This checklist outlines some of the issues you will need to consider when planning your estate.

1. Prepare a will
A will is absolutely necessary to ensure that your loved ones receive your estate as quickly as possible and according to your wishes. You will likely work with your lawyer to prepare the actual document. We can help by:

  • Ensuring that your family has the income they’ll need through life insurance, trusts, or both,
  • Minimizing income taxes and probate fees owed by your estate, and 
  • Arranging for charitable donations.

2. Choose your executor
The executor of your estate is the person who ensures that your will is carried out. In most cases, they will probate your will, distribute the assets to your beneficiaries, and file the final tax returns. In some cases, they also plan the funeral.

An executor can be a person, a company, or a professional advisor such as your lawyer or accountant. In any event they need to be selected carefully, since they are responsible for carrying out your final wishes.

3. Name your beneficiaries
A beneficiary is a person or an organization that is named to receive funds and/or property in your will. Organizations may be a church, charity, or corporation. You can name as many beneficiaries as you wish.

A beneficiary may also receive funds or property through an RRSP, a Tax Free Savings Account (TFSA), trust, or insurance policy.  They simply need to be named as beneficiaries when the account or policy is created.

4. Choose a guardian
You will need to select a guardian if you have children who are minors, and/or a person who needs care, such as a disabled adult. The guardian(s) is responsible for the care and well being of the persons assigned to them. Normally, your estate provides funds to assist the guardian. Needless to say, naming your guardian is a very important task, especially when it comes to ensuring your children are protected.

5. Name a trustee if you have trusts
If you have monies or property in a
trust, you must name a trustee. This is the person who will manage and distribute any assets in your trust. They may, or may not, be the same person as your executor. In either case, they must follow the instructions left in your will when managing the trust.

6. Establish a Power of Attorney
This is a formal document that authorizes a person to act as your substitute in carrying out your financial affairs. People often establish a Power of Attorney in case they become mentally incapacitated. However, you can set it up for a one-time event, such as authorizing someone to sign a document when you are out of town.

7. Prepare a Representation Agreement
This names a person to look after you in the event that you become incapacitated. Whereas a Power of Attorney can only deal with financial affairs, this agreement authorizes a person to look after some or all decisions regarding your health care, business, financial, or legal affairs.

8. Consider your business
If you own a business with assets, you will need to include it in your estate plan. Do you plan to sell the business or pass it onto your children? Will they need to buy out a partner? Or, if your beneficiaries sell the business, how will they pay taxes on any capital gains? By answering these and other questions, you can ensure that your business will be handled according to your wishes after you are gone.

9. Consider using life insurance to benefit your estate
Most often, people use life insurance to provide income for loved ones. However, there are several ways you can use insurance to benefit your estate.

  • You can cover any taxes owed by your beneficiaries. For example, if you leave property to your children, they will pay tax on 50% of the amount that it has increased in value (also known as capital gains). A life insurance policy can provide funds to cover this cost. This also applies to any registered plans, such as an RRSP, that you leave to someone other than your spouse. If you leave an RRSP to your child, for example, its value will be reduced by nearly 45% after taxes are paid. Insurance can cover this tax cost as well.
  • You can use an insurance policy to leave money to your favourite charity or charities.
  • Insurance policies can also provide a tax-free inheritance to your beneficiaries.

10. Organize your records
Once you have your estate plan done, it’s important that your survivors, especially your executor, know where everything is. All you need is a simple document that lists:

  • Names and contact information of your financial advisor, accountant, and lawyer
  • Location of your will
  • Properties and securities that you own
  • Life insurance and other insurance policies
  • Bank and trust accounts
  • Location of your income tax records
  • Credit cards and any personal debts
  • And any funeral arrangements you may have made

It’s best to leave a copy with your lawyer, your executor, and with one or two family members.

There is a lot to consider when planning your estate, but there is no need to do it alone. We will work with your lawyer and accountant to ensure that everything is in place for your loved ones and your business. Contact us for your complimentary appointment to get started.