Estate Planning – Part I

Your estate is comprised of everything you own: your home, your car, your bank accounts and investments, and your personal belongings.

These are called assets, and the goal of estate planning is to create instructions to distribute which assets to whom you want when you want them to receive it and with the least amount taken away in taxes and legal fees.

An estate plan should also include contingency arrangements in the event that you may not be able to make decisions later on, such as in a medical situation.

Everyone needs an estate plan, not just seniors, retired people, or the wealthy. You need one if you want to have a say in how your family will be looked after if you become disabled or die. Without a plan, the government will make decisions for you and you may not like it.

Estate Planning – The Process

The general objective is to preserve and distribute your assets while reducing tax liabilities and allocating enough funding to meet ongoing needs, such as medical costs or care of dependants.

First, you need to have a full understanding of your current financial status, including all assets that you own and potential sources of funds, such as life insurance or future inheritances.

You will need to identify an executor for your estate – someone who will carry out your wishes on your behalf.

Next, you will need to develop your plan using various tools and then implement your plan. In other words, you will need to set up your assets in a way so that your plan can be executed accordingly.

Finally, keep your estate plan current. This is a live document and should be reviewed every three to five years, or when major life events occur. These include a change in your marital status, the birth of a child, a major change your financial situation, or significant health issues.

As you are preparing your plan, you may consider consulting a professional, such as a lawyer who specializes in wills and estates, who may help to draft the required legal documents.

Stay tuned for Estate Planning - Part II, where we discuss the tools you can use to create your Estate Plan. As always, Get in Touch with OMNI if you have any questions or comments!