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Cash value is a type of life insurance policy that lasts for the lifetime of the policyholder. This type of life insurance also has a cash value savings component that the policyholder can use for different purposes such as loans or cash to pay policy premiums. Some other distinctive features of a cash value life insurance are that it is known to be more expensive than term life insurance and does not expire after a number of years. To simplify further, the cash value is the sum of money that accumulates in a cash-generating permanent life insurance policy or annuity which is held in your bank account. Your insurance provider allocates some of the money you pay as premiums to investments portfolios such as stocks and bonds and then credits your policy based on the performance of those investments.

How Does Cash Value Work?

Cash value is a type of permanent life insurance that provides insurance cover for the policyholder’s life. Most cash-value life insurance policies require a fixed-level premium payment. A part of it is allocated to the cost of insurance and the remaining is deposited into a cash-value account and invested in different financial investment portfolios. It earns a tax-deferred modest rate of interest. This ensures that the cash value of your life insurance increases steadily over time. The implication of this is that as the cash value increases, the risk of the insurance provider decreases because the accumulated cash value offsets part of the insurance provider’s liability. You can also use the earnings to increase the death benefits in your policy or other living benefits, depending on your preference. Bear in mind that as you make withdrawals from the cash value in your insurance policy, the death benefit will also reduce.

Example

Assume you have a life insurance policy with a $35,000 death benefit with no outstanding loan or prior cash withdrawals. The accumulated cash value of the policy is $10,000. Upon your demise, the insurance provider will pay the full death benefit of $35,000 but the money accumulated into the cash value becomes the property of the insurer. The implication of this is that because of the cash value of $10,000, the real liability cost of the insurance provider is $25,000. This is calculated by subtracting the death benefit from the accumulated cash value ($35,000 – $10,000).

Types of Cash Value Life Insurance

Cash value insurance is usually used to augment your life insurance policy. However, you need to understand how it works for each type of life insurance policy.

Whole Life Insurance

If you have a whole life insurance policy, having a cash value policy will augment your life insurance policy. When you take a cash value insurance policy, your premium stays the same for the rest of your life. A small percentage of your premium is diverted into a savings account to accumulate interest. The rate of interest returns varies depending on the insurance provider, but it is known to hover around 2%. You have access to the funds in the savings account during your lifetime.   

Variable Life Insurance

This is slightly different from the whole life insurance policy. With this policy, you can determine how your accumulated cash is invested. You have the opportunity to invest the small portion diverted from your premium into investment portfolios such as bonds and stocks. This requires a good knowledge of the investment market. Variable cash value life insurance has a higher premium than the whole and universal cash value life insurance.    

Universal Life Insurance

Under universal life insurance, you have a bit of control over what you pay as your premium. For example, you can pay more than you usually pay for a premium and you can divert the surplus into your savings account. The advantage of this type of policy is that if you cannot meet up with the premium payment in a particular month, you can use the money in your savings account to pay your monthly premium. There are three types of Universal Life Insurance: Guaranteed Universal Life Insurance, Variable Universal Life Insurance, and Indexed Universal Insurance.

Advantages of Cash Value Life Insurance Policy

• You can earn interest on a cash value savings account
• You can overpay on your premium and divert more money into your cash value account
• You can spend from your cash value account while you are alive
• You can earn returns on a cash value investment account

Disadvantages of Cash Value Life Insurance Policy

• Your returns are capped at a certain amount
• If you remove money from your cash-value account, your death benefit decreases
• You have to pay fees associated with your cash-value account

Tax Advantages

There are various tax benefits you and your beneficiaries enjoy with a cash value insurance policy. One of the benefits is that your beneficiaries can receive your death benefits tax-free. This is an advantage your beneficiaries get to enjoy with your cash value life insurance policy. Another tax advantage is that the earnings on your invested accumulated cash value are tax-deferred. Therefore, as your cash value grows, you do not need to worry about the CRA deducting from your earnings. One of the things you can use your accumulated cash value for is collateral for loans. When you borrow money against your policy, you do not have to worry about paying taxes on the loan as long as the policy is still active. However, if you withdraw your accumulated cash value or take the surrender value and terminate the policy, you may be taxed on the portion of the money that came from interest or investment gains on your invested cash value.  You should understand the tax rules before making withdrawals from your cash value policy.

Bottom Line

There are other minor considerations and questions you may have when considering this approach. Talk to us about your options.

By: Louai Bibi, Advisor Associate

You’ll likely have heard about the concept of a family trust through a movie or TV show. If this is the case, you’ll likely assume that there is a direct correlation between having a family trust and being ultra wealthy.

