“Advisors should help them look at all their assets and make sure that they’ve developed a plan as to who those assets are to go to, when they want them to be transferred, and it’s done in a timely and tax-efficient manner”
In addition, having a proper estate plan can significantly reduce the chance of litigation which can be a destroyer of family wealth and harmony. Having a will is foundational, even though only about half of Canadians have one – and not all of those are updated to reflect the client’s life events, such as marriage, divorce, children’s births, and changing relationships.
“A lot of people don’t realize that, in some provinces, marriage revokes your will,” said Natale. “Furthermore, in many provinces, when you get divorced, any gifts that you give to your spouse in your will are automatically revoked. But, that same rule usually doesn’t apply to beneficiary designations. How many times have people gotten divorced and forgotten to remove the exes as a beneficiary?”
Not having a will also means that your clients will die intestate, and then each province has its own rules for who gets what and those may not reflect your client’s wishes in addition to resulting in extra costs and delays. Minor children who are entitled to a portion of their parent’s estate can be particularly problematic.
Therefore, it’s important for clients to name a beneficiary for their RRSPs, RRIFs, TFSAs, insurance contracts, segregated fund contracts, and guaranteed interest accounts (GIAs – a GIC type investments offered by insurance companies), and ensure those names are up to date, too.
