Money Management Newsletter: Taxes
and Estate Matters
Ten estate planning tips
1. Make sure you plan and discuss with your family or
professional advisors how you want your estate
to be distributed; don't keep everybody in the dark until the end.
2. Draw up a will. Dying "Intestate"
(without a will) increases costs, takes away control of your family's
assets and adds stress for your family.
3. Keep all your valuable papers together such as insurance
policies, wills, bonds, investment records, birth certificates, marriage
certificates and social insurance numbers. Be sure your family knows where
they are; don't leave a game of "hide & seek".
4. Review your life insurance and keep your program
up to date. It is the most cost effective way to create the cash to pay
bills and provide income.
5. If you have insurance, consider a named beneficiary
if it is appropriate. If you name your estate it could slow down receipt
of monies to pay bills and provide income. Having the proceeds paid to
the estate increases executor's fees and gives one more opportunity for
the proceeds to go to the wrong people.
6. Explore leaving property and investments as "Joint
with rights of survivorship" so ownership can be changed with
the least cost, "red tape" and time delay.
7. Name a beneficiary in your RRSP
or put an RRSP-RRIF clause in your will. This eliminates the possibility
of the biggest tax bill possible. The total value of your RRSP/RRIF could
be added to income and taxed at probably the highest rate and therefore
reduce income to survivors. A "spousal beneficiary" defers the
8. Keep some of the assets "liquid"
so that there is cash to pay bills upon death. If not, this takes away
the flexibility to preserve the value of the estate and to avoid a forced
sale of assets.
9. Suggest to your potential survivors that they seek
advice and do postmortem tax planning. If you've done a good job of crating
your estate, your family will need competent advisors to help manage the
10. Annually, fill out a Net Worth Statement showing
a detailed list of what your assets are, where they are and their current
value. Do an Income Statement showing all current income sources, but
also a list of the type of income and amounts which continue after death.
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