One of the most important financial strategies is to plan for tomorrow. Estate planning is an important financial strategy that almost everyone can benefit from. By successfully planning for the future of your assets, you can be confident that your estate will be protected and retained. Further, by developing a proper plan for your estate, you can ensure a secure and swift transition of assets for your beneficiaries. 

This month, The RaeLipskie Partnership will walk you through the importance of estate planning and provide you with key planning tools for developing a comprehensive estate plan. 

What is an estate plan? 

Before we can consider the key elements of a proper estate plan, we must answer the question: What is an estate plan? 

According to Investopedia, “estate planning is the preparation of tasks that serve to manage an individual’s asset base in the event of their incapacitation or death. The planning includes the bequest of assets to heirs and the settlement of estate taxes.” By developing a comprehensive plan for your estate, you are managing how your assets will be preserved and distributed, and who the beneficiaries will be.

An estate plan not only outlines the future of your assets, but also clarifies the process in which you wish for this to take place, including funeral arrangement, concerns over custody, estate taxes and possessions. Without an appropriate estate plan, your assets are not only at risk of increased taxation, your loved ones will be left with the difficult responsibility of organizing your affairs. 

How to make an estate plan?

Now that we understand the importance of developing an estate plan. We can consider: How to make an estate plan?

The following guide is an estate planning checklist provided by the Government of Canada

  • Leave a will
  • Name beneficiaries in insurance and other policies
  • Plan your funeral
  • Prepay your funeral
  • Buy life insurance to cover expenses
  • Give gifts before death 
  • Spend unsheltered assets first
  • Use final RRSP contributions 
  • Buy permanent life insurance as an investment 
  • Transfer property to joint ownership
  • Set up trust fund(s)
  • Make arrangements in case of incapacity 

Creating an estate plan

Now we move onto the important question of: How to create an estate plan?

When creating your estate plan, you will want to cover all areas to ensure that your finances and your beneficiaries are most protected. 

First, you should prepare an inventory of all assets and liabilities. By guaranteeing nothing is left out, your total estate can be accounted for and managed.

Next, set out your objectives. By clearly outlining your intentions for your assets after they are no longer yours, it is important to clearly understand and define those expectations so they can be appropriately included in your estate plan and will. 

Reach out to a financial advisor or estate planning professional to assist you in achieving your objectives and develop a corresponding estate plan. 

Reviewing your estate plan

Finalize your estate plan and review it regularly. Much like it is important to regularly evaluate your financial goals and strategies, it is important to review your estate plan to make sure that it is in keeping with your wishes and your current financial situation. You will want to conduct a regular and thorough assessment of your estate plan, to ensure it is organized, comprehensive and up to date. 

As an estate plan is a legally binding document, it should remain in keeping with your objectives and wishes, addressing any changes that may arise overtime. A financial professional can assist you in this process to guarantee the relevancy of your estate plan throughout your life. 

In Conclusion

Understanding the importance of a comprehensive estate plan is key to planning for your financial future. With this in mind, and using the key tools outlined in this month’s blog, you can move forward in developing your personalized estate plan, with your unique objectives in mind. 

Are you Interested in learning more about estate planning? Contact a professional financial advisor at The RaeLipskie Partnership to learn more and start estate planning today!

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