Creating a will can be a very emotional experience. But it is important to keep in mind that not having one can cause even greater emotional turmoil for those left behind. Surprisingly, according to a new TD survey, half of Canadians (50 per cent) do not have a will, which is a crucial step in allocating assets after death, minimizing the potential for family conflict upon, and ensuring your assets are managed as you wish.
Not having a will can create a lot of conflict and unnecessary animosity amongst family members during an already difficult time – regardless of how much or how little you plan to leave behind. With most Canadians (88 per cent) having at least one sibling, family conflict over inheritance is all too common.
While one may think estate planning is necessary only for those with significant financial assets, the reality is that estate planning is essential for everyone, regardless of the value of property or other assets.
Here are a few tips to help plan your estate, manage potential tax implications and avoid possible family conflict:
Personal property
Items such as the family home, summer cottage or jewelry are all considered property assets, regardless of what they're worth. A professional appraisal is an important starting point for valuing these assets. Keep in mind some items may mean more to some family members than to others. Something that you may have strong feelings over, like the family cottage, may not have the same sentimental value for your children. It is best to have these conversations now to find out what your family may be emotionally attached to, and base your decisions on these priorities.
Cash and Investments
Since these assets are measured by monetary value, it can be relatively straight forward to divide them up among loved ones. In Canada, money received from an inheritance is not considered taxable, but a deceased person's estate has to pay taxes on any income, including investment income, before money can be distributed to beneficiaries.
Estate planning is a must-do for everyone, regardless of how big or small your estate is.
Family Business
Succession planning should be a priority for anyone who owns a family business. Having a plan that outlines what should happen with the family business can help to ensure a smooth transition, whether that means transferring ownership to the next generation, selling the business altogether, or something else.
The survey showed that one in five Canadians who received a family inheritance say they experienced conflict with their siblings or other relatives over the division of assets.
A good rule of thumb is to review your estate plan at least every three to five years or when a significant life event occurs.
Other considerations include: changes in marital status for you or your children, the birth or death of a family member, or a change in your employment status or financial situation.
Estate planning is a must-do for everyone, regardless of how big or small your estate is. While you may think estate planning is necessary only for those with significant financial assets, the reality is that estate planning is essential for everyone, regardless of the value of property or other assets.
Follow HuffPost Canada Blogs on Facebook
Also on HuffPost:
