Six steps to building your estate plan

When most people think about estate planning, they usually think about their Will. But a valid Will is just one part of an overall estate plan — especially if an estate is particularly large or complex.

You can follow these six steps to ensure you address all aspects of your estate plan:

1. Maintain a current inventory of your assets. Having a comprehensive list of your assets and liabilities can greatly expedite the transfer of your wealth. By knowing where everything is, your executors will find it is easier to distribute your estate when the time comes.

Often, the deceased’s assets can be located in various places, such as banks accounts, safety deposit boxes and in their homes. A prepared summary of all the assets can ensure all the assets and liabilities, and their locations, are identified. The summary can also identify the asset’s ownership structure (e.g. sole or joint ownership) and any beneficiary designations applicable to the assets.

2. Define your objectives. Once you know what you have in terms of assets, your next consideration is deciding what to do with it. You will have a range of issues to consider, such as deciding on your beneficiaries and whether you want to give to charity.

A few points to consider: Do you require primary or secondary beneficiaries? The distribution of an estate can be an emotional experience. You may want to consider discussing your estate plan with the beneficiaries to ensure your intentions are understood and state how long you intend to provide support to your immediate family.

3. Evaluate your objectives. Once you know what you want to accomplish with your estate assets, the next step is to determine the feasibility of your goals based on financial situation. You will need to consider factors including inflation, tax liabilities, as well as provincial or territorial succession and family law legislation.

4. Identify the actions you need to take, such as updating your Will or changing legal ownership of assets.

Many potential issues can be easily resolved with a well-constructed Will. Other elements of your plan could include changes in the legal ownership of assets, a full review of beneficiary designations for your registered plans and life insurance policies, the purchase of additional insurance to address estate-preservation objectives and possibly the gifting of assets prior to death.

5. Consult with the appropriate professional advisors to ensure your plan is properly implemented. Depending on your situation, you may need to consult with several professionals, including an accountant, lawyer or legal advisor, notary, financial planner, trust officer and Investment Advisor.

Select advisors with expertise in estate planning. If you need heart surgery, you wouldn’t visit your family doctor, you would seek out a heart specialist. The same can be said for estate planning.

6. Review your plan. Changes in both your personal situation and legislation may require changes to your overall estate plan. You should regularly review your plan to ensure it continues to meet your objectives.

Always be vigilant and know that your estate plan may need to change. Periodic revisions will ensure it continues to meet your objectives.

(Christopher D. Burns FCSI, FMA, CIM, BSc, BA, is Associate Portfolio Manager and Wealth Advisor with RBC Dominion Securities Inc. and a member of CIPF. He can be reached at 416-289-4150 or 1-888-440-7680. This article is for information purposes only. Consult a professional advisor before taking any action based on this article.)