This isn’t always the case and family trusts can be a huge help to the average Canadian family, but trusts are complex and requires advice from your tax/legal/financial planning team.

Here is an example where a family trust can be helpful:

John has two children from a previous marriage. John later marries Jane, who has two children from a previous marriage as well. John owns a cottage which he & Jane, as well as the four children love to visit. If John were to leave the cottage to Jane in his will, she may or may not let John’s kids have access to the cottage after his death or worse, when Jane dies, she very well may pass the cottage on to her own children through her will, which leaves John’s children out of the equation and likely conflicts with John’s wishes.

If John were to have set up a family trust that owned the cottage, he could have stipulated in the trust agreement that Jane & her children, as well as his own could have all enjoyed the cottage during their lifetime (following his death) but when Jane were to pass, the cottage would be willed to John’s children.

This doesn’t just apply to cottages or vacation properties either. John could have had a child with a disability who can’t handle their financial affairs and wanted the inheritance John leaves to this child to be paid over their lifetime, as opposed to a lump sum. There could even be a family member who would have blown through their inheritance during a weekend in Vegas, and a trust could allow this individual to receive their inheritance in chunks or once achieving a major milestone to mitigate this risk.

For the purpose of this blog – I won’t be addressing the tax benefits or consequences too deeply. After all, the most qualified person who can speak to this is your trusted accountant.

There are some great tax advantages to using a trust:

• Possibly reducing taxes at death.
• For business owners – multiplying the capital gains exemption.
• Income splitting opportunities with lower income earning beneficiaries.

There are also some disadvantages to using a trust that can sometimes outweigh the advantages:

• Cost of setting up a trust and annual tax returns are required.
• Attribution rules can be complicated and may make it difficult to shift income to lower-income beneficiaries.
• Likely not an ideal solution for US citizens and/or taxpayers.
• Trusts are taxed at the highest personal marginal tax rate.

All that to say, the decision to implement a trust is not one that should be rushed and should entail detailed discussions with your tax/legal/financial planning professionals as to how this strategy fulfills your goals and mitigates unnecessary cost, complexity, tax, and risk. Here is a link to a great article by BDO that uses an example of gifting a cottage from parents to children and the options available to them.

This process starts with some self-reflection. What does my legacy look like? Who receives my assets at death, what does my family dynamic look like and how can I structure this in a way that results in the least heartache, complexity and possibly reduces my taxes owing? Sometimes a trust fills that gap and sometimes it doesn’t. Once you’ve had some time to reflect on these items, you can directly book yourself into one of our calendars here to continue this conversation.

Having a proper estate plan in place will ensure that your loved ones are protected if you were to pass away. As soon as you have any assets or property it is time to contact your team of professionals to discuss what would happen to those assets if you were not here anymore.  Neglecting to do so can end up costing your estate or loved ones in the form of probate costs and potential legal battles. Unfortunately, many people think that they can skip the estate planning process and that it doesn’t apply to them. Below are three of the most common misconceptions about estate planning.

What You Need to Know

1. Estate Planning is for Older People: While it is true that older people are more likely to be in need of a solid estate plan due to wealth accumulation and age, there is no right age to start the process. The reality is that it is not uncommon for people to die too early and it is a disservice to your family to not acknowledge this fact. A good rule of thumb is to put an estate plan in place as soon as you have someone who depends on you. Marriage and having children are two major life events that might come to mind.
2. Estate Planning is Only for the Wealthy: Estate planning is important no matter what the value of your assets are. In fact, the less that you have the more strain your family may feel when you are no longer around. Estate planning can include distributing your assets but it also involves leaving an income for your family in the form of insurance planning. Having a plan in place will give you the peace of mind that your family will be cared for financially.
3. A Will is All You Need: While a will is a good foundation, a good estate plan should include so much more. Wills, power of attorney, health care directives, insurance, business succession planning, tax planning, trusts… the list goes on! A will outlines where your assets will go, but it doesn’t necessarily specify how they are going to get there. Transferring assets smoothly takes extensive planning, but your heirs will thank you for it after you are gone.

The Bottom Line

The best time to start considering an estate plan is right now! You should be prepared for the unexpected no matter your age or the value of your assets. Talk to your advisor about different strategies you can use with your investments and insurance to ensure that your assets are as organized as possible and can pass smoothly to your family.

