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What is estate planning and why is it important?

Estate planning is not just for the wealthy; it’s for everybody. The key is to plan for tomorrow today so you can retain more of your assets and leave a lasting legacy for your family and designated beneficiaries.
Angeline De Vera, from KZEL Law’s Prince Rupert location. Working with a professional in Estate Planning will help ensure your wishes are documented and honoured. Photo courtesy KZEL Law

Estate planning is not just for the wealthy; it’s for everybody. The key is to plan for tomorrow today so you can retain more of your assets and leave a lasting legacy for your family and designated beneficiaries.

Estate planning is the act of preparing for the transfer of your property upon death. That property – your “estate” – can include money, life insurance, pensions, real estate, automobiles, personal belongings, and even debt owing to you.

Estate planning also includes making arrangements so that financial and medical decisions can be made for you when you cannot make those decisions for yourself. For example, if you’re unable to manage your affairs due to an accident or an illness, an estate plan can set out who is to make those decisions for you.

Creating an estate plan provides peace of mind – you’ll be satisfied you’ll have sufficient financial resources in place for your retirement, that your wishes about the distribution of property after your death are fully taken care of, and that if needed, you have a plan in place so others can make decisions relating to financial or health matters.

The subject of estate planning may make you want to shudder, but the team at Kahn Zack Ehrlich Lithwick LLP aim to be good listeners, to simplify the procedure and work with you to ensure your wishes are documented and honoured.

What does an estate plan include?

An estate plan includes two components:

1. Retaining a lawyer to review your personal and financial circumstances and to have documents executed to ensure that your wishes are carried out: a will; enduring power of attorney to deal with financial decisions; representation agreement, which deals with health decisions; and any trusts like an alter-ego trust, joint spousal trust or family trust.

2. Reviewing all your financial resources and planning an investment strategy with specialists to ensure that you can live comfortably in retirement.

Additionally, good estate planning also considers minimizing taxes payable to Canada Revenue Agency, administrative costs and probate fees. It also considers the registration of assets in joint ownership so that upon your death, the survivor immediately becomes the owner; the purchase of life, critical illness, and long-term care insurance; and tax planning, business, and succession planning.

You’ll also avoid court challenges that can come when documents are prepared by someone without the requisite expertise and experience – for example, an ambiguous will may give a disgruntled family member the right to challenge it.

Similarly, for someone without a Power of Attorney, it will be necessary to make an expensive court application pursuant to the provisions of the British Columbia Patients Property Act and have a committee appointed to make financial decisions for you in the event that you cannot make these decisions for yourself if you become physically or mentally incapable.

How do I get started with my estate planning?

The first step is to meet with the legal professionals at KZEL Law to formulate a plan and draft estate planning documents for your review.

Besides a lawyer, it’s usually wise to obtain tax advice from an accountant and to consult with a financial planner and possibly an insurance broker. Many also make arrangements with funeral homes as a part of the estate planning process.

If you wish to appoint a corporate executor such as a trust company to be the administrator of your estate, it’s also important to meet with representatives to determine costs and investment philosophy.

The key documents include a will, an enduring power of attorney, a representation agreement, an alter-ego trust and a joint spousal trust for those over 65 years of age.

How often should I update these estate planning documents?

Once completed, estate planning documents should be reviewed at life’s milestone moments, such as marriage, the birth of children and grandchildren, the death of loved ones, divorce, etc.

These significant milestones could affect the way you wish to distribute your property among your loved ones. It is always a good idea to review these documents regularly.

For more information, please call Angeline de Vera in your local KZEL Law office at 604.232.7239.