Do you want your family to be the main beneficiary of your accumulated assets?
If you have not done some planning during your lifetime, the government may become a large beneficiary of your assets, and your estate may have to pay substantial legal fees to accountants and lawyers.
Are you prepared to have up to 40 to 50 per cent of your accumulated assets paid to CRA, probate fees and legal fees?
Are these the same assets you assumed would go to your family and named beneficiaries?
We spend a lifetime of accumulating assets.
If the average age of death is in our 80s, we spend 60 years as adults, accumulating assets and wealth. This is usually done with hard work and living within our financial means.
Ensure you know the options available. There are rules or consequences that happen with proper planning or no planning.
There are two distinct types of ownership.
The most common one is joint owners with right of survivorship.
The second type of ownership is tenancy in common.
For couples, joint ownership with right of survivorship will result in the assets flowing to the survivor.
It is a strategy used by the majority of married couples; this type of ownership can pertain to bank accounts, vehicles, investment accounts and property.
Joint tenancy can meet estate planning goals to simplify the administration of an estate, minimize probate fees and ensures your assets pass to the intended person.
Right of survivorship ensures when the first spouse dies, assets pass to the surviving spouse without being subject to the delays and expense of an application for probate.
Tenants in common ownership are where two or more persons acquire an interest in a property.
In the event of death, their interest becomes part of their estate.
This type of ownership may be considered in a blended family situation.
A father or mother may want their portion of the family home transferred upon passing to his or her children, and not be transferred upon death to a new spouse.
If you own property with another person as tenants in common, on your death your interest in the property becomes part of your estate and is passed on according to your will.
The home is then typically sold so the estate can be settled.
Pre-planning ensures the transfer of accumulated assets upon death.
Most estates using joint ownership with right of survorship can avoid probate on the death of the first spouse.
There may also be additional options to reduce or avoid probate on the death of a surviving parent.
When a client dies, his or her family is forced to assume the responsibility of settling the estate in addition to the personal grief the family is going through.
If you are having difficulty with planning during your lifetime, family members are faced with additional planning decisions after you are gone.
Take the time to seek professional legal advice during your lifetime. Ask your certified financial advisor to provide their expertise on estate planning.
Show your family some love now and in the future. Embrace pre-planning.
Doreen Smith is a certified financial planner with Capri Wealth Management.