Estate Planning Is a Part Of Your Comprehensive Financial Plan

A Check overlaid with a charity heart symbol representing the giving and estate planning aspect of a comprehensive financial plan

What Is Estate Planing? and Why Is It Important to Your Comprehensive Financial Plan?

First Let’s Talk About What an Estate Is

Everyone has an estate, and your estate is simply everything you own, everything that’s under your name; your home, your investment accounts, your personal property, your cars and yes, even your collection of video games.

The fact is, no matter how modest or how large it is, everybody has an estate, and not a single one of us can take it with us to the afterlife.

So to simplify it, your estate is everything you would leave behind if you were to pass away.

So what’s an Estate Plan?

Everyone has an estate, and your estate is simply everything you own, everything that’s under your name; your home, your investment accounts, your personal property, your cars and yes, even your collection of video games.

The fact is, no matter how modest or how large it is, everybody has an estate, and not a single one of us can take it with us to the afterlife.

So to simplify it, your estate is everything you would leave behind if you were to pass away.

Estate planning gives your control when you can no longer make decisions, and a proper estate plan minimizes the taxes, fees and legal costs when leaving assets to your loved ones. After all, you wanted to give your assets with your family and not the CRA.

Estate Planning is not just about material possessions.

Estate planning can also:

  • Include instructions for passing your values and philosophy along with your legacy. You could do this by creating directives and requiring those specific criteria that are met before the distribution of assets—for example, taking personal finance classes before receiving access to their inheritance.
  • Include instructions for your care if you become disabled and are unable to make decisions for yourself.
  • Allow you to name a guardian and a financial trustee for minor children. This could be different individuals.
  • Allow you to plan around government benefits for family members with special needs. Often, these government benefits have an asset or income tests, and leaving them with an unplanned inheritance could potentially disqualify them from government assistance that they need.
  • Allow you to give to loved ones who might be irresponsible with money. Creating a disbursement plan would ensure that they do not squander the resources you’ve given them.
  • Allow you to keep your assets within the family and create ultimate protection from creditors or divorce.
  • Allow you to transfer risk by using life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury. We also add critical illness insurance to make sure a terminal illness does not empty your estate.
  • It allows you to transfer your business assets because of your retirement, disability, or death using provisions that minimize friction with your partners or shareholders.
  • Allow you to Minimize taxes, probate costs, and unnecessary legal fees because of disputes. 
  • Allow your family to receive your assets faster than following the standard distribution regulations set up by the provincial government.

Do you need an Estate Plan?

You Already have an Estate Plan

Let’s first address this by saying you already have one. Or rather the government made one for you. And depending on your province, it may be precisely what you want to do with your estate.

But, the chances are, you’d rather make the call instead of relying on courts to make the decisions for you.

For most Canadian provinces, unmarried individuals have their parents as the primary recipients of their assets. You need to check with your province.

If you have modest assets and your parents are not reliant on your income, that level of planning may be sufficient.

But as life evolves, this will likely fall short of giving your best to the people you care about.

So, Who Needs to Make a Personalized Estate Plan?

  • Anyone who has significant assets that carry deferred taxes, such as privately owned businesses or real estate. These tax liabilities need to be paid the year of death.
  • Anyone who has financial dependents.
  • Anyone who has business interests they want to pass down.
  • Anyone who’s religious beliefs would not permit the use of extraordinary measures of treatment to preserve their lives

How Does a Financial Planner Help With an Estate Plan?

Financial Planners are not lawyers and will not draft the legal documents such as wills, powers of attorney, buy-sell agreements or other official documentation that would legally protect your wishes. 

However, we have a strong referral relationship with professionals that would craft these documents for you.

By working with us as financial planners in your estate plan,  you will receive the following benefits.

We Will Help You Clarify and Articulate Your Goal and Values to Personalize Your Financial Plan and Your Estate Plan.

We will help you clarify and articulate your goal and values. The legal team will implement what you want; however, without being clear about what exactly you want to accomplish, your lawyers could end up drafting documents that are actually conflicting with what you aim to accomplish. This happens when there are no clear directions from you. 

As your Financial Planners we, will help you organize your records and review property titles.

When we work with couples, it’s often clear that there is someone in charge of finances and record keeping. Most of the time, it’s the wife that acts as the household CFO. 

Whoever is at your home, if they were to pass away or to become disabled, it becomes difficult for the rest of the household to figure out where everything is or why things are set up the way they are. 

As your planners, we’ll keep tabs on your important documents and help you compile them, so when you see your lawyer or one of our referral partners, you will be better organized.

We, Will, Help You Save Money.

An estate plan does not need to be expensive by simplifying things through our process; you would reduce the upfront costs in setting up your will, personal directives and other legal documents. Most importantly, you will save money in taxes and legal costs down the road. We integrate estate plans with our comprehensive tax strategies. 

We’ll Help You Get Peace of Mind.

Knowing that you’ve addressed these issues ahead of time and creating a plan that’s in one place will give you comfort that you’ve done everything for your family, even if you can’t be there for them personally. As difficult as it may be, you also have the ability to show your family what you have planned ahead of time. You’ll be able to create a plan that they understand so you can further your values and the life you’ve envisioned for them. 

Plan before you need it. Create your estate plan now.

Nobody likes to talk about our mortality or disability, but creating provisions now will keep your family together financially and emotionally. You don’t want to leave the decisions on their shoulders when they should be grieving or helping you with your recovery. Most families are caught off guard because they could never imagine that they could suffer a tragedy such as the death or disability.

Want to Get started?

Work With a Fee Based Financial Planner In Calgary.

Hervin Pesa, CFP- Financial Planner Smiling

If you’ve always wanted to take charge of your finances but life has just gotten in the way, you might just need a little help.

I’m a Calgary based Certified Financial Planner and I’ve been helping Calgarians build and protect wealth since 2012.

Book a complimentary financial fitness session with me by clicking the button below.