Don’t be averse to planning for your future

By  Gerson D'Souza, CIM
  • November 7, 2015

You’ve likely heard of Canadians dying without a Will. Many of us, when faced with planning for our eventual death, would prefer to put the thinking off as long as possible. We end up passing away without any definite plans for our estate on paper.

Why do we have such an aversion to planning for the most guaranteed eventuality: death? It might be that we have a fear of considering the unknown. Maybe we feel we don’t have enough for ourselves during our lifetime, so planning for someone else is futile. Possibly there’s an idea that things will just sort themselves out on their own. In my experience, in most cases it’s because we just don’t know where to start.

In terms of how to begin thinking about your estate, one might consider the following questions:
o What assets do I own?
o Do I have family members who rely on me? Would financial help improve their life?
o How much money will I actually need/spend during my lifetime?
o Which causes do I wish I could support more?
o Who are the people I want to help?
o Are there people I don’t want included in my estate?
o What would be the worst outcome for my estate before or after I passed away?

Considering each of these questions should help give context to what an estate plan would look like. Once the thought process is started, most people start thinking much past the typical “all to spouse and kids” type of estate plan. It doesn’t take much time to realize that leaving your home to someone who will use it makes much more financial sense than giving it to someone who will just end up selling it and paying commissions, taxes and fees to do so. Placing money in your grandchildren’s hands (or in trust accounts for them) is likely more tax-effective than giving it to your children who are likely already earning a good income.

Making a plan for how to most effectively donate to your charity of choice can keep more money with them to use, while avoiding taxes.

The consideration of the questions above, and the ensuing discussion, should likely be done with your family, as they are usually the most immediate benefactors of your plan. Planning a discussion around Thanksgiving, Christmas or some other family holiday is a good way to bring it up, since most of the parties involved will be there to add their thoughts.

After a basic outline for your wishes has been formed, consulting an estate lawyer is the best way to start formalizing those ideas into a properly drafted Will. Once drafted, this will form the legal backbone to your estate plan, and will designate who will help to manage your affairs both while you’re alive (powers of attorney) and after you have passed away (executor).

More advanced planning can be done with both your estate lawyer as well as your financial advisor, but having a Will puts you ahead of most Canadians in terms of planning for what will be known as one of your last acts in this life. Giving some time to a plan will ensure that your wishes are upheld and that your estate benefits as many people as possible.

(D’Souza is an Investment Advisor with TD Waterhouse.)

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