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While uncomfortable to think about, effectively planning ahead for when you are no longer here can save your loved ones a great deal of time, money, and emotional hardship.  Estate planning can be complicated, but there are some basic “must-do’s” that should be regularly updated and reviewed. Below is a simple checklist for making sure your estate plan is up to date.

What You Need to Know

Wills

• Have you created a will?
• Is it updated and current?
• Have you experienced any major life changes since the will was created? This could be a new marriage, divorce, child, death in the family, etc.

Wills should be created with the guidance of an estate lawyer to ensure that your final wishes are correctly documented and carried out. It is vital that a will be regularly updated as it acts as the foundation of your estate plan.

Beneficiaries

• Do all your registered investments have a named beneficiary? This includes RRSP, RDSP, RESP, TFSA, Pension Plans, and Segregated Funds.
• Do all your life insurance policies have a named beneficiary?
• Have you recently reviewed your beneficiaries? Has there been a major life changes such as a marriage or divorce that could warrant a change to your beneficiary appointment?

Beneficiary designations allow for assets to bypass probate (in most cases) and be passed directly to your beneficiary. This is a great money and time saver.

Dependents

• Do you have a family member that you wish to provide an income to after your death?
• Do you have family members that you wish to fund an education for after your death?
• Do you have any family members that have special psychological or physical needs that you would like to provide financial support for?
• Do you have a parent or other relative that you wish to ensure is taken care of financially if you die prematurely?

There are a variety of different financial and legal tools available to Canadians that can help them provide income or support for their dependents when they are gone. Keeping your dependents updated in your will is important as they may change throughout your lifetime.

Executors

• Have you named an Executor of your will?
• Is the Executor up to date? Have you named an alternate Executor in the event your first choice is unable to fulfill the position?
• Has your Executor been made aware of their appointment and been briefed on your final wishes?

An Executor is someone you appoint in your will that will be responsible for administering your estate. An Executor should be someone you trust and also someone who is capable of dealing with the potentially complex responsibilities involved with administering an estate.

Powers of Attorney

• Have you appointed a Power of Attorney for Property? This person will be able to help you with your finances and personal property in the event you are unable to do so yourself.
• Have you appointed a Power of Attorney for Personal Care (Health)?  This person will be responsible for making medical and personal care decisions for you if you become unable to act on your own.
• Are you POA’s aware of their appointment and willing/capable to perform the tasks that will be required of them?

Power of Attorney is a legal document that allows you to appoint someone to help you with your finances and personal care in the event that you feel unable to do so or become mentally incapable.

Financial Planning

• Have you spoken to your financial advisor about structuring your assets in the most tax efficient way to minimize estate taxes and probate fees?
• Have you set aside enough money to cover final expenses, estate taxes, probate fees, and funeral arrangements?
• If you own a business, have you worked with your professional team of advisors to develop a succession plan?
• Have you recently taken the time to calculate your final expenses and potential estate taxes?
• Have you addressed any permanent insurance needs you may have?
• Have you spoken to your advisor about your wishes to make a charitable donation before/after your death?

Your financial advisor will play a significant role in helping you prepare your estate. The above questions are only some of the issues that you may want to bring up to your financial advisor so that they can help you make your estate as efficient as possible.

Your Personal Financial Inventory

Prepare an Inventory of Assets and Liabilities

• Real Estate
• Investments
• Bank Accounts
• Annuities/Life Insurance
• Personal Property (Art, Jewelry etc.)
• Pensions
• Value of Any Businesses You Own and Their Structure
• Digital Assets

Make Sure You Indicate the Location of the Following

• Will and Power of Attorney
• Birth and Marriage Certificates
• Divorce/Separation Agreements
• Insurance Policies
• Deeds
• Safety Deposit Box
• Preplanned Funeral Arrangements
• Trust Documents
• Names and Contact of Personal Advisors (lawyers, accountants, financial planners)
• Executors, liquidators, and trustees

Far too often family members are left scrambling to find important documents and information. Your financial advisor and lawyer can help you collect the above information and organize it for your beneficiaries and executors.

The Bottom Line

Estate planning has a reputation for being complicated, but for most people all it takes is some thoughtful pre-planning. Working with a lawyer and financial professional will ensure all of your bases are covered and your final wishes are carried out. Estate plans should be reviewed and updated regularly.

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There will come a time when you may be incapacitated or leave your loved ones behind. When either of these happens, you do not want to leave your loved ones in limbo about what to do or what will happen to your assets and properties. Proper estate planning is a way of avoiding this. An Estate Plan takes care of your assets and properties when you can no longer do so. All financial and medical decisions are usually contained in an Estate Plan.

