What is Estate Planning

Estate Planning is the process of making a plan in advance and naming whom you want to receive the things you own after you die. IFA.tax specializes in minimizing the tax liabilities.
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  3. What is Estate Planning

What is Estate Planning

Estate Planning is all about securing your assets and the ones you enjoy. Our Advisors will assist every action to help you establish a strong estate plan. We help you to protect your family however make sure that your legacy survives on with those you love.

Estate Plan

There’s a lot to believe about when you start your plan. You want to live your life to the maximum and make sure that your heirs will get the most out of the assets you’re reserving for them. There are 3 basic documents that form the structure of an estate plan: a Will, an Enduring Power of Attorney, and a Personal Directive.

In addition, particular individuals and households can benefit from more specific services such as the creation of a family trust.

Estate planning is an essential workout you carry out to maintain your wealth for your family and schedule its organized devolution to your beneficiaries. It can involve Wills, Powers of Attorney, Inter Vivos Trusts, Testamentary Trusts, Living Wills, life insurance, critical disease insurance, long term care insurance, registration of assets in joint ownership, tax preparation, and business succession planning.

Insurance Carriers

  • Manulife Financial
  • Canada Life
  • Sun Life
  • RBC Insurance
  • BMO Insurance
  • Canada Protection Plan (CPP)
  • Industrial Alliance
  • Ivari
  • Equitable Life
  • Empire Life

Last Will and Testament

Planning your estate matters is first and foremost about having a will.

What is essential to you about preparing your estate? Our HNWI customers are primarily concerned about preserving the family wealth, offering a partner and kids, moving the reins of the family business, and leaving a legacy to a charitable cause.

If you die without a will, your assets are dispersed according to provincial legislation. It might likewise require extra time and legal charges to settle your estate issues.

Make a comprehensive list of your liabilities and assets. Consider your tax positions and desires for the personality of each possession. Pay unique attention to a family business and houses.

If something occurs to you, Review your family’s requirements and capability to keep their way of life. Check the beneficiary classifications for accounts such as your RRSP, RRIF, RESP, DPSP (deferred profit-sharing plan), pension, and life insurance policies.

Estate Planning Lawyer

What if you were to end up being incapacitated due to the fact that of disease or injury and not able to make your own decisions? A power of attorney (POA) is a must-have in your estate plan.

POAs differ from province to province, however in basic, they provide a family member or relied on friend the authority to make crucial financial decisions should you become unable to do so. If you do not have one, your family may have to go to court just to pay your bills. Once again, your partner is the most likely person to fill this role, though you ought to pick an alternate also.

Living Will

While a will and POAs can determine your wishes, they won’t really look after your family must you become incapacitated or pass away. For that, you’ll require insurance coverage.

Life insurance can play various functions depending upon your life stage.

For a young family with a huge home mortgage, safety and security may be their prime goal. For somebody later on in life, nevertheless, life insurance might be utilized as an estate planning tool– a chance to leave a legacy or pay taxes so your heirs do not have to.

Health Directives

A health directive, likewise called a living will or a power of attorney for individual care.

It gives you a state of how you should be treated if you’re unable to voice those decisions.

Every province permits you to approve power of attorney for health care decisions.

Anybody over the age of 16 can have a health directive, and the file does not need to be prepared by a lawyer to be legitimate (but it does need to be in composing, and it should be signed in front of two witnesses). You’ll need to appoint a person accountable for making medical decisions on your behalf and consist of any particular directions concerning medical care, such as whether or not you want to go on life support and for the length of time.

Term Insurance for Estate Planning

For young families, where cash is tight, the most cost-effective choice is term life insurance. It’s finest to purchase these policies as early as possible, say in your 20s, as health issues later on in life may make you uninsurable.

You’ll require to purchase enough protection to settle your present debts and replace your future earning capacity.

The guideline is to buy a policy that covers 80% of your yearly earnings for the next 10 to 20 years. If you make $50,000 a year and have a $200,000 home mortgage, the policy should pay between $600,000 to $1,000,000.

Permanent Life Insurance for Estate Planning

Permanent life insurance (consisting of whole life and universal life) has no expiry date. They are considerably more pricey considering that these policies have an investment component, which isn’t subject to tax, as well as a cash surrender value, must you cancel them.


As is typically the case, you might want to give your children/beneficiaries some or all of their inheritance in advance of your death. You need to plainly stipulate whether the money was a loan or a gift. You likewise require to specify whether the gift was an advance on their inheritance, or in addition to the child’s/ beneficiary’s portion of the estate.

The benefit of offering money gifts while you’re still alive is that it might lower the general tax concern on your estate when you die. When you offer money to adult children, there are no taxes payable, either by you or your child. Gifting cash is an excellent way to assist your kids while you’re still alive and can view them enjoy it.

Investments and Real Estate

If you provide your kid an investment portfolio or real estate, the Canada Revenue Agency will consider this a sale at fair market value, and you will be accountable for any capital gets taxes. Those assets will not have to pass through probate when you pass away.

Family Law

An essential aspect to consider is whether you desire your child’s spouse to benefit from your gift or inheritance.

Under family law (which differs with each province), any money gotten from the family of one partner is thought about to come from both partners if it is commingled with the couple’s shared assets.

For instance, if Robert inherited $100,000 from his daddy and used it to pay for the home mortgage or put it in his RRSP, then his spouse Maria could declare half, if the couple were to break up one day.

