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Kris Racine

7150 Hawthorne Dr. Unit 104
Windsor, ON, N8T 3N3

Phone: (519) 974-6688
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The Importance of Estate Planning at Any Age

Disclaimer: The purpose of this article is to provide general information which is subject to change. The author is not providing legal advice. If you have a specific legal issue, you should consult a lawyer who is licensed to practice law in your jurisdiction.

One of the biggest mistakes you can make in the area of estate planning is to assume you do not need to plan. If you think you are too young to prepare an estate plan or you think you do not have sufficient assets to warrant such a plan, you are making this mistake. Estate planning is much more than estate tax planning. Much of your estate plan will focus on providing you and your family with protection in the event of an unforeseen illness or accident and ensuring the well-being of your surviving family, rather than looking solely to managing large amounts of wealth upon your death. The following are examples of estate planning issues that require your attention regardless of your age or net worth:

  • Incapacity Protection - Do you have a plan in place to ensure that financial, administrative and medical decisions can be made for you in the event you are incapacitated and are unable to make such decisions? If you do not, do you understand what will happen upon your incapacity?

If you become incapacitated and do not have a succession of substitute decisionmakers in place to pay bills, sign legal instruments, file tax returns and otherwise take over the management of your affairs, your family will have to petition the court to name a personal representative who will be given the authority to take such actions on your behalf. The problem with this process is that

  1. it is expensive (there are substantial fees associated with navigating the court system),
     
  2. it is time consuming (it will take time for the court-appointed personal representative to be identified and put in place) and most importantly,
     
  3. it is out of your control (you will not have the ability to select your personal representative and will not be able to determine the extent and make-up of their powers to act for you). If, on the other hand, you have a plan in place whereby you have named a succession of decision-makers and have determined the powers those decision makers will have, the court (and the time and expense associated with the court's process) does not have to be involved and you will maintain control over the process. One thing is for sure: You cannot afford to wait until you need this protection to put it in place!
  • Providing for Minor Children - Do you have a plan in place that protects your minor children should something happen to you? Have you taken the opportunity to designate guardians for your minor children? Have you ensured that your children will be cared for and supported?

    If any of your children are minors upon your death, the court will name a guardian who will be responsible for caring for those children. To the extent that you have not provided the court with guidance as to the individual(s) you believe are most capable and appropriate to fill that position, the court will be trying to solve a mystery without any clues and may not select the individual(s) you believe are best suited for the job. On the other hand, you can take the opportunity now to designate who you would like to serve as guardian(s) in the event you have minor children upon your death. Just as with incapacity protection discussed above, the issue here is whether or not you retain as much control over the process and its outcome as possible. Take the opportunity to make your wishes known. Your children are too important to go unprotected.
     
  • Providing for Your Surviving Spouse - If you were to die today, would your spouse be able to continue to make the mortgage payments, fund your children's education and generally support himself or herself? Do you have sufficient life insurance coverage to guarantee the well-being of your loved ones? Your estate plan can ensure the proper treatment of your assets, including the treatment of your life insurance proceeds, and can protect your loved ones' future.

A well-crafted estate plan incorporates the use of beneficiary designations (associated with your life insurance policies and retirement accounts), jointly owned assets and the distribution scheme created in your Last Will and Testament or Revocable Living Trust to ensure that the proper individuals receive the proper amount of assets at the proper time and under the proper circumstances. Such a comprehensive plan will ensure that your surviving spouse will have control over the assets and will be able to use those assets to support himself or herself and your children and, to the extent your children are to receive assets upon your death, will provide a mechanism for directing the distribution of those assets to them or for their benefit so that your children are not hurt by their inheritance. For example, your estate planning documents can provide that any distribution to a particular beneficiary under a certain age will be held in trust for that beneficiary and will be distributed within the discretion of the trustee of that trust until that beneficiary reaches the age where it is appropriate that they receive control over those assets. With this type of planning, you can protect your beneficiaries and their ambition. The future of your loved ones is far too important to leave unplanned.

These are just three examples of how estate planning is relevant to you whether or not you are young or old, rich or poor.

Mutual funds are offered through Manulife Securities Investment Services Inc. Insurance products and services are offered through Seguin Financial Group Ltd. Seguin Financial Group is a trade name used for both mutual fund & Insurance business activities. Banking products and services are offered through referral.

info@seguinfinancial.com