Estate Planning

“Our goal is to help you realize your goals.”

Estate planning is a strategy, and a process, that ensures the orderly transfer of your assets, in the event of your death or incapacity, at the smallest financial and emotional cost to you and your family.
Estate planning is not just for the elderly or the wealthy. While you may not think your nest egg is substantial, even a mortgaged home can become a valuable asset if the mortgage is life-insured.

  • Why you need Estate Planning
  • Will
  • Executor
  • Tax Planning
  • Life Insurance
  • Bequests to charity
  • Guardian
  • Power of Attorney
  • The Process

Estate Planning Facts
49% of Canadians have not yet prepared a will*
21% of Canadians who have a will have not discussed it or their wishes with their named Executor*
56% of Canadians have not designated a personal or financial Power of Attorney*
25% of Canadians expect to experience a conflict with family members over a will*
*Source: September 1998 Compas Inc. Poll

Why you need Estate Planning
A properly structured estate plan allows you to choose your beneficiaries, maximize your assets and minimize your taxes and costs. Most importantly, it relieves uncertainty.
Without careful planning, your property could pass to unintended beneficiaries, or it could be reduced in value by unnecessary or unexpected taxes and costs. You want your loved ones to inherit assets, not problems.

Estate planning consists of several components, the most important being your will.

Your will is the only legally recognized document that allows you to choose how your estate is to be distributed. It directs your estate’s assets to your beneficiaries, or to trusts created for their benefit, and it names and empowers an executor to deal with your estate’s assets.

If you were to die without a will, the distribution of your estate would be subject to provincial succession law. This carries the risk of an inappropriate division of property; some intended beneficiaries might receive nothing. Also, the legislation does not take into account the tax consequences of your particular scheme of distribution.

Therefore, no one 18 years of age or older who has, or may acquire assets, should be without an up-to-date will. For many individuals, drawing up a will may be the only estate planning that they ever do.

One of your most important estate planning decisions is naming an executor to ensure that your wishes are carried out exactly as stated in your will.

Ideally, the executor will be someone who is trustworthy, knowledgeable about financial matters and lives nearby. You can choose to have more than one executor. This can be a wise move if you wish your spouse to be involved in the process but he/she lacks financial expertise or if your estate is large and complex.

Tax Planning
Minimizing the tax liability of your estate should be a key estate planning objective. While Canada’s provincial governments do not levy estate or succession duties, your estate may incur income taxes on assets you have accumulated in tax-sheltered retirement savings plans. It may also be liable for capital gains on your other investments, including a second residence.

While taxes cannot be avoided entirely, the impact on your estate can be significantly lessened if you understand how they are imposed and implement an estate plan that is tax-efficient.

Life Insurance
In order to pay the taxes on your estate, your beneficiaries could be forced to liquidate your property – at a time when markets are down and the assets won’t fetch top dollar. To spare your loved ones such hardship and help them in preserving your estate, you should take advantage of life insurance. The tax-free pay-out on a life policy can be used to settle the tax bill on your estate.

Bequests to charity
You can use your will to make bequests to your favourite causes. You can designate charities to receive gifts from your estate in the form of cash, real estate, securities or life insurance. Tax changes in Canada in recent years have made planned giving strategies very attractive. You can leave a legacy while at the same time minimizing the taxes on your estate.

Perhaps the greatest peace of mind that you can have as a parent is knowing who will care for your children should something happen to you. In most cases if your child’s other parent survives you, then that parent assumes the guardianship. However, you need to provide for the possibility that the other parent will not be available. Naming a guardian in your will helps ensure that your choice is appointed.

A guardian is legally responsible for the child’s physical care, health, education, and welfare until he or she reaches 18 years of age. This includes providing basic needs such as food, clothing, lodging, health care decisions and education choices. The guardian usually uses money provided by the estate for this purpose.

Power of Attorney
If one day you become physically or mentally unable to look after your financial affairs, a power of attorney authorizes someone of your choice to make financial decisions on your behalf. The person you select should be someone whom you trust. Without naming such a person, the government may take possession of your financial assets, such as bank accounts and investments.

The Process
At MC Wealth Management, we view estate planning as a process – one that is as unique as each family member. A MC Wealth Management Financial Advisor will sit down with you to analyse your specific goals and circumstances. We will then apply our expertise, gained from many years of experience, to tailor a plan that is right for you and your loved ones. Let us help provide peace of mind for you and financial security for your heirs.