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ESTATE PLANNING


       Myths and Misconceptions about


       Estate Planning and Legacy Giving



        By Karen Slezak, CPA, CA, CFP, TEP, BBA



       ESTATE                                   Common Myths and Misconceptions


       PLANNING                                 Myth: Estate Planning is too        Myth: It doesn’t matter if I have
                                                complicated and expensive           a will, my spouse will inherit
       Many people delay estate                                                     everything anyway
       planning because they feel it is         Reality: The process involves
       a luxury that only very wealthy          directing what you have, such       Reality: This may be true if
       or elderly people do. Others             as a home, car, bank account,       all assets are jointly owned
       go through the process once,             RSP/RIF or TFSA to family or a      (e.g., house, bank and investment
                                                charity of your choice. This can
                                                                                    accounts) and other assets have
       then feel they are done. In fact,
       estate planning is an ongoing            be done simply by making a          been designated to the surviving
       process that needs to be revisited       designation (on an RSP/RIF or       spouse (such as RSP/RIF, TFSA).
       every three to five years. People        TFSA), changing ownership so it’s   It does not allow for gifts to other
       marry or divorce, have children,         jointly owned (e.g. for a house) or   family members or legacy giving,
                                                                                    or account for what will happen
                                                leaving directions through your
       buy property, come into an
       inheritance, retire or have health       will. Before doing any of these     if your spouse passes at the
       issues. An estate plan ensures           things, consult with an accountant   same time.
       debts and taxes will be addressed        or financial advisor as there       If joint ownership is not
       and the remaining assets                 may be current and future tax       appropriate, there may be
                                                consequences of your changes.
       transferred to the intended heirs.                                           intestacy without a will – where
                                                Misconception: Having a will        assets are distributed according
                                                and Power of Attorney are           to provincial or federal laws. If
                                                unnecessary for young and           the deceased has a spouse but
                                                healthy people                      no children, all assets will pass
                                                                                    on to the spouse. If there is both
                                                Reality: While it’s natural to      a surviving spouse and minor
                                                associate estate planning with      children, the estate will be split
                                                later in life, unexpected illness or   amongst them according to a
                                                accidents can happen at any age.    formula. The children’s portion
                                                Having a Power of Attorney in       will be held by the government
                                                place ensures that someone you      until they are 18.
                                                trust can manage your financial
                                                matters – such as paying bills or
                                                filing taxes – if you’re temporarily
                                                unable to do so. A will is equally
                                                important, especially for parents
                                                of minor children, as it allows you
                                                to name guardians and clearly
                                                outline how your assets should be
                                                managed and distributed. Planning
                                                ahead provides peace of mind, no
                                                matter your age or stage of life.
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