A legal Will can be one of the most powerful documents in your estate plan. But it is not the only tool you will need. Nicole Ewing, Director, Tax and Estate Planning, TD Wealth, joins Kim Parlee to answer this all-too-common question and help shine some light on, well, what comes next?
* They do think that.
* You are correct, Kim.
* But it is not. It is a document as part of an estate plan. But an estate plan can be much more fulsome than that and really needs to be. Because your will can name who's going to be your executor and be responsible for the administration. It may name who your beneficiaries are.
* But there's other things that we want to think about before we get to that point. So how are we funding our retirement? And what does that mean for what might be left over at the end? What sort of beneficiary designations are we doing on our registered plans? Are we assuring they're going the right place? So that's all part of the estate planning discussion, not just a will.
* OK, let's talk about the fulsome estate plan then because I know you've got a list.
* I do.
* You can tell me what are the kinds of things you should be thinking about when you're preparing for this?
* So the very first thing, in my view, is making sure that you have your powers of attorney up to date. And these are the documents that give somebody else the authority to act on your behalf if you're not able to. So if you've lost capacity or for whatever other reason are not able to call up the hydro company or call up your financial advisor and give them instructions, you've given somebody else that authority. And you live with the consequences. So having that document is really critical. Without it, someone's going to need to go to court.
* So that's number one. Number two is thinking about minor beneficiaries. Have you planned accordingly for them? So if somebody's under the age of 18, and they are named in your will, they don't necessarily get access to that money right away. Depending on if you just simply name them, there are laws that restrict their access until age 18.
* So we want to be thinking through, is there a trust that perhaps we want to put in place? Who do we want to help manage that money for them while they're under age 18? And perhaps even after age 18, do we still want to maybe restrict some of the spending and really think about how they're using the money? And are they mature enough to be using it?
* Similarly, with beneficiaries who have disabilities, there's different types of planning that we want to look at there. Perhaps there's RDSPs we want to think about or Henson trusts that you can incorporate into your planning that will ensure that those beneficiaries are not losing any of the other benefits that they're currently entitled to simply because of the way that they've received your assets. So those are the beginning of the list. There's more.
* There's more.
* We want to-- funeral arrangements. To the extent that you can make those decisions in advance, that's really important ... you have the opportunity to say what you want to have happen. Otherwise, it's going to be your executor who's going to make those decisions.
* Long-term care planning, so how are you going to fund those final years of your life and ensure that you're living in the lifestyle with the care that you want? We need to make sure that you have sufficient assets for that...
* And do you want to tell your family that I want to spend it all? If there's nothing left over, so be it. But I want that money for my care. And that's something that you should be thinking about and communicating so that there's clear expectations about--
* No surprises.
* Right. What did I have-- tax efficiency, of course. We can talk about that all day long. But tax efficiency, there's ways that you can structure your wills and your estate planning to make sure that you're not paying more tax than you need to. And then the last one I had on my list was blended families.
* That's a big one.
* It's really important in those circumstances to make sure that you're getting that full advice because we have different, sometimes competing interests. There are perhaps obligations that you have to children from a prior marriage or a spouse from a prior relationship that you need to be accounting for in your estate plan. Just really making sure that when something happens to you, you have all of these considerations. You're the one who's made the decisions for those. You're not leaving them for others to be making.
* OK, let's say that I have the foresight to get some things in place. And let's say I have a power of attorney that says one thing, and then I have a will that maybe says something else. Maybe I have a shareholder agreement over here that's something different. What happens then?
* They can contradict each other. And in that, we're ending up in court. We're debating who owns what and whether I even have the authority to deal with that asset. And it's not just those. We want separation agreements, marriage contracts, looking at how our accounts are held. So do we have joint names on those accounts? Beneficiary designations on your registered plans, all of these things need to be considered together.
* Because if they aren't, and we have some of those confusions, we can end up with disappointed beneficiaries. We can have litigation about whether or not you intended so-and-so to get the thing. We can end up with paying more tax than is necessary. And that's simply by including certain language in a will-- for example, you can protect your beneficiaries' future growth of their inheritance by including that language in your will.
* And so there's so many ways that we can, when we're looking at all of our documents together, make sure that they're speaking to each other. Make sure that our shareholder agreement is not saying something different than our will, saying something different than our power-of-attorney document that allowed us to get there.
* So we don't want delays in administering the estate. We don't want confusion in terms of who has authority to deal with your assets. And we don't want there to be family disharmony. We don't want there to be-- that's not the legacy that we want to be leaving. So having everything coordinated, having the experts look it over, make sure that everything-- that what you expect to have happen will happen based on the documents that you've put in place.
* And the key is also, you said, the team of experts. Get people in the room to talk who understand all facets of your financial, your legal side, everything in the room.
* Exactly. And we all look at things from a slightly different lens. And so your lawyer cannot be expected to have thought through all of the implications that a financial investor or advisor might have been thinking about. And having them together, they can speak to each other and hopefully identify some of those opportunities for planning that will save the tax, will save the administration. But working together, lawyer, accountant, financial planner, everybody speaking together and making sure that they're developing a plan for you that works for you and gets, ultimately, your objectives realized.
* Nicole, thank you very much.
* My pleasure.
* All right. And if you have a question, email us. Send it to firstname.lastname@example.org.