minimizing taxes and ensuring all compliance requirements are met.

Contact us today to enjoy the benefits of having estate, financial and succession planning specialists on your side.