The best time to start planning for your estate is today

By: Lydia Potocnik, LLB, TEP, Vice-President & Regional Director, Trust and Estate Services (Ontario), BMO Trust Company

The latest Canadian Census report indicates that the greying of Canada’s population is accelerating. For the first time in Census history, seniors now outnumber children. Looking ahead, population projections show the gap between the two age groups will continue to widen. By 2031, almost one-in-four Canadians will be 65 or older1.

One of the takeaways for Canadians in light of these trends is that having our affairs in order should take on added importance. That’s what estate planning is — a process that helps you answer questions like:

  • Who will get what when I’m gone?
  • Can I preserve even more of my wealth for my heirs?
  • Can my assets — financial, digital, mementos, heirlooms — be easily located?
  • How can I make things easier for my loved ones during a difficult period?
  • Who will ensure that my ultimate wishes are carried out after my death?

Why you need an estate plan

Having a properly drafted Will is the cornerstone of an estate plan. But as your financial affairs become more complex, the need for more holistic planning grows. If you have children, philanthropic goals and assets such as investments, a business or a vacation property, you need a comprehensive estate plan to ensure that the wealth that you’ve worked hard to build is distributed according to your wishes — and to reduce the potential costs and delays involved in settling your estate, such as final taxes and probate.

Depending on your situation, there are different ways to accomplish your estate planning goals — including wills, beneficiary designations, powers of attorney, insurance, trusts, tax planning, and charitable gifts and foundations.

Taking the right steps for your situation might involve something as straightforward as ensuring the beneficiaries on your life insurance policies are current and up-to-date, so that any funds paid out by these policies go directly to your beneficiaries (and are not included as part of your estate, thereby reducing probate fees2 ). Or the strategies might be more complex, such as setting up a trust to hold property or assets. A trust can help protect and preserve assets being transferred to beneficiaries, especially in cases where there may be special needs or spendthrift concerns.

Tip: Consider naming a professional, such as a lawyer, accountant, or trust company, to act as co-executor of your estate. This way, your personal executor can focus on dealing with family members and beneficiaries, while professionals take care of the technical and time-consuming administrative duties.

An evolving process

The best time to review and revise your estate plan is when you are in relatively good health. Indeed, an important step in comprehensive estate planning involves planning for uncertainties and incapacity, such as changes to your health and well-being. That means having the right documents in place — including powers of attorney — to ensure your financial and health decisions are taken care of in the event that you are unable to do so.

Estate planning is an ongoing process that should be revisited as your life circumstances change, as your children grow, as your assets become more complex, as your goals evolve — or even as technology and society change. Passing on your digital assets, for instance, is something you need to consider.

We can help guide you through the process

Your BMO Private Banking Relationship Manager can help guide you through the estate planning process, connect you with the appropriate specialists where required, and give comfort and peace of mind to both you and your family.

Circumstances that call for a review of your estate plan

  • Death of spouse
  • Marriage or remarriage
  • Birth of a child or grandchild
  • Death of a beneficiary
  • Purchase or sale of a business
  • Beneficiary with special needs will receive a share of the estate (this requires special trust planning)
  • Executor named in Will predeceases you
  • Purchase of foreign property

 

1Statistics Canada 2016 Census.

2Probate fees are not applied in Quebec

 

All opinions and estimates contained in this communication are subject to change without notice and are provided in good faith but without legal responsibility.

The comments contained herein do not constitute investment advice or advice in the areas of legal, accounting or tax. It is your responsibility to consult with the appropriate professionals in those areas either independently or in conjunction with this assessment process. The comments included in this publication are not intended to be a definitive analysis of tax applicability or trust and estate law. The comments contained herein are general in nature and professional advice regarding an individual’s particular tax position should be obtained in respect of any person’s specific circumstances.