Benefits Of Estate Planning

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    30 Nov 2022
      Consider this – you have been able to manage your money successfully throughout your life. Wouldn’t you want to decide what happens to the money, property, and other assets when you are gone?  If your answer is yes – you need strategic and well-formulated estate planning. It means arranging or transferring your assets in the unlikely event of death or incapacitation, to your spouse, children, and relatives.  In simpler terms, estate planning is a structural blueprint that dictates who will inherit your possessions and valuables, therefore, guaranteeing financial security and keeping your legal affairs in order. Whether you are a journeyperson or retired personnel, it is never too early or late to plan your estate. It involves a variety of processes including:
    • Making a will and naming someone to be in charge of carrying out your wishes
    • Determining who will care for your children (if they are minors) 
    • Arranging your assets so that you only pay minimum necessary taxes
    • Putting insurance plans in place to pay bills, support your survivors, transfer assets, and more
    In this blog, we have discussed why a solid estate plan should be arranged:-  Protects your family Protecting your family is paramount and everyone wants to do it in the best possible way. Since stressful and uncertain times are always overwhelming for individuals and families, crucial decisions must be made at the earliest phases of life to protect them from unforeseen situations. A structured estate plan can help secure the financial future of your loved ones and safeguard them from any misfortunes and unwanted inheritors.  Moreover, despite common notions, estate planning isn't just for the ultra-rich, rather it is a highly-recommended process to be carried out by everyone in general.   Ensures the right beneficiaries  When it comes to protecting your assets, you must take the time to decide on the right people. There is nothing worse than seeing your hard-earned assets ending up in the wrong hands. By preparing a will, you can decide how it can be distributed, and who gets what and when. A will is a legal document that gives instructions on how an estate can be handled after death. Therefore, we recommend preparing a well-thought will if you don’t want the court and state laws to take all important decisions for you, leaving you with no right to distribute your assets to the preferred person in the family.  Eliminates probate and court fees Choose and review your beneficiaries  You do not want to be one of the many people who have their estate probated, spending thousands on legal fees. Avoiding probate fees can help your family minimize the added stress of handling the estate alone. Probate is a phase where the court checks whether the will in the name of any executor is valid or not. The entire process can take about 6-18 months to settle and incurs heavy fees on your family. In Canada, the probate fees vary from province to province and are levied based on the size of your estate. For instance, the probate fee for an estate worth 50,000$ is zero in Ontario whereas in British Columbia the fee can go up to 0.6% of the estate value. Therefore, to eliminate these hefty charges and other expenses, preparing a legal will and creating a comprehensive financial plan would undoubtedly be a wise strategy. Support a favorite cause  Make a difference in the world by contributing your legacy to those in need. Donating your estate to charity is one of the best ways to leave a legacy. An estate plan can help you contribute for the greater good, leaving you satiated with a sense of generosity and joy.  Also, voluntary benefactions can be an effective way to minimize estate taxes and the probate process. Your assets will pass directly to the charity of your choice, so you no longer have to worry about selling them or paying off debts.  Saves your family from tax  Taxes can affect your family in many ways. The best way to reduce tax burdens is to make sure your assets are distributed to the next generation as smoothly and efficiently as possible.  Without an estate plan, many factors can come into play, for instance -  If you die without a proper trust and will in place or without any spouse or beneficiary to roll over, you and your family could be subjected to a 50% capital gains tax on the sale of your estate, therefore, decreasing the amount received by beneficiaries.  Let’s understand with an example-  If you have 90,000$ in your RRSP/ RRIF account and no family member is listed as a beneficiary, then the amount will be treated as your income and 50% of the money you own may go straight to the CRA.  At CJCPA, we arrange a well-structured estate plan for you and your family, guiding them to manage and shrink their tax liabilities in a legitimate way. Saves Time and Effort A proper estate plan can significantly help reduce time and effort when dealing with emotional and difficult times. From drafting a will to setting up trusts, everything can be arduous and time-consuming.  With proper compilation and organization of all relevant estate planning documents, one can save their family countless hours of turmoil. To do that, simply save all the records in a single and safe place and inform your family as well as the estate executor about the documents. It is also worth knowing that a well-managed estate plan also avoids the time and expense of a probate process which can take over a year to complete, therefore, saving a substantial amount of time and effort. We, at CJCPA, set up all your records and help you plan your legacy. Take a glance at some important steps toward your estate planning:-
    • Prepare a will, it will let you decide to whom your asset will get passed on
    • Consider trust as it avoids probate
    • Make advanced health care directives 
    • Get an attorney who will look after your finances
    • Assign a guardian to your minor children 
    • Choose and review your beneficiaries 
    • Keep your documents and files in order 
    Conclusion Estate planning can be challenging. From preparing a will to transferring the assets, you may need an expert’s advice. At CJCPA, we ease out the complex procedures of an estate plan through our constant effort and guidance, ensuring financial safety and peace of mind for you and your loved ones. We have a seasoned team of real estate accountants who are highly qualified in providing strategic estate planning solutions to individuals and families, helping them in every step of the way. Contact Us Now for our estate planning and real estate tax services in Canada.
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