Planning to Protect Your Legacy

Your estate is everything you own today – your home, savings, investments, life insurance and personal possessions. So, no matter where you may be on your financial journey, you have an estate that needs protecting. But how you approach this plan is important.

Julie decided to save money by purchasing a “legal will kit” online. However, when she opened the kit, she learned that while it didn’t break any laws, there was no guarantee that it would be considered valid. In the end, Julia turned to a lawyer to draw up a valid will to feel confident that her estate would pass to her heirs with as little hassle as possible.

As part of their estate planning, Peter and Mary chose joint bank accounts, term deposits and joint ownership on their homes to make transfer at death a smoother process. After Mary died, Peter thought using similar joint ownership with his daughter Megan would help avoid probate and transfer property more quickly upon his death. Fortunately for Peter, his son connected with a financial advisor before letting his dad move forward with this plan. The financial advisor explained that Peter could be vulnerable if Megan experienced financial difficulty or bankruptcy while still on title. Not only could his assets be subject to seizure by Megan’s creditors, but it may also be challenging if her marriage dissolved or if Peter remarried. Based on the financial advisor’s advice, Peter made provisions in his will for the disposition of his property and put in place a life insurance policy that allowed him to name beneficiaries for quick transfer of funds on his death.

Roy, a retired barber, and widower, owned commercial property, RRSPs and other investment assets when he died. Unfortunately, markets were low and real estate sluggish when he passed. Sadly, his kids had to sell his property at bargain-basement prices to pay income taxes owing and other estate costs. This was a painful lesson in estate planning for Roy’s children. Determined that this wouldn’t happen to them, they worked with a financial advisor to put life insurance in place to cover their anticipated tax and estate costs upon their deaths.

Frequent travellers, Ted and Alice, were worried that something might happen to them at the same time. To protect their estate, their financial advisor suggested they review their beneficiary designations, and where possible, name their adult children as secondary beneficiaries. This meant that if they both died at the same time, proceeds would be paid directly to their children without having to pass through the estate.

Planning today for how you want your estate handled assures you that your legacy will be protected with the least amount paid in legal fees and taxes for both you and your heirs. Contact our office to chat with a financial advisor about your estate planning goals.

*Fictional characters for illustrative purposes only.