Estate planning ensures that your possessions and assets are allocated as per your wishes after you pass. By estate planning, you may be able to decrease fees and taxes that your estate would otherwise have to pay. Strategies to do this include creation of a Will, joint assets, trusts, assets with a designated beneficiary, and charitable gifts.
Subject to the size of your estate, creating a trust outside of the Will can be a beneficial way of estate planning. This can help protect your estate from any Will variation claims. A Wills variation claim imposes moral obligations and expectations of the Will towards a testator’s spouse and kids – even though you are free to dispose of your property in ways you desire, it must be fair.
One can name a beneficiary to receive your proceeds once you die through life insurance policies, registered retirement income funds, registered retirement savings plans, and tax-free savings accounts, to name a few. If you name a beneficiary and they live past your death by five days, then your proceeds will run outside your Will to them.
Individuals can also decrease the amount of income tax they owe from the sale of their assets on their death by making charitable gifts in their Will.
Planning now can ensure the appropriate decisions are being made with your loved ones in mind and that your wishes regarding allocation are followed. Every huge milestone in your life, such as marriage, property ownership, inheritance, a child, etc. can affect your life in how you want to distribute your money after death. After such milestones, it is recommended that you tweak your estate plan to ensure that such additions are accounted for.