Thursday, July 10, 2014

You can’t take it with you! - Estate Planning: Part 1

Anna Procio,
Estate and Administration Officer
Estate planning is a bit of a ghoulish topic to some. Few people want to think too much about their eventual demise or about the arguments that might erupt among greedy relatives fighting over their “fair share”. And yet, the better you plan for the future the more likely your wishes are going to be carried out the way you want. And despite the worst-case scenario of heirs fighting it out in court over your hard earned assets, a carefully considered and up-to-date estate plan is one of the most caring gifts you can leave those you care most about.

Now did you know Estate Planning is one of many services Ukrainian Credit Union is able to offer our members? Through our partnership with Concentra Trust we offer services both for you as well as for the executors and beneficiaries of your estate. We recommend working with a professional estate planner. However, knowing ahead of time what an estate plan entails will help you make informed, carefully considered decisions about the things that matter most to you - your family and friends; your own care should you become unable to care for yourself; and the ownership, management and distribution of assets during your lifetime and upon your death.

This article is the first of a three-part series that will look at the basics of estate planning from the perspective of what you need to think about when planning for your eventual passing.

When should I start thinking about an Estate Plan?
It’s never too early to start planning. You’re not just preparing for some distant point in the future. Just by going through the estate planning process you are going to get valuable insight into what your current financial situation is like and what you need to do to achieve your goals. It eliminates uncertainties and helps you maximize the value of your estate. Here’s a look at some of the steps involved in estate planning:

review and document your current financial situation
define your personal and financial goals
identify options and make informed choices that will allow you to achieve your desired outcomes
put your plan into action
review your plan and periodically make adjustments

These steps are what we should all be doing anyway as part of keeping our finances in order.

Where do I start?
A complete estate plan ensures that you can provide for those you care about, even if you’re no longer there. To ensure that you have a complete plan, you need to figure out your assets (what you own and what it is all worth) and your liabilities (what you owe). You also need to figure out if any of your assets or liabilities are held jointly with someone else, like your spouse or a business partner.
Your assets might include some or all of the following:
Real estate – your home, rental properties, a cottage
Registered investments (RRSPs, RRIFs, TFSAs, RESPs)
Bank accounts
Investments – mutual funds, stocks, bonds, GICs, term deposits
Insurance policies
Assets of any businesses you own (wholely or  in partnership with others)
Personal property – including everything from cars and boats to artwork to even sentimental items you want to leave to a specific heir

Liabilities on the other hand include:
Mortgage(s) on real property
Personal loans (car loan, RRSP loan etc.)
Amounts owing on credit cards and lines-of-credit
Personal obligations (e.g. alimony, child support, debts owed to friends or family members)
Outstanding property or personal taxes

Now that you have inventoried your assets and liabilities, you should also make a list of various important documents that will be useful to the executors of your will. You should also keep a record of where all these documents are kept, whether in a safe deposit box at Ukrainian Credit Union Limited, under your mattress or in a safe at your lawyer’s office. Such documents include:

Original Will
Power(s) of Attorney
Living Will or Advanced Medical Directive
Marriage Certificate(s)
Pre-nuptial or co-habitation contacts
Birth/Adoption records
Insurance policies
Real estate deeds
Details of pre-planned or pre-paid funeral arrangements.

The job of your executor(s) will be much easier if they know exactly where to go to find all of this. There are some legal deadlines that executors have to meet and the less time they spend running around looking for key documentation, the more time they have to focus on carrying out your will the way you intended.

So now that we have covered the basics of what you will need to draw up your estate plan, in the next article, we will talk about what to do with all of this information. To learn more, please feel free to call call me.

Anna Procio,
Estate and Administration Officer
Ukrainian Credit Union Limited
416-763-5575 x200

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