Creating, maintaining and executing a formal estate plan are important for most people. In addition to learning about the reasons why you need an estate plan, there are other related issues you should understand as you consider creating an estate plan.
Proceeds from your life insurance policy can be used to fund liabilities, such as taxes owing on your final income tax return. Life insurance can be used to generate a source of income for your dependants. If you wish to pass certain property to one beneficiary, which may result in a disproportionate share, life insurance proceeds can make up the difference for the other beneficiaries.
- I already have a will. How often should I update it?
Review your will at least every three years or when there is a major change in your life. For instance, if you get married, divorced or widowed, have your first child or grandchild, retire, or experience a significant health event or change in your financial situation, you should review and update your will.
- Why do I need a power of attorney?1 What if I don’t have one?
A power of attorney (POA) is a document that allows another person to act on your behalf in financial matters when you are unable to do so. Your appointed attorney (not to be confused with a lawyer) can deal with bank matters, investments or sale of property. If you don’t have a POA and become incapacitated, a family member or someone else can apply to the court and ask to be named your “guardian” to act for you in these matters. Otherwise, the Public Guardian and Trustee2 of your province becomes the guardian of your property.
- What is probate?3
- Probate is the process of authenticating a will. It serves as proof that the will has been certified by the court and that the personal representative (PR)—executor4 or estate trustee—is authorized to represent the estate. The probate process is critical to protect PRs, beneficiaries and third-party financial institutions like MD who act in accordance with a particular will.
In Quebec, probate is not necessary if you have a notarial will (a will that is written by a notary). The notary keeps the original and files it in the Registre des dispositions testamentaires de la Chambre des notaires du Québec.
- How complex is the role of an executor?
Although often considered an honour, being named executor on a will can actually be a burden. If there is any complexity to your financial affairs, or if there is a complex or emotional family situation to contend with, the role of executor can be both time-consuming and demanding. A high degree of familiarity with legal, tax and investment matters may be required, not to mention patience and strong communication skills. MD Private Trust can help you with estate planning as well as executor and estate settlement services.
- Why does it matter how ownership of my assets is registered?
You may have property or accounts registered in your sole name, as joint tenants with right of survivorship, or as tenants in common. The way ownership of your assets is registered determines which assets are governed by your will and which are not, and may influence their tax treatment upon your death.
- How does life insurance help in estate planning?
Learn more about MD's estate and trust offering or contact an MD Advisor to find out how we can help.