Planning an estate isn't something exclusive to the wealthy. Everyone should have some sort of estate plan in place to ensure their financial matters are resolved quickly and expediently, and their family and loved ones lose as little as possible to taxation. Money is not the only thing to consider – putting a plan in place for your loved ones will ensure your future wishes are put into place and your loved ones are taken care of.
A will is the most common and perhaps the most important document associated with estate planning. If you want to ensure your will is properly written and correctly fulfilled to your wishes and provides your executor with the clearest direction, it is recommended that you have your will prepared by a qualified legal professional.
Your will must include an appointed executor - an executor is responsible for the protection, evaluation, administration and distribution of the Estate and is personally liable for any errors, whether intentional or not. The role of an executor can be complicated and time consuming. Although many people ask a friend or family member to be their executor, your estate may be better served by an impartial expert in estate administration, such as a Professional Trustee.
A Professional Trustee will administer your estate and ensure your wishes are carried out as indicated in your will or other legal documents. You may appoint a professional trustee as the sole executor or as a joint executor along with a family member or friend.
Executor responsibilities may include:
•Locating the will and submitting it for probate
•Making funeral arrangements
•Gathering and documenting your assets
•Preparing a list of liabilities and arranging payment of debts
•Distributing the assets to the beneficiaries
•Preparing and filing income tax returns
•Investing, managing and distributing funds held in ongoing trusts
Other items in your will may include the distribution of estate assets and personal affects, named guardian for your child(ren), and funeral arrangements. The best and safest way to create a will is to work with an expert, as many do-it- yourself will packages can leave details open to legal interpretation.
Your will should be updated periodically and in consultation with your professional advisor, especially as you acquire new assets. You should also update your will if you have a new child. You should also be aware that if you marry, your existing will becomes invalid.
Power of Attorney
Is a written document in which one person appoints another person to act as an agent on his or her behalf in respect to managing their financial affairs and property matters, should they not be capable. A power of attorney generally is terminated when the principal dies or becomes incompetent, but the principal can revoke the power of attorney at any time. When preparing a power of attorney, it’s important for you to work with a lawyer to ensure you are fully aware of the powers and authority you are granting to your designated attorney. Turtleford Credit Union will ONLY accept lawyer drawn power of attorney documents.
Joint Bank Accounts
Joint accounts are bank accounts in which two or more people have ownership rights over the same account. In some cases, joint account may be considered as an option for someone to get help from family members or friends to pay bills and manage their finances.
Health conditions or mobility issues could make it difficult for someone to manage their personal banking on their own. Getting to the bank or using online banking services can be difficult hence; consideration is given to a joint account with a family member, such as an adult child, after the death of a spouse who used to deal with the household finances.
It may be important to consider other consequences of a joint account such as whether probate fees or taxes will apply upon the death of a joint account holder or whether the remaining funds are intended to form part of the deceased’s estate or be gifted to the surviving joint account holder. In some cases this could be challenged by other family members who may think they have an interest in the money in the account as an inheritance. The surviving joint account holder may have to demonstrate that the deceased account holder intended the remaining funds be a gift to the joint account holder. This could potentially lead to delays in the surviving account holder being able to access funds in the account. These considerations may be addressed in consultation with a lawyer.
For further information on Power of Attorney and Joint Bank Accounts please click.
The Turtleford Credit Union is committed to providing our members with investment options and financial planning suited to their individual needs. Through our contracted Wealth Services provider we can offer you professional money management through Credential Asset Management Inc. mutual funds.*
Our Wealth Planner, Hayden Friedrich, focuses on the six pillars of financial planning:
1. Cash Flow – having enough to cover the basics, and emergency needs - medical, home, vehicle, plus opportunity purchases, and travel opportunities.
2. Tax Planning – tax efficient investing, income splitting, maximizing income, minimizing taxes.
3. Investment Planning - determining goals, assessing time horizon, portfolio construction, risk analysis, and asset allocation across geographic and market sectors.
4. Retirement Planning – RRSPs, RRIFs, LIFs, LIRAs, TFSAs, DPPs, etc. – exploring the plans; Pension plans: defined benefit vs. defined contribution – explaining the differences.
5. Risk Management – life insurance, disability insurance, critical illness insurance, long term care insurance.
6. Estate Planning - Business and farm succession planning, reviewing wills, introducing trusts.
Below is a suggested checklist to bring on your first appointment:
• Last 2 years tax returns (plus last 2 years corresponding notice of assessments).
Please remember to bring both personal and business if incorporated.
• Copies of all investments
• Copies of pension statements
• Any personal insurance eg. Life, disability, critical illness, health plans
• Any group benefit information
• Copies of their wills (if they have one)
Everyone, regardless of age, employment or accumulated weath, can benefit from having a financial plan in place.
Consider booking yours today!