Estate Planning: The Final Pillar in Your Financial Plan

Thursday, July 7, 2022

June-20-2022

Sometimes it’s hard to imagine that it’s June already and we can look forward to another glorious Ontario summer. Let me start by wishing you my personal summer greetings as we begin to come out from under the COVID “winter” of the last 2 ½ years.

Enjoy the barbecue, beach, or campground of your choosing as we get ready to soak up the rays and bask in our glorious summer sunsets.

It can be difficult to believe that we will eventually be enjoying the summer sun as we bundle up to go out and scrape ice of the windshield in January, but the arrival of summer is inevitable. Just like the arrival of snow in January (oops, sorry about that).

While the arrival of each succeeding season is inevitable, so too, as the saying goes are “death and taxes”. And one of the major purposes of a good financial plan is preparing those eventualities.

Preparing for the inevitable

We’re all used to the annual ritual of preparing for tax season, each and every spring. After that - summer. But many Canadians don’t do much about planning for the other eventuality – death. While you might not be there for it, you still don’t want to make things more difficult for your loved ones after you’re gone. Or for yourself as you “get on in years”.

Building the elements of an effective financial plan includes estate planning – it has to…

What does your financial plan need?

An effective financial plan includes many different elements:

Having adequate insurance to prepare for the unexpected – you need to make sure you have enough insurance for your car, your house, your health, your senior years, and your life.
Building up an adequate rainy-day fund to help you get through any kind of financial rough patch – whether that’s three months, six months, an entire year.
Setting aside the money you need for the retirement you want. This will include workplace pensions, registered retirement savings plans (RRSP), tax free savings accounts (TFSA), and simple unregistered savings.
A fully thought-out estate plan that prepares your family and your estate for your eventual passing.

Although it’s only one element of an effective financial plan, it is generally the one that people pay the least attention – until it’s too late. And because of that I want to spend some time briefly talking about the main elements of a well-structured estate plan.

What does your estate plan need?

Like so many elements of an effective financial plan, most of us know what an estate plan should include:

A will – Set out what you want to see happen with your worldly possessions - not just your money
An executor – Who do you want to have handle your estate and make your last will and testament a reality
Bequests – You should also make arrangements, while you still can, for any charitable gifts you want to leave behind
Long term care insurance – Put aside the resources you need to cover your physical needs before you aren’t able to actually able to do it when you need it most
A communications plan – Don’t let your loved ones find out what your plans are while they hear your lawyer read out your will

Your Financial Plan needs a full team

As your investment fund advisor my goal is to provide you with my expertise in investment planning. And I can work with you to decide on your insurance and put the products in place to cover your insurance needs.

But you need to include other professionals on your team, to give you the expert advice you need on every aspect of your financial plan.

You need the advice of a lawyer as you plan your will, choose your executor, and decide on your bequests and final wishes. Although you might think that’s obvious, I need to say it. Find a lawyer and prepare your will as soon as you can. Go ahead and do it. Now!

And while you’re at it, find an accountant that can help you plan for your tax liabilities and sort out options regarding RRSPs and TFSAs, etc.

Once you have all of that in place, I can work with them to make sure the plan you have is right for you. Together we can make it happen. I do it for my clients all the time.

So, your job is to find a lawyer to prepare your will, find an accountant to review your tax needs, and come back to me to plan out investments.

And if you have done all of that already, thank you. I want to thank you. Your family want thanks you. And once you’re done you will definitely want to thank yourself.

As usual, if you have any questions, email me at [email protected] or call me at (519) 279-0186. I look forward to hearing from you soon.

And have a great summer.