Ensuring Your Financial Affairs Are Ready For A Worst Case Scenario

Businessman And Businesswoman Meeting In Coffee Shop.

Summer is finally here and while many Canadians will make the annual sojourn up to cottage country for the season, a large number will also take to the road, air and water for trips further afar. While the focus before travel is usually on getting new clothes, arranging for pets and making sure the neighbours bring in the mail; there are even more important considerations that most tend to omit. This includes ensuring our affairs are in order should something happen to us when we are away.

The first item is the status of our will.  If it was reviewed or changed within the last few years then chances are everything is in order, though it is still good practice to review it with a lawyer before a major journey.  This is especially true if you are travelling with your children and/or grandchildren since a worst case scenario could present major problems in terms of where the estate flows to.  I have known several high net worth individuals who insisted on travelling separate from their children for this very reason. If your will has not been reviewed for several years, then it is simply good practice to do so well before your travel date.  Many individuals have wills that have not been looked at or changed for over ten years.

We also need to review of all other financial assets where individual or charitable beneficiaries are named.  Examples of this would include life insurance policies. Pyle Group outside Some will name their estates as the beneficiary of a policy where their estate is complicated, but the majority of people will typically name spouses, children and grandchildren.  What many don’t realize is that they can name contingent beneficiaries on these policies in the event that the primary beneficiary is deceased. This is important in the case where spouses have each named as primary beneficiary and travel extensively.

Similarly, we can also name contingent beneficiaries on registered accounts like RRSPs, RRIFs and TFSAs.  This is not to minimize income tax at estate time (registered accounts other TFSAs are deemed to have been disposed of at the time of death and their values are treated as income), but if the assets of these accounts can flow through to a beneficiary instead of the estate, it is possible to minimize probate. 

No one likes to think about the end of life, especially when the summer is supposed to be filled with the joy of spending time with loved ones, but spending a little time going over your estate and plans can help alleviate financial pressures in the event we are not here.  As always, it is important to review these issues with your legal representative and professional tax advisor beforehand.

By Andrew Pyle, MA, CFP, CIM, FMA, FCSI Branch Manager, Senior Wealth Advisor and Portfolio Manager, Scotia McLeod
The Pyle Group, www.pylegroup.ca

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