You can be the richest person on the planet, but no matter how much money you have, you can’t take it with you when you die. That doesn’t mean there’s no advantage to having money after you pass away, though; you can give your assets to loved ones - friends, your spouse, your children, your parents, a charity - whoever. Plotting out what will be done with your finances after you die is known as “estate planning”, and it’s quite complicated. More complicated, in fact, than what we’ll be able to cover here. Instead, we’ll do a brief overview of various estate planning tools - what they do, who they might be useful for, and how to learn more about them. The best way to get good advice on estate planning for your particular financial situation is to talk to financial and legal professionals, like your lawyer and your accountant.
The will is probably the most well-known method of estate planning. Your will contains information about how you want your estate to be divided up. It’s important here to consider what, exactly, an estate is: it’s the tally of your assets and liabilities. This means that if you haven’t paid off creditors, they will need to be paid with your assets before you can give them to family members. The best way to create a will is to do so with legal help; you’ll have to pay legal fees, but having an attorney write your will with you will ensure that your wishes are followed.
You don’t need to have a will to have your estate divided when you die, but having one is the best way to ensure the estate is divided the way you would like it to be. An executor is someone who is named to handle and distribute your estate. When there is no will in place in Manitoba, next-of-kin within the province may ask to be made executor of the will; if all other next-of-kin renounce their ability to become executor, that person is made executor. When there are no willing next-of-kin in the province, the estate may be handled by the Public Guardian and Trustee (PGT). There a number of things you should know about wills in Manitoba; as there is too much information to describe here, we’ll direct you to the Deceased Estate Handbook. Those who are not residents of Manitoba should know their provincial laws may differ; for the appropriate resources for your province, see Provincial and Territorial Resources on Estate Law.
Life insurance is not technically a part of your estate, but it is key to estate planning. Life insurance triggers upon your death, and pays out to the beneficiaries you’ve selected. Whether or not life insurance is “worth it” is a matter of constant debate between financial planners; generally speaking, if you have a family that relies on your income, and your death would leave them without the resources to live, you might consider life insurance. That said, if you have sufficient savings, you might not need it. This should not be taken as financial advice; you should consult with your accountant, your family, your insurance broker, and other entities who have your best financial interest in mind, before choosing a life insurance policy.
Trusts offer a number of legal protections and options that might not be available through wills. Trusts can be paid out when you are still alive to the beneficiary, or after your passing; it depends on the type of trust you take out, and the stipulations you place on the trust. Generally speaking, trusts aren’t as worthwhile unless you are fairly wealthy; again, this should not be taken as financial advice, and you should speak to lawyers and accountants to find out if there’s a particular type of trust that works well for your financial situation.
Gifts, while you are alive, can be an incredibly practical way of ensuring the financial security of your loved ones. Estate taxes can be charged on money gifted after your death, but cash gifts given while you are alive don’t undergo special taxation; this means it’s often more practical to give away your money while you’re alive. To understand more, check out this article on cash gifts; the fact that they are not taxed as income has a plethora of advantages.
Here at Alterna Cremation, we strive to go above and beyond traditional direct cremation services; we want to provide you with as many resources as possible for planning for death, coping with death, and funeral planning. We’ll continue to update this blog with information you’ll find valuable. Always remember to consult with financial professionals at every step of your estate planning process, and make sure that your executor is ready and willing to execute your will; never be afraid to update your estate plans when your circumstances change.