Who Should Inherit Your Wealth?

This is a decision you have to make sooner or later in your estate plan. That is why it is always available to update your estate plan every now and then, preferably every 3 to 5 years. The truth of the matter is when it comes to sharing your assets and properties amongst your loved ones, it is almost impossible to make everyone happy with what you bequeath them. The best you can do is make sure everyone you want, gets something, whether or not they are satisfied may be beyond what you can control. You can also make sure your immediate family gets more share than extended family members and friends in that order. You should also try as much as possible to ensure that your children get equal shares of your estate.

However, equal doesn’t always mean fair. A lot of family disputes over inheritance arise due to the fact the testator does not bequeath his or her assets and properties to the children in an equal manner. There will be strife and division amongst your children. It may even disrupt the probate process. Your children may decide to challenge your Will. No one wants animosity among their children when they’re gone. You can seek the advice of an estate lawyer to properly advise you on how to go about it and how to prepare for such happening in your estate plan. Most times it is advisable to sit your children down and explain why you have decided to share your estate unequally among them. Explaining your rationale may help prevent potential strife and animosity. However, if you know the child with the greater share may be bullied, then it is best to keep it to yourself.

How To Legally Donate Your Wealth to A Charity Without It Being Contested by Your Relatives

Donating your wealth to charity is a normal thing done by people. However, it is not without its issues, especially when family members feel entitled to your wealth more than the less privileged. The first step to avoiding this is engaging the services of a lawyer to make your estate inaccessible to your loved ones after your demise. It is your wish, so you have the right to make it, whether it is acceptable to your loved ones is another issue entirely. When your loved ones disagree with your bequest, it affects the probate process as they may decide to challenge it. Challenging your Will means they have to prove that you were not of sound mind when bequeathing your estate to charity. Therefore, you should ensure you follow all legal requirements of estate planning in your province and territory. It is advisable to go the way of using a Trustee to manage and disburse the funds to charity. Using a Trustee restricts the charity fund to existing on paper only. It will also be difficult for your loved ones to challenge because the charity funds are managed by a third party who is not a family member. You can also set up a foundation that will draw money from an alternative source in your estate plan. This also takes is beyond the reach of your loved ones.

How To Keep Family Members from Suing Your Estate and Getting Your Wealth by Way of Court Order.

The wishes in an Estate Plan are usually a subject of dispute among family members who got along fine before your death. This is sometimes not totally your fault. You can blame it on human nature. However, if your Estate Plan was not legally made, it can be contested by any family member which may lead to your wishes not being carried. To avoid this, you have to make your Estate Plan lawsuit-proof. Here are some tips on making that happen:

Go For a Trust Rather Than a Will

When you create a Trust, it does not go through the process of probate which usually involves the Courts. This limits the chances of it being contested by unsatisfied family members. The Trustee will be in charge of managing your Estate instead of an individual.

Go For a Corporate Executor

It is tempting using a family member as an executor, especially when you are sure there would not be any form of rancour regarding your assets. If you decide to go for a Will instead of a Trust, using a family member as your executor may give rise to hate against such a person or an abuse of power by such a person. A corporate executor will be a neutral executor and it is less likely to be an issue amongst family members.

Make Sure You Are of Sound Mind and There Is No Undue Influence

This is a legal requirement that makes your Will lawsuit-proof. If you make a bequeathal that does not go down well with a family member and it is established that you were not of sound mind when making the Will, it could render it void. You may wish to do both physical and mental evaluation before signing the Will. The same goes for undue influence. Ensure that you make your Will of your own free will.

Do Not Forget The “No Contest” Clause

The “in terrorem” clause as it is known is a perfectly legal clause that states that any family member who tries to contest the Will forfeits his or her inheritance. However, you should leave something reasonable for the people you know are likely to contest the Will for this clause to work.

Make Provisions for Disinheritance

If you are not bequeathing anything to a family member, it is advisable to state in your Will that you are not bequeathing any asset to such person. You can also leave a letter or memorandum detailing your rationale for the disinheritance. However, be careful of stating the reason for disinheriting the person, especially if the reason can be said to be against public policy. Each province and territory have their governing laws when it comes to disinheritance. However, note that you cannot disinherit your minor children and your spouse, except there is a binding Prenuptial Agreement.

