Estate Planning

Many people have asked me about how to efficiently transfer their holdings to loved ones should they pass away. In response, I prepared an Estate Planning Checklist to ensure that they do not overlook key areas. The following is a partial list of items from that checklist that you need to consider when formulating your Estate Plan:
 

Getting Started — Have you made an inventory of your assets and liabilities? Make a list including your home, vacation property, investments, registered plans, bank accounts, business interests and life insurance. Review the ownership of these assets. Do you own them solely or jointly? Have you named beneficiaries for your registered plans and life insurance? If so, is the beneficiary information current? Have you thought about your personal and household property?
 

Selecting an Executor — Have you selected your executor? Does this individual know where your important papers are located? Does your executor have knowledge of your investments, business and property matters? Have you provided your executor with a current net worth statement? Have you named an alternate executor in case the first one is unable or unwilling to take on the job?
 

Estate Distribution Planning — Make a list of family members and others you would like to choose as your beneficiaries. Consider how your estate will be divided among your beneficiaries through both your will and by beneficiary designations.
 

Will Planning — Do you have a properly planned and prepared will to ensure that your assets will pass efficiently to your intended beneficiaries with a minimum of tax? Does your current will reflect your family circumstances and your goals and objectives? Do you know what the tax consequences will be for your beneficiaries? Would they benefit by receiving their inheritance through a testamentary trust structure?
 

Tax Consequences of Wealth Transfer — Can you afford to gift assets to your children during your lifetime?  Have you considered the tax consequences of gifting assets while you are alive?  Have you considered what assets in your estate can be rolled over tax-free to your spouse and what assets will be subject to income tax at death?  How much income tax will be payable at your death, and is there enough liquidity to pay that tax?  

Asset Protection — Is there potential for family disputes or disagreement in settling your estate? Have you made adequate provision for your dependants? Are your assets exposed to potential claims of creditors and others? Have you reviewed the ownership of your assets and your corporate structure in light of potential business risks? Have you considered asset protection strategies such as re-organizing your corporate assets and family trusts to provide that protection?
 

Succession Planning — If you are a business owner, have you developed a plan for the sale of your business, or for the transfer to family members? Do you have a buy-sell agreement for your business? Have you taken into account family dynamics and how the transfer will impact all of your family members? Is your succession plan tax efficient? Is an estate freeze appropriate in your circumstances? Do you have a family trust?
 

This is only a partial listing of areas to consider when formulating an efficient estate plan. If you would like to receive the complete checklist, please email me and I will send you the version that I use with my clients. •

Peter Murray is a senior financial advisor with Assante Capital Management Ltd. (Member CIPF) in Calgary. Email your questions or comments to Peter at pmurray@assante.com or check his website at assante.com/advisors/pmurray.