What is estate planning?
Estate planning is the process of ensuring that your wishes, concerning your belongings and finances, health care and charitable donations, are all carried out, and in the most tax-efficient manner possible, both while you’re living and after you pass away.
While estate planning includes making a will, it can also involve naming beneficiaries and trustees, drawing up powers of attorney, business succession planning, and using strategies that will reduce the tax burden on your estate and your loved ones. Everyone should have an estate plan; it’s not just for very wealthy people.
Why is estate planning important?
It helps ensure that your money, belongings and assets are all distributed according to your final wishes. A comprehensive estate plan will help you to:
Estate planning can be complex. A good estate plan will incorporate these complexities and help ensure that your loved ones inherit your assets in accordance with your wishes.
Careful estate planning can help maximize the after-tax value of your estate (and having sufficient insurance can cover any potential taxes owing).
Having a power of attorney can help maintain control of your assets and health care when you’re no longer able to make those decisions for yourself.
How can an IG Advisor help you with estate planning?
Your IG Advisor will incorporate your estate plan into your overall financial plan. They’ll consider every aspect of your financial life and make estate planning suggestions, such as:
Estate planning as part of your IG Living Plan
Your IG Advisor will begin with an in-depth discussion to explore the size of your estate, your beneficiaries, your family situation (blended families often have more complex estate plans) and your succession plans if you’re a business owner. If needed, they can lean on the experience of our tax and estate planning team to provide advice on more complex issues.
Estate planning frequently asked questions
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How do I start creating an estate plan?
Typically, you’d start the process by taking an inventory of your belongings and assets so that you have a clear picture of what your estate will contain. You should also work with a financial advisor to work out the approximate after-tax value of your estate, so you know roughly how much you can leave to each beneficiary.
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What happens if I pass away and don’t have a will?
If you don’t have a will when you die, you’re considered to have died “intestate”. Your money and belongings will end up being distributed according to the intestacy rules of your province, which could go against your wishes.
For example, in some provinces, a common-law partner could inherit in the same way as a married spouse, while in other provinces they could receive nothing. Find out more about what happens if you die without a will.
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How do I plan for the taxes on my estate when I pass away?
If you plan on leaving your estate to your spouse, most of your assets can pass to them on a tax-deferred basis. However, if you’re leaving assets to a different beneficiary, you should consider how you’ll fund the tax liability. Some people choose to protect their estate from taxes due on their death by purchasing a permanent life insurance policy to offset those costs. Others choose to make a charitable donation to offset part or all of their tax liability.
An IG Wealth Management Advisor can help you assess which strategies make sense for your situation.
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How often should I review my estate plan?
You should always review your estate plan after any major life event — such as a birth, death, marriage or divorce — to ensure it reflects your new situation, and then make adjustments to it as necessary. You should also review it regularly to ensure that your beneficiaries and executors are still applicable. If anything drastic happens to your beneficiaries or executors — such as if they die, lose their mental faculties or move far away — you need to alter your plan.
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How do I appoint a guardian for my children?
You should nominate someone to act as guardian for your children in the event of your death by specifying your preference in your will (although your chosen guardians will usually have to be approved by a court).
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What should I include in my list of personal records?
To help your loved ones after you pass away, you should include these items in your list of personal records:
You can also download and print a PDF copy of our Personal Records Organizer to help organize information about your personal and financial affairs. It will be extremely valuable to your family and estate administrators after you pass away.
Speak to an advisor
Connect with an IG advisor to uncover your personal financial goals, and how you can achieve them.