“Estate planning is an important and everlasting gift you can give your family. And setting up a smooth inheritance isn’t as hard as you might think.” — Suze Orman

Contrary to popular belief, estate planning is not reserved for affluent families—it’s a tool for anyone hoping to protect what they’ve built over the course of their lives and, more importantly, their loved ones.

The term may seem complicated or intimidating, but really, estate planning is simply a process of arranging how you’d like your assets to be distributed and administered once you’re no longer able to do so. Whether it’s a business, accounts, cash, real estate, or even your favourite painting, an estate helps your assets go where you want them to.

A proper estate plan, like a strong financial plan, should adapt to your circumstances as they evolve. But before you update one, you have to start somewhere. Here are a few ways to get started and how they can relieve your family during a difficult time.

Potential Benefits

  • Minimize taxes or fees

  • Support loved ones

  • Designate guardianship

  • Outline inheritances

  • Avoid family conflict

  • Wealth preservation

  • Business succession

  • Philanthropic giving

Save on Expenses, Pay Your Family

One of the most attractive features of estate planning is the financial benefit it entails. Probate fees vary between provinces, but regardless of the rate, they can eat into the value of your estate and what you can leave behind. Life insurance products, pension plans, RRSPs, and other methods can reduce—or outright eliminate—these fees, leaving more for what matters most.

It's important to keep in mind that death incurs a taxable event known as deemed disposition, which could result in capital gains (or losses) against the estate. Trusts can mitigate these outcomes, but they may not be suited for everyone.

Your Wealth, Your Wishes

Financial benefits aside, estate planning provides agency and peace of mind. It’s effectively the only way for Canadians to dictate exactly how they would like their assets to be distributed after death. Without the proper documents in place, the government decides how everything unfolds, which may strain relationships between family members. If you worked your whole life to build your wealth, it’s only fair that you decide how it’s passed along.

Guardianship for Dependents

Another misconception about estate planning is that it's only important in the later years of life. Life is precious, but also full of uncertainty. For families with young children, tragedy can leave a dependent without their parents. If a formal will isn’t available, the court system decides where they end up. Estate planning, however, allows parents to appoint a legal guardian as a precaution. It may be difficult to think about, but parenting rarely is.

Insuring Against Incapacity

Similarly, the reality of incapacity is that, by the time it occurs, there isn’t much that can be done about it. Whether due to an accident or medical emergency, individuals can be rendered incapable of making sound decisions at any point in their lives. Naming a power of attorney in your earlier years may be intimidating, but it serves to protect you as well as your wealth by granting them the ability to make decisions on your behalf if you are incapable of doing so.

Let’s Restate the Obvious

This document was never intended to be an exhaustive list of all the benefits that estate planning can provide. It’s a conversation starter, a thought provoker, and a jumping-off point. Each estate plan is entirely unique to the individual and those they value most.

But here’s the one aspect that applies to everyone equally: it may eventually be too late to plan for the future, but it’s never too early to start. Take this to your Family Wealth Advisor, ask questions, and find answers about how you can leave behind a legacy that lasts for generations, not just years.

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© Bellwether Investment Management Inc. 2024. This communication is intended for residents of the provinces in which we are registered and is not meant to be a solicitation to any persons not resident in those provinces. Any opinions expressed in this article are just that, and are not guarantees of any future performance or returns. Some of the information contained in this article has been drawn from sources believed to be reliable but due to the fact that it is provided by a third party, it cannot be guaranteed to be accurate or complete. Bellwether Investment Management Inc., Bellwether Estate and Insurance Services Inc. and Bellwether Family Wealth cannot provide tax advice and therefore we recommend that you consult your tax advisor for further assistance with your tax planning and the preparation of your tax return. The report is prepared for general informational purposes only and the securities mentioned in this report should not be construed as a recommendation for any specific securities.

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