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Estate Legacy Planning 2009

G
Geoffrey Parker

This document provides an overview of estate planning and strategies. It discusses creating a will, powers of attorney, probate fees, trusts, taxation of estates, business ownership, US estate taxes, and using life insurance. The document emphasizes the importance of estate planning to ensure wishes are communicated and conflicts are avoided, and notes that planning should be done proactively rather than waiting until it's too late.

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Welcome
Estate & Legacy Planning
Family Issues Protecting your Lifestyle Investing for the Future Retirement Planning Your Legacy Philanthropy Geoffrey Parker, CFA, CFP
Estate Planning Geoffrey Parker, CFA, CFP
Estate Planning Your Beneficiaries Charity Family CRA
Estate Planning Your Beneficiaries Charity Family CRA
Determine what you want to do Estate Planning Review assets and record location Review beneficiary designations Consider use of Trusts Consider benefits of jointly owned property with spouse Review life insurance needs
Avoid intestacy prepare a will Estate Planning Prepare POAs for property and personal care Preplan funeral arrangements Talk with family members and executors
Wills Powers of Attorney Probate Fee Planning Trusts: Tax and Non-Tax Uses Taxation of Estates & Tax Planning Strategies US Estate Tax Insurance as an Estate Planning Tool Estate Planning
Wills Estate Planning
Why a Will? Who gets what When they get it And who controls the process Avoids cost and delay Minimize family disputes Opportunity for planning/savings
What if there is no Will? Distribution by provincial formula Administrator appointed by Court Assets in limbo Loss of investment and management powers and trust options Estate Planning
Assets Passing Outside Will Joint ownership Designated Beneficiary Assets in Trusts or Corporation Estate Planning
Powers of Attorney (POA)
What is a POA Ensures proper management of property and financial affairs in the event of mental incapacity or extended absence Affairs managed for your benefit Can have restrictions May be limited in time Can be continuing Estate Planning
POA for Personal Care Attorney appointed to make medical decisions for you Living Will Specify your medical instructions Proxy can be named to carry out your instructions or make decisions not covered in the will Estate Planning
Probate Fee Planning
How Fees are Calculated? On value of estate No maximum in Ontario Excludes Real property outside province Property jointly held with right of survivorship Insurance and registered plans with designated beneficiaries Estate Planning
Strategies Assets pass outside the will Gifts prior to death Alter ego or joint partner trusts Dual Wills Two Wills Estate Planning
Trusts: Tax and Non-Tax Uses
Concept Separation of legal and beneficial ownership Trustee has legal title Beneficiary has benefits Estate Planning
Testamentary Get marginal tax rates of individual Trustee chooses year end No attribution!!!! Inter Vivos Top personal rate Calendar year end Attribution Estate Planning
Taxation Trust is a flow through vehicle for tax purposes Income can be taxed in the trust or in the beneficiaries hands Trusts effective to split income Discretionary trusts give best tax effective opportunities Estate Planning
Taxation of Estates & Tax Planning Strategies
Capital Gains Deemed sale at Fair Market Value for all capital property at time of death Estate Planning
Registered Plans Fully taxable in year of death Spousal rollover available Other limited rollovers Estate Planning
Business Owners Estate freezing Capital gains exemption: Post mortem planning Multi discipline complex planning Estate Planning
US Estate Tax
Taxation of worldwide income: Residency immaterial Value vs. Gains US has gift tax, estate tax on value, Worldwide Property Canada income tax on capital gains, only estate tax is provincial probate fees Estate Planning
Guidelines: No US Estate Tax if WWP within Exclusion Amount for year of death If value of US property exceeds $60,000US US Estate Tax may be payable The greater the value of US property and WWP the greater the likelihood of US Estate Tax Payable Estate Planning
All property owned by deceased wherever located 100% value of jointly held property unless contribution by other owners proved Includes assets not normally thought of as part of an estate different from probatable assets RRSPs, RRIFS, value of defined benefit plans Proceeds of insurance Assets in controlled trusts for benefit of deceased i.e. alter ego trusts Similar rules for US and non US citizens Estate Planning
Strategies Do nothing Wait and see Look at planning strategies Divest US content Estate Planning
Insurance as an Estate Planning Tool Estate Planning
Use to pay capital gains taxes without selling asset recreational property (cottage), other personal use assets Preserve value of RRSPs Equalize distribution of assets Create wealth and enhance income on tax favoured basis Costs less than the tax Estate Planning
Legacy Planning
Charitable Giving One-time gift Community Foundation Life insurance designation Designation on RSP/RIF Estate Planning
Summary
Estate Planning Get qualified advisors Your plan must fit you Anticipate the unexpected as well as the expected Carry through your planning to completion Review your plan every five years or when your life changes Carry through your planning to completion Make your plan flexible and appropriate Involve family members
Why? 70% of wealth transition have been found unsuccessful Assists with transition Addresses potential conflict now Ensures wishes are communicated and (hopefully) understood Estate Planning
Plan While You Can Not When You Must (or Cant) Estate Planning
Plan While You Can Not When You Must (or Cant) Estate Planning
Planning for your death doesnt accelerate its date. Not planning for it doesnt postpone it. Estate Planning
Working with You Estate Planning
The Process Detail what you want to do Review and inventory your assets Assessment of your estates tax liability Discussion of alternatives Package to go to estate lawyer Estate Planning
Benefits Detailed and documented analysis of your estate for You your family your executors an estate lawyer Less time spent with lawyer = less cost to you Estate Planning
Geoffrey Parker, CFA, CFP, CSA "Planning for Your Peace of Mind 905-470-9940,304 [email_address] Handing Down the Cottage
Thank you

