Estate Planning

Estate planning simply means the orderly arrangement of one's financial affairs to maximize the value transferred upon one's death to the people and/or institutions chosen by the deceased. This occurs with minimum loss of value due to taxes, lawyer and executor fees, and forced liquidation of assets.

Plater Financial Inc. advises clients to make informed, educated decisions about their estate. The first step toward proper estate planning is to understand the real cost of estate distribution, how to ease the burden on the executors, and common concerns about estate planning.

What is involved in settling an estate?

The first issue clients should consider is the specifications of their will. Wills must be up to date, clearly written, and allow for the flexibility of a living will, and state powers of attorney.

Being informed about the distribution and costs involved in drafting and executing a will is also an advantage. Probate tax, executor fees, law firm fees and accounting fees can all significantly impact one's estate in Ontario.

For example, probate taxes in Ontario are .5% for the first $50,000 of an estate and 1.5% thereafter.

Executor fees can also be costly, as executors are allowed to charge a fee of 2.5% on capital receipts, 2.5% on disbursements, 2.5% on revenue receipts, and .4% annually on estates that are not settled in a timely fashion.

Law firms will charge arbitrary fees to handle executor and legal duties of the estate. In addition, there may be accounting fees for calculations of capital gains and complex tax issues.

Reducing Fees and Settling Estates Quickly

The Insurance Act

Utilizing the benefits of the Insurance Act can help to reduce fees. The Insurance Act allows contracts, issued by an insurance company, with a named beneficiary to bypass probate tax, legal and or executor fees. Preferred beneficiary designations are generally not disputable by creditors or the Succession Law Reform Act, and funds are paid out immediately upon receipt of a death certificate.

Clients can also ease the burden on executors by consolidating assets into investments that bypass the estate. Keeping an up-to-date will, having an appointed power of attorney, pre-arranging and pre-paying for funeral services, and having frank discussions with executors can also help provide a smooth execution of one's estate.

Common Concerns

Individuals should be aware of the differences when purchasing financial products through banks, trust companies and other financial institutions. First, many take a "cookie cutter" approach in their recommendations. For example, we often meet with individuals who have been advised to use joint ownership of assets as a tax planning strategy. This can, in some situations, lead to a loss of control, exposure to creditors and tax issues. Second, beneficiary designations on investments are available on registered products only, and there is a risk to the estate if the beneficiary is not your spouse.

As insurance contracts, investments purchased through an insurance company have distinct advantages. First, Plater Financial will make the most appropriate recommendations for each situation. For example, joint ownership is only advised in certain circumstances because when you purchase life and financial products through an insurance company, all assets pass directly to a named beneficiary if other than the estate.

Another legitimate concern regarding estate planning is the perception that family members would not argue about the transfer and division of the deceased's estate. Too often, however, animosity is created between family members when wills that are probated become public knowledge

By taking advantage of contracts that fall under the Insurance Act, proceeds are paid out promptly and without probate tax, legal and executor fees. Proceeds are generally not subject to the Family Law Reform Act, and wills remain confidential. This can prevent much animosity between family members.

How Can Plater Financial Inc. Help?

Plater Financial Inc. can assist in portfolio consolidation, and provide solutions that protect the value of our client's estate. We can assist in estate equalization and participate in intergenerational wealth discussions, and can also help to ease the transition of funds immediately following the client's death.

Plater Financial Inc.
504 Woodrowe Avenue
Sarnia ON N7V 2W2
By appointment only
Email: Click here.
Phone: (519) 383-5138
Toll Free: 1-866-822-8514
Fax: (519) 337-2303