Estate Planning Introduction

Estate planning is an important aspect of family financial and future planning. Estate planning is about deciding how you distribute your assets and provide for the people who you care about. There are a number of important things to consider when preparing an estate plan, especially if you are intending to support a loved one with a disability.

Click here to access a Worksheet that will help you record some important information.

Estate Planning Considerations and Options

You have several options for deciding how and when to distribute your assets:

The most commonly known option is through a Will. A Will distributes your assets only upon your death and has no impact on your estate until you die. Spouses should each have their own Will.

You can also distribute assets at the time of your death but outside of your Will. This happens when you own assets jointly with another person who has a “right of survivorship”. This can include assets such as a home, other real property, or a bank account. Upon your death, the other person who has the “right of survivorship” will automatically own the jointly owned asset. Your Will has no effect on the distribution of the asset.

Another way of distributing assets upon your death (but outside your Will) is through a beneficiary designation. This usually happens with assets such as RRSPs, RRIFs, insurance policies or pension plans. A person who is named as a beneficiary will be entitled to receive the asset upon your death.

You may need to think about the consequences (e.g., the effect on government benefits and the person’s ability to manage money) of leaving assets directly to a family member with a disability using these estate planning options.

A third estate planning option is the distribution of assets while you are still alive. This can be done by giving “gifts” of money or other property to others before your death. It can also involve establishing a trust for a loved one while you are still alive.

Keep in mind that estate planning is a process rather than a one time event. You may use a combination of the options discussed above. You should also be prepared to review your estate plans regularly (for example, every 2 years) to determine if changes need to be made.

Additional Considerations when Planning for a Family Member with a Disability

When preparing an estate plan to provide for a family member with a disability, there may be some important issues to consider, including:

How can an estate plan help to provide a good standard of living for a family member with a disability?
Will your family member with a disability have opportunities to earn an income and to support him or herself?
Will your family member be able to manage money or other property that he or she may inherit?
Will your family member need to maintain his or her eligibility for government income benefits or other services? If so, how can your estate plan most effectively maintain and supplement these benefits and services?
Will your family member need help with housing or maintaining a home?
Creating a Will

A Will is an important component of an estate plan. It is a legal document that only takes affect at the time of your death. You can make or change your Will up until the time you die so long as you are able to understand what assets you own and what you are doing with a Will (that is, signing a legal document to distribute your assets).

Remember, a Will deals only with estate assets that have not been distributed through other means. A Will allows you to appoint an executor who will look after your assets upon your death and to give directions to your executor on how those assets should be distributed.

Before you use the services of estate planners/lawyers there are a number of things you can do to be better prepared:

Prepare a list of your assets and liabilities. For any family assets, you should record who owns them and how they are owned. Also, make a list of assets or insurance policies for which you have already selected beneficiaries. Your lawyer will need to know if you have named your family member with a disability as a beneficiary of assets (such as a RRSP or an insurance policy).
If possible, identify your executors and trustees. You may wish to get some more advice on how best to select people for these roles and whether it makes sense to use financial institutions, family members or friends, or a combination of these possibilities.
Identify how you would like to distribute your estate assets. There may be a lot involved with these decisions and you may need professional help to work out the details. You may want to give people (or charities) specific amounts of money or other property you own or decide who should get a share of your estate.

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