Wei Woo from Capital Research had once again provided us with an information blog. He continues to provide us with tips and tricks, this month the topic is Estate Planning from a Financial Perspective.
Estate planning ensures individuals’ financial and personal wishes are upheld after their passing. It uses legal tools like wills and trusts to dictate asset distribution and decision-making. Wei Woo emphasizes the challenges in finance, such as unclear wills and unauthorized information requests. Multiple marriages and tax laws add complexity. Proper planning also addresses medical incapacitation and offers peace of mind, ensuring beneficiaries are cared for and conflicts minimized. Regular reviews with professionals are essential.
Read his blog below
Estate planning is crucial for individuals to ensure their financial affairs, personal wishes, and responsibilities are managed effectively after their passing. Through careful documentation and legal structures such as wills, trusts, and advanced healthcare directives, individuals can articulate how their assets should be distributed, who should make decisions on their behalf if they become incapacitated, and how their legacy should be upheld. The attached estate checklist is a great resource to ensure you have all your boxes checked and in order on an annual basis, or when a major change in your life occurs.
One key aspect of working with a financial advisor is discussing investment asset distribution. Without a clear plan, provincial laws dictate how assets are divided, which might not align with an individual’s intentions. Estate planning ensures that loved ones, charitable causes, and beneficiaries receive their designated shares while minimizing potential conflicts among family members.
Within my 15 years of experience in the finance industry, I have had 1-2 investment clients each year who have unfortunately passed away: the reality of working with clients aged 65+. Some of the challenges, once an investment client has passed away for my practice, include potentially dealing with vague language written in the will for investment asset distribution, differences between asset designations of the will vs. designations at the financial institution such as RRSPs, and the executor not having access to the original will or a certified true copy of the will. These challenges may lead to a family dispute. There is also the subject of wishful beneficiaries – persons that are neither in the will or designated in the RRSP/TFSA – trying to gain information about a deceased client, which I am not allowed to release due to confidentiality reasons unless presented with proper documentation.
Another major aspect to consider is second or third marriages, adding another layer to estate planning.
Estate planning can mitigate tax liabilities. This requires staying up-to-date with the current tax laws and adjusting the plan as needed.
Furthermore, estate planning also addresses potential medical incapacitation. Documents like a durable power of attorney and healthcare directive designate trusted individuals to make financial and medical decisions, if one becomes unable to do so. This helps to mitigate legal issues and uncertainty during difficult times.
Overall, estate planning provides peace of mind. Knowing that a comprehensive plan is in place ensures that the individual’s wishes are respected, beneficiaries are cared for, and potential conflicts are minimized. Regularly reviewing and updating the plan is essential to reflect changes in family dynamics, finances, and laws. Consulting with your lawyer, financial advisor, and accountant can help you navigate the complexities of estate planning to create a lasting legacy which reflects your values and protect your loved ones.
We want to thank Wei Woo for sharing his experience. If you want to learn more you can contact him at:
Phone: (780) 299-0760
Email:WWoo@researchcapital.com
