Estate Planning: The Basics
What is your Estate?
Your estate is comprised of everything owned by you.
What is Estate Planning?
Estate Planning is the process of establishing a plan for the management and distribution of your assets after your death. It also includes the decision as to who to select as estate executor, an important decision indeed as you will want to ensure that your estate plan is properly carried out.
Effective Estate Planning results in the passing of the estate assets to the intended beneficiaries in the most tax efficient manner possible. The benefit derived from an estate plan which minimizes tax payable upon death is that the beneficiaries will not be put to great expense in order to take ownership of the assets left to them. This in turn will mean that a beneficiary will not have to part with an estate asset immediately after receiving it in order to service the debt incurred in paying the tax levied in receiving ownership of the asset gifted to him or her in the first place.
Three General Categories Of Assets Forming The Estate
1. Joint held assets with right of survivorship
2. Registered assets which allow for the designation of a beneficiary
3. Individually owned assets
Basic Documents Of The Estate Plan
2. Power of Attorney for Property
3. Power of Attorney for Personal Care
Importance of Estate Planning
The importance of Estate Planning cannot be understated. In order to make sure that your assets, which comprise both your personal and real property, are passed to your beneficiaries according to your wishes, you must have an Estate Plan. Absent an Estate Plan, your family may face the prospect of lengthy legal proceedings and the considerable expense associated with such proceedings before family owned assets are passed to them. Almost as troubling for most people is the fact that, absent an Estate Plan, it is the government of Ontario, through Ontario legislation, that decides the distribution of one’s estate assets.
Disclaimer: This article provides general information only and is not intended, nor is it to be relied upon as a substitute to obtaining legal advice.