However if Robert had deposited the inheritance in a different account, he may not need to share this money after a divorce.

Moms and dads ought to specify in their will that a gift or inheritance is not for the shared benefit of both partners. All wills need to have such a clause. The reality is many marriages fail. When he or she requires it most, by taking these safety measures you might ultimately help your kid.


Probate is the process of lawfully validating a will, so all estates should go through a type of probate. Some provinces charge a modest charge for probate, while others base the cost on the size of your estate: Ontario has the greatest costs at 1.5%.

If you have a spouse, among the most convenient strategies is to hold property collectively. A house kept in “joint occupancy” by two partners will not go through probate: when one partner dies, their share of the property passes instantly to the survivor. The very same holds true of a collectively held investment account.

If assets are not held jointly with your partner, the basic rule is that the Canada Revenue Agency will deem it to be offered at a fair market price upon your death. Your estate will then be accountable for the capital gains taxes on any gratitude. For example, if you have a non-registered account with stocks and mutual funds that have actually grown in worth from $400,000 to $700,000, your executor would be responsible for reporting $300,000 in capital gains on your final tax return.

Your objective is to minimize probate fees.

Evaluation and Update your Will Estate Plan

Think about updating your will whenever you have a significant life event such as the birth of a child or grandchild when your kids reach the age of bulk, or if you or your called executor transfer to a various province. It’s likewise worth examining your estate plan if your net worth grows substantially. A bigger financial investment portfolio, a larger home, or a growing art collection need to be dealt with in your estate plan.

When someone dies, re-examine your plan. Typically, this is an automatic action if your partner passes away, however it should likewise be done if, state, your executor dies prior to you, or your power of attorney is identified with a devastating disease.

Do not get captured up in life and forget to upgrade from time to time. Evaluation it and keep your files and instructions approximately date.

Family Business Succession Plan

Analyze whether to leave your estate to the beneficiaries either straight-out or through trusts. Think about whether a portion of your wealth need to be dealt with while you are living. A family business succession plan need to tie into your estate plan.

Power of Attorney, Executors, and Trustees

Take great care in designating capable agents, powers of attorney, administrators, and trustees for your estate. They have similar powers as you do in handling your collected wealth.

Picking the right guardians for minor children is important. Your guardians and trustees might have responsibilities lasting approximately 18 years, or longer, depending on the children’s ages and the life of the trust you create.

Designate 2 competent people for each position. Ideally, one should be younger than you and live in the very same province. Grant them enough powers to perform their tasks as you would.

Be specific each appointee desires the often thankless job. Our Advisors counsel our HNWI customers to offer their appointees with a detailed letter of direction to make their jobs easier. They will likely experience some family dynamics in requirement of attention and resolve.

Taxes At Death

Taxes payable upon death are usually a much bigger concern than probate fees. The simplest way to minimize or delay taxes at death is to name your partner as the beneficiary on your registered accounts, such as TFSAs, rrifs, and rrsps. The full value of your RRSP or RRIF is taxable as income upon your death if left to anyone besides your partner.

Another method to decrease taxes is to contribute your stock portfolio, in-kind, to charitable organizations. When you contribute publicly traded securities, you will not have to claim any capital gains that might have accumulated for many years. Your estate will also get a charitable donation credit that can be used to even more reduce the taxes owed.

As constantly, professional aid is a must. Meet an estate planning legal representative and an accountant to develop a reliable plan.


Whether your beneficiaries are minor children or spendthrift grownups, you can avoid them from squandering your hard-earned savings by setting up a trust.

A trust is a legal entity that holds assets on behalf of the beneficiary and appoints a trustee to distribute them according to your instructions. You might advise the trustee to make routine month-to-month payments from the trust to the heir so the inheritance can’t be invested all at once.

Normally, there are 2 kinds of trusts:

  • testamentary trust is for when you pass away.
  • inter vivos trust is for when you’re alive.

Our Advisors

If this all sounds complex and challenging, simply take things one step at a time. A correct estate plan will safeguard you, your family, and your wealth, now and in the years to come. Benefit from our experienced consultants.


Make certain you update your will and account beneficiaries if you get separated or remarry. In the majority of provinces, a will is immediately withdrawn once you remarry (or get married for the first time, assuming you made your initial will when you were single). However, your will isn’t automatically canceled when you get separated. A brand-new marital relationship license doesn’t always suggest your new partner is entitled to the whole estate.

If you pass away without having actually made a will, your new spouse will need to share your estate – including the home you resided in together– with your children from a previous marriage. Even if you remember to upgrade your will, your ex-spouse might acquire a portion of your estate if you do not update the beneficiary of your life insurance policies.

Joint Assets

A popular estate-planning strategy is for a parent to sign up a property, such as a financial investment account or residence, in a joint name with an adult child. Joint ownership is usually set up for the benefit and to decrease probate charges.

While joint ownership can achieve both goals, problems might occur. Putting a property in joint name with an adult kid can lead to unexpected and dissatisfied effects.

The ramifications of a joint or individual ownership of assets require assessment for both income tax and probate purposes. In some cases, they are at chances.

Estate Freezing

HNWIs frequently choose to freeze the growth for their account of some or all of the assets now owned, for instance, the family business. The expected future development on the chosen assets can then be passed to the benefit of other members of the family, such as a kid or grandchild.

Estate freeze recommendations typically use the share structure of a private company. The general principle is for an individual to move certain assets at today’s fair market value for shares of equivalent worth in the personal business.

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