You probably know how hard it is to plan your estate without an estate planning lawyer.
The paperwork involved with multiple parties. The taxes you need to be aware of. The laws of different areas where the beneficiaries are. These are not usually aspects people take note of when planning their estate.
Here’s how people are losing money simply by being misinformed on legal matters:
1. Planning Their Estate on Their Own
Unless you’ve helped somebody else with their plan, it’s unlikely you have prior knowledge of this. An estate planning lawyer does it for a living.
In a world where time is money, the less time you spend doing paperwork, the better. You have a lot of aspects to consider when planning your estate. We’ll give you three main examples:
- Personal Care Directive or a “living will.” At a certain point, you lose the mental faculties required to form a proper will. That is why you leave directions for your family to follow should something happen to you while you’re alive.
- Enduring Power of attorney. You need to decide who you give the power to manage your estate if you are unable to do it. “Attorney” doesn’t imply that the person needs to be a lawyer.
- The will itself.
2. Not Realizing Their Retirement Funds Are Involved in Their Estate
How many of you knew that Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) are transferable?
Upon death, your retirement plan can be included in the plan of a surviving spouse – tax-free. Of course, you can also leave it to someone in your family who is financially dependent – even if you have a surviving spouse.
- Children or grandchildren who are still minors
- People in your family who are mentally ill
- People in your family who are physically infirm
Most people don’t know about this possibility and end up deregistering their retirement funds. That means you will have to pay taxes on the income you receive, as with any income.
3. Having Someone Other than Your Estate Planning Lawyer Draft Your Will
A big mistake some of you might make is not getting a specialized lawyer to plan your estate. Maybe your friend who is a divorce lawyer has dealt with estate planning before. Or you’ve heard of someone’s real estate attorney doing the same thing.
They might know a thing or two about the laws involved, but you need more than that. If your will is not planned to a T, your beneficiaries will be the ones who suffer.
4. Not Planning Your Estate to Benefit Your Child
And no, we’re not talking about the paperwork involved in this. We’re talking about the maturity of the beneficiary.
It doesn’t matter how much money you leave your children. Even if they are young adults, they won’t know what to do with it all.
It is better to consult an estate planning lawyer on creating a trust for them. You can impose some limitations on when and how they receive the money.
- The child has to go to college; they earn money to pay for it.
- After they’ve finished their studies, they receive another part of the trust as a reward for a job well done.
- When they want to buy a house, they receive another share of the trust to help them out. Unless your estate includes property, of course.
There are many other examples of cases where you would have their best intentions in mind. But good intentions are not enough when planning your estate.
Don’t know where to start? Give us a call at (780) 459-5596 or contact us here. We will help you save your funds for much better purposes than taxes.