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Estate Legacy Planning 2009

  • 2. Estate & Legacy Planning
  • 3. Family Issues Protecting your Lifestyle Investing for the Future Retirement Planning Your Legacy Philanthropy Geoffrey Parker, CFA, CFP
  • 4. Estate Planning Geoffrey Parker, CFA, CFP
  • 5. Estate Planning Your Beneficiaries Charity Family CRA
  • 6. Estate Planning Your Beneficiaries Charity Family CRA
  • 7. Determine what you want to do Estate Planning Review assets and record location Review beneficiary designations Consider use of Trusts Consider benefits of jointly owned property with spouse Review life insurance needs
  • 8. Avoid intestacy prepare a will Estate Planning Prepare POAs for property and personal care Preplan funeral arrangements Talk with family members and executors
  • 9. Wills Powers of Attorney Probate Fee Planning Trusts: Tax and Non-Tax Uses Taxation of Estates & Tax Planning Strategies US Estate Tax Insurance as an Estate Planning Tool Estate Planning
  • 11. Why a Will? Who gets what When they get it And who controls the process Avoids cost and delay Minimize family disputes Opportunity for planning/savings
  • 12. What if there is no Will? Distribution by provincial formula Administrator appointed by Court Assets in limbo Loss of investment and management powers and trust options Estate Planning
  • 13. Assets Passing Outside Will Joint ownership Designated Beneficiary Assets in Trusts or Corporation Estate Planning
  • 15. What is a POA Ensures proper management of property and financial affairs in the event of mental incapacity or extended absence Affairs managed for your benefit Can have restrictions May be limited in time Can be continuing Estate Planning
  • 16. POA for Personal Care Attorney appointed to make medical decisions for you Living Will Specify your medical instructions Proxy can be named to carry out your instructions or make decisions not covered in the will Estate Planning
  • 18. How Fees are Calculated? On value of estate No maximum in Ontario Excludes Real property outside province Property jointly held with right of survivorship Insurance and registered plans with designated beneficiaries Estate Planning
  • 19. Strategies Assets pass outside the will Gifts prior to death Alter ego or joint partner trusts Dual Wills Two Wills Estate Planning
  • 20. Trusts: Tax and Non-Tax Uses
  • 21. Concept Separation of legal and beneficial ownership Trustee has legal title Beneficiary has benefits Estate Planning
  • 22. Testamentary Get marginal tax rates of individual Trustee chooses year end No attribution!!!! Inter Vivos Top personal rate Calendar year end Attribution Estate Planning
  • 23. Taxation Trust is a flow through vehicle for tax purposes Income can be taxed in the trust or in the beneficiaries hands Trusts effective to split income Discretionary trusts give best tax effective opportunities Estate Planning
  • 24. Taxation of Estates & Tax Planning Strategies
  • 25. Capital Gains Deemed sale at Fair Market Value for all capital property at time of death Estate Planning
  • 26. Registered Plans Fully taxable in year of death Spousal rollover available Other limited rollovers Estate Planning
  • 27. Business Owners Estate freezing Capital gains exemption: Post mortem planning Multi discipline complex planning Estate Planning
  • 29. Taxation of worldwide income: Residency immaterial Value vs. Gains US has gift tax, estate tax on value, Worldwide Property Canada income tax on capital gains, only estate tax is provincial probate fees Estate Planning
  • 30. Guidelines: No US Estate Tax if WWP within Exclusion Amount for year of death If value of US property exceeds $60,000US US Estate Tax may be payable The greater the value of US property and WWP the greater the likelihood of US Estate Tax Payable Estate Planning
  • 31. All property owned by deceased wherever located 100% value of jointly held property unless contribution by other owners proved Includes assets not normally thought of as part of an estate different from probatable assets RRSPs, RRIFS, value of defined benefit plans Proceeds of insurance Assets in controlled trusts for benefit of deceased i.e. alter ego trusts Similar rules for US and non US citizens Estate Planning
  • 32. Strategies Do nothing Wait and see Look at planning strategies Divest US content Estate Planning
  • 33. Insurance as an Estate Planning Tool Estate Planning
  • 34. Use to pay capital gains taxes without selling asset recreational property (cottage), other personal use assets Preserve value of RRSPs Equalize distribution of assets Create wealth and enhance income on tax favoured basis Costs less than the tax Estate Planning
  • 35. Legacy Planning
  • 36. Charitable Giving One-time gift Community Foundation Life insurance designation Designation on RSP/RIF Estate Planning
  • 38. Estate Planning Get qualified advisors Your plan must fit you Anticipate the unexpected as well as the expected Carry through your planning to completion Review your plan every five years or when your life changes Carry through your planning to completion Make your plan flexible and appropriate Involve family members
  • 39. Why? 70% of wealth transition have been found unsuccessful Assists with transition Addresses potential conflict now Ensures wishes are communicated and (hopefully) understood Estate Planning
  • 40. Plan While You Can Not When You Must (or Cant) Estate Planning
  • 41. Plan While You Can Not When You Must (or Cant) Estate Planning
  • 42. Planning for your death doesnt accelerate its date. Not planning for it doesnt postpone it. Estate Planning
  • 43. Working with You Estate Planning
  • 44. The Process Detail what you want to do Review and inventory your assets Assessment of your estates tax liability Discussion of alternatives Package to go to estate lawyer Estate Planning
  • 45. Benefits Detailed and documented analysis of your estate for You your family your executors an estate lawyer Less time spent with lawyer = less cost to you Estate Planning
  • 46. Geoffrey Parker, CFA, CFP, CSA "Planning for Your Peace of Mind 905-470-9940,304 [email_address] Handing Down the Cottage