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Probate is the process of getting your will approved by the courts. This process validates your will and allows your executors to distribute your assets.  However, probate can often be an expensive and long process. Each province has probate fees which can end up being quite substantial on a big estate. Probate can also cause serious delays in the distribution of assets from the will because once a will is probated it becomes public record. This means that it can be contested and potentially delayed while the courts settle any disputes. The good news is that with proper planning, it is possible to minimize or even eliminate the number of assets that have to go through probate.

What You Need to Know

There are a number of planning strategies that can be used to bypass or minimize probate. Below are some common strategies to make your estate as efficient as possible.

1. Beneficiary Designation on Registered Assets – RRSP, RPP, TFSA, RRIF, LIF, and LIRA are all considered to be registered assets. This means that the CRA allows for a direct beneficiary designation. If there is a spouse, they are entitled to roll registered accounts into their own names. If there is no spouse, then the investor can name an alternative person to leave the money to that they designate directly on the investment account. Money left to a beneficiary bypasses probate and passes directly to the appointed person.
2. Designating a Beneficiary on Non-Registered Assets – Typically, non-registered assets do not allow a beneficiary designation and automatically go to your estate to be probated. Segregated funds can be used to designate a beneficiary on non-registered assets.  Segregated funds are a life insurance product that are solely sold by life insurance companies. While the MER’s can be a little higher on segregated funds, they offer many of the same investment options that some mutual fund companies offer. Therefore, if non-registered money is invested in a segregated fund, they too will pass probate.
3. Trusts – Any assets left to someone in trust automatically bypass probate.  There are a variety of trusts that are all used for different reasons. Trusts can be more complex than the options listed above, but they can be a very effective planning strategy that allows you to assign a trustee to manage the money.  However, it’s important to note that setting up a trust can be expensive. If avoiding probate is the sole reason for the trust, then it may be prudent to add up the costs of each to see which makes more sense.

The Bottom Line

Probate costs and hold up can be minimized with proper planning and guidance from a professional.  It is important to note that on registered and investments and segregated funds without a named beneficiary, the assets automatically go to the estate. This means they would be subject to probate.  It is a good idea to review your beneficiary designations regularly to make sure they are up to date.

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Many people may worry as they get older about what will happen if they are no longer able to manage their finances and personal property. It can be a good idea to be proactive in planning ahead for a time when you may need help managing your affairs. One option available to Canadians to address this financial planning concern is appointing a Power of Attorney.

What You Need to Know

What Is a Power of Attorney?

Power of Attorney (POA) is a legal document that gives one or more persons the authority to manage your finances on your behalf. Once a person is appointed POA, they have the same decision-making abilities over your finances and property as you do. This includes bank accounts, investments, bills, real estate etc.  It’s important to understand that this does not mean they now own the property, only that they can make decisions regarding it. POA is limited, however, and they do not have the authority to make or change your will, change beneficiaries, or appoint a new POA. You have the ability to outline how the power of attorney can act. For example; you can limit them to having decision making abilities over only one piece of property.

It is possible to appoint more than one person as power of attorney. The acting POA’s can be required to make decisions together, or have the ability to act separately. This is something that is outlined in the power of attorney document. Unless you become mentally incapable you still maintain the same control over your finances and property.

Types of Power of Attorney?

There are two types of power of attorney when dealing with finances and property:

1. General Power of Attorney – General POA gives someone the authority to make decisions over some or all of your property on your behalf. General POA only has this authority when you are mentally capable of managing your own affairs. POA ends immediately if you become incapable. Power of Attorney can come into effect when you assign them or on a specified date.
2. Enduring/Continuing Power of Attorney – Enduring POA allows for the appointed attorney to have decision making power over your property when you are mentally incapable.

Choosing an Attorney

The person you assign as power of attorney should be someone you trust completely. This person could be a spouse, sibling, child, or other friend/relative. The minimum legal age for a POA varies from province to province. It is recommended to assign a substitute POA in the event your first choice is unable or unwilling to assume the role. It is important to note that in some provinces, POA’s are entitled to be paid unless otherwise specified in the document. Power of Attorneys must be able to manage your money in your best interest and keep detailed records on the decisions they make on your behalf.  Below are a few questions to ask yourself about the person you are considering appointing:

• Does this individual have experience managing money and property? Do they do a good job of managing their own affairs?
• Do you know this person well enough to feel that you can trust them?
• Do they have any personal issues that may interfere with their ability to act in your best interest?
• Does the individual understand what will be expected of them as your attorney?
• Does this person have the time to manage your money or property as well as their own?
• Is this person nearby and readily available to assume this role? Having someone that lives far away from you may cause issues.
• Has this person willingly accepted their appointment as attorney?

