What is Estate Planning?

  • It is the planning process of organizing a tax efficient transfer of your assets to family members, specific people or charities.
  • Your estate plan will determine who should receive assets, and when proceeds of your estate should be distributed.
  • Any other financial or contractual obligations
  • If you own a business, your estate plan could also plan for the orderly succession of your business.
  • The estate plan allows for Post Mortem planning and tax minimization strategies.
  • Your estate plan should be integrated with your financial, retirement and business plans. If you own property or assets in another province or country, consideration should be given to reflect different laws and taxation that will apply.
  • Your estate plan will need to be reviewed over time as your personal and business circumstances change. Your plan should be kept as current and up to date as possible in order that it remains relevant.

Why should I consider Estate Planning?

Your estate plan is based on your rational and emotional motivations. It is done out of care, concern and generosity towards your family. It can be a method of providing meaning to the material wealth that a successful career has provided. It can also enhance opportunities for family or employees who will continue to benefit from years of accomplishment in your family business.

If you answer yes to any of the following questions, an estate plan will give you comfort knowing your affairs and family members are taken care of.

Are you concerned about?

  • Avoiding conflict, uncertainty, or possible litigation regarding your estate?
  • Making sure that your estate has adequate funds to pay taxes that will arise on your death?
  • Minimizing taxes in order that your beneficiary receive a larger share?
  • Paying any creditors at the time of death?

Would you want to…

  • Know that your estate will be distributed according to your wishes?
  • Minimize stress to family members by looking after your affairs in advance?
  • Provide security for your employees?
  • Continue supporting charitable works that are important to you?
  • Ensure you have adequate funding to pay any tax arising from your death?

Estate & Succession Planning

Your estate plan includes all of your business and personal assets. A succession plan will only deal with your business assets. An estate plan is set in motion upon your death. A succession plan may take effect upon retirement or the sale of your business.

As a business owner, it is prudent to plan an exit strategy or a succession plan that will provide for the transfer of your business upon death, disability or retirement. Your succession plan should include:

  • A management transition for your business
  • An ownership transition for your business
  • A contingency plan in the event of a disability or untimely death.

Questionnaire – Is Your Estate Plan up to Date?

Wills & Power of Attorney:

  • Do you have a Will? Yes / No
  • Do you have an Enduring Power of Attorney? Yes / No
  • Do you have a Personal Directive? Yes / No
  • If you have property in another province/country have you considered a Will in that jurisdiction? Yes / No

Financial Planning:

  • Have you determined the income needs of family members dependent on you? Yes / No
  • Have you considered steps to implement post-mortem planning for income splitting? Yes / No

Business Planning:

  • Do you have a Buy-Sell or Shareholders Agreement in place? Yes / No
  • Is your Buy-Sell Agreement funded with Life and Critical Illness Insurance? Yes / No
  • Does your Estate Plan address creditor issues? Yes / No
  • Do you have a contingency plan in the event you are disabled or die before transferring your ownership interest? Yes / No
  • Have you selected a successor or established a process for selecting a succession for your business? Yes / No
  • Do you have a written plan for the transfer of your business? Yes / No
  • If a family member will be taking over your business, have you made arrangements to treat other family members equally? Yes / No

Advanced Planning:

  • Have you identified whether the status of your operating or holding company shares are eligible for the ____________lifetime capital gains exemption? Yes / No
  • Have you considered transferring the future growth of your business to someone else? (An Estate Freeze) Yes / No
  • Have you considered the use of a capital gains rollover to your spouse, deferring taxes payable on your death? Yes / No
  • Have you investigated any tax liability your estate will have to pay? Yes / No
  • Will your estate have enough cash to pay any tax liabilities? Yes / No
  • Have you investigated strategies to reduce probate fees on the value of your estate? Yes / No
  • Have you planned for any charitable gifting using your estate? Yes / No
  • Have any agreements that form part of your estate plan been reviewed in the last year? Yes / No
  • Have you shared details of your estate plan with family members? Yes / No
  • Does your family know the location of your Will, Life Insurance and other important documents relating to your estate plan? Yes / No
  • Is your family aware of funeral and organ donation wishes? Yes / No

Consider Life Insurance:

Insurance coverage can form an important corner stone in any planning during your life time and upon death.  Life Insurance guarantees tax free capital at the time it is most needed.

  • Protect your business against loss caused by death of key employees or yourself.
  • Use Life Insurance to fund your shareholders agreement.
  • Life Insurance can be used to create or equalize a legacy for family members.
  • Life Insurance can be used to cover capital gains taxes upon your death.
  • Use of joint last to die insurance coverage is one of the most cost effective ways to pay capital gains or estate taxes.
  • Life Insurance can be used to fund charitable giving by designating the charity as a beneficiary of a policy on your life.