34 ~ Sunday, May 26, 1996 ~ North Shore News Estate pi Estates large and small require a will BY CHRIS CARTER CONTRIBUTING WRITER ESTATE planning may be the cod liver oil of personal financial man- agement. But devoting a little effort oO. this aspect of your finances can make an impor- tant difference to your fami- ly's financial security. While many people are reluctant to talk about pass- ing on their wealth, without proper’ management you could be surrendering con- trol of your assets to govern- ment regulations after you pass away. Simply put, an estate plan isa long-term strategy aimed at ensuring that your assets and earnings do you the most good while you are alive and your relatives the most good after you are gone. A good strategy will: — ensure that you have ade- quate funds to cover estate costs; — minimize.taxes; ; — guarantee your financial assets are distributed fairly and according to your wishes. Estates are distributed in two ways — outright or into trust. Outright distribution sim- ply means that assets are handed over directly to the beneficiaries. Holding assets in a trust may provide much-needed flexibility. For instance, income from the trust may be paid to the deceased's spouse for the duration of his or her life and then be given to the children. Many people believe that their estate is not large enough to warrant a plan, or that somehow everything will take care of itself. This is not the case. Without a will, for instance, provincial law will dictate the timing and alloca- tion of assets among family members. Unfortunately, this’ distri- bution may not be responsive to the needs of your family. Without a formal will, asseis are automatically divided between the spouse and the children, although the ratios differ from province to province. Assets are also always distributed outright, which can cause many problems.. For example, if the princi- pal asset of the estate is a ‘family home — in which the spouse is currently living — he or she may be forced to sell the home in order to dis- tribute the estate according to provincial laws. Just as important as the proper allocation of resources is the protection of your heirs. If any of your heirs are children, failing to create a valid will abolishes your ability to name an appropri- ate guardian. Many Canadians are reviewing their estate plan- ning program. Probate fees, as well as executor fees, depend on the size of the estate (executor fees typical- ly amount to 3% to 5% of the value of the estate). These costs can be reduced in a number of ways. First, ensure money or assets are transferred to the appropriate people without becoming part of your iegal estate. Be sure that your spouse. is the beneficiary on life insurance policies and annu- _ ity contracts. Hold real estate as joint tenants and register bank and investment accounts under joint tenancy with rights of survivorship agreements. | Second, establish a living trust with assets which will : guide, w PARK Royal’s Midland Walwyn Capital inc. financial adviser Chris ‘Cartsr. aay: estate plan is a long-term strategy aimed at ensuring that your aesets do you the most good while you're alive and your relatives the most good aster you "re gore. then also remain out of your estate, Trusts may be tailored to a variety of personal needs, and then pass to specifically named beneficia- ries as per the terms of the trust docurnent. (Before setting up a living trust, be sure to investigate the tax x implications with a an whigh will afigwer many questions” about funeéal wishes, & estate administration, Complete ‘arrangements ‘in the: Bb ayet rit coinfort &. security, of. your ‘owe, see. 4 Register For A Tax File Review (to 1985) Auditax Fee - 35% of Savings Based On Receipt Even. with -alternative methods for passing on some assets, your will-is a crucial- ly important document. Always refer to a lawyer,’” notary or trust. officer for’ advice when drawing up or changing a will. Choose your. executor — the person who. acts on the instructions of your will — very carefully, and make sure that they are : WILT you get married be sure to rewrite your will. Any: changes should..be discussed, with: your, execu tor, as he can be held: legally liable . for mistakes’: “made when the will i is settled, faltye your ie our D ly, to be fulfilfed. Con! qualified and capable of car: ..; rying out your instructions properly. ' Many people | choose. an : executor who is.not‘part.of - the immediate family, as this’. person .must carry out many important .and complicated ° financial duties, including the handling of all tax. mat-: ters arising from the will, during-a period when’ ‘family. members are coping: with personal loss. - ~ You should also review your will every few years. It should be updated as neces- sary to reflect your intentions as well as the changing needs of your family. Most people are unaware that a marriage automatically .. existing .: Branc invalidates any Are you aware Biitne tax liability held within. pile Do you wisk have th the i Do you wish to leave the py full value of your RRSP. Ri RRIF to your family, |“ charity or estate? Would you like to look ati cost effective and tax efficient options to ensul or RRIF?. Sie, Wysota, CFA al Consultant ; ‘she i is. ithe poseib asked. ion ot the by taking @ some simple teps —,and consultin i «ensure that’ your estate, is di ] ‘tributed fairly and effi suit your family:b Midland: Waiwyn’ Inc. is not a tax adviser‘and ; recommend that clients ‘seek Understanding your options is critical in planning to create retirement income using your registered assets, © especially if you are. - between the ages}. of 65 and 69. Calt Chris Carter Financial Advisor 925-5565 for your free copy of this” special report. < fio Recovery — Ho Charge [Exctuding $35.00 Registration Fee} Tax Review, E-File | Tax Preparation, Estate Returns, Piease Call 925-8503 the full value of your RRSP or RRIF can ‘pass onto whomever you wis Year Round Tax & Insurance : : If you are interested in (Life, Disability & Travel) Services learning more about this _ unique opportunity call: AAIDLAND WALWYN - Brur fuse THEN IRG® TM Blue Chip Thinking isa. teademark of MWCI, Member CIF, : 100 Park Royal Suite 114 West Vancouver’ 925-5565 (24 hour): The Leading indicator. Wood Gundy Private Client Investments is a division of CIBC Weod Gundy Securities Inc., a member of the Canadian Investor Protection Fund and a subsidiary of CIBC. Cam McNaughton - Tel/Fax: 878- 0829 (Lower Mainland) Auditax Inc. 308 East 70th Street North Vancouver BC V7L 2x9