Benefits and Risks

Benefits:

• Makes it clear to family and friends who will be responsible for your money.
• POA’s must manage your money for your benefit and can be required to account how he/she manages it.
• Your Power of Attorney document can be as general or specific as you want giving you great flexibility over what assets your attorney would have control of.
• The ability to have multiple attorneys can limit the possibility of someone taking advantage of you.

Risks:

• Can lead to mismanagement of your money if your POA turns out to be untrustworthy.
• Sometimes people limit the abilities of the POA to the point that it makes it difficult for the POA to fully take care of your finances.
• Appointing two or more POA’s can come with certain challenges. If the POA’s are required to act jointly then it is possible that they will not agree on certain decisions.
• If your Power of Attorney is not up to date, it is possible that the person you appointed may be currently unsuitable for the role.

The Bottom Line

Appointing a Power of Attorney can be a good option for many people and gives them the peace of mind that someone will be able to help them with their money if there is ever a need for it. When appointing a Power of Attorney, it is important to work with a lawyer who can fully explain the legal document to both you and your attorney. You should never feel pressured by a relative or friend to sign a Power of Attorney.

It is also important to note that a Power of Attorney for Property is not the same document as a Power of Attorney for Personal Care. A POA for property will have no authority to make decisions regarding your personal care.  These are two separate legal appointments and they are not interchangeable.

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Building a home is not for the faint-hearted. A lot of sacrifices and planning are required, especially on the financial side. You do not want to bring your children into the world without proper financial plans. It is even advisable to start planning for kids long before they come. Before having children, you should try as much as possible to settle all debts, budget for child care and support, and apply for tax breaks and other benefits that may be available for children. A lot of questions pop up when trying to plan for your kids and with enough research, you can get adequate answers. We would try as much as possible to answer some of these questions for you.

How Much Insurance Should You Carry On Your Life Once You Have A Family?

When it comes to the type of insurance you should do once you have a family, experts advise that your coverage should be 7 to 10 times your annual income for adequate cover for your family. Surveys show that 74% of Canadians have a life insurance policy but 70% majority are worried that their life insurance is not adequate to take care of their family in the event of their death. Determining what will be considered as enough for life insurance is almost an impossible task because families differ but there is a general formula you can use. This formula is known as DIME – Debts, Income, Mortgage, and Education. DIME is the total sum of:

• All your current and future debts;
• The multiplication of the number of years your family will need your income with your current annual income;
• What you owe on your mortgage and any expense on renovation or expansion; and
• How much will cost to send your kids to school up until the level you wish.

What you want in your life insurance cover depends on what you want to leave behind for them. Life insurance is not for you but your family.

 Do You Need A Living Will?

A living Will, also known as Personal/Advance Directive is a document that contains your preference and wishes for your personal and medical needs for when you are unable to make such decisions. The document takes care of your end-of-life affairs whilst still alive. You need a living Will to take care of things for when you can’t make key decisions. It also spares your family from making difficult decisions in your absence. A living Will protects you and your family, just like insurance. Anything could happen at any time, it could be a ski accident, stroke, or bike crash that may incapacitate you, with a living Will in place, you are still in control of your life. A living Will must include who to make medical and financial decisions on your behalf, the level of their authority, your medical wishes, and the welfare of your family if you are incapacitated. Ensure you find out the laws that govern a living Will in your province.

How Early Do You Need To Begin Estate Planning To Ensure That Your Child Is Given Your Inheritance?

Estate planning is an important decision you need to make so as to adequately provide for your family. It is a detailed plan on how you want your assets to be distributed when you depart. It has its tax benefits, and it helps you structure and manages your finances both when you are alive and after you are gone. You can engage the services of a lawyer or use estate planning kits, apps, and websites with estate planning templates. If you choose the latter, it is advisable to give a lawyer to review for you. Estate planning involves documents like a Will, power of attorney, and a living Will. which is why you may need to consult, lawyers, tax experts, and financial planners when you want to come up with an estate plan.

There is no rule of thumb that states the exact time you should start your estate plan. Experts will say once you cross the threshold of being a minor, you can start your estate planning while some people choose to come up with an estate plan when they clock 40 or are diagnosed with a terminal disease. This means that you could start as early as when you clock 18 or when you are close to the great beyond of which you must still have the legal capacity to come up with an estate plan. it does not really matter when you begin your estate planning as long as you meet the legal requirements of making and your plans and wishes are clearly articulated. You should also make sure you update your estate plan every 3 to five years.

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