While most people think about retirement planning when it comes to the overall financial planning process, planning for what happens past that point is sometimes forgotten or put off. However, taking some time to put together a robust estate plan can save next of kin time and stress, but also sometimes money in the form of taxes. Here are some of the key moves British Columbia estate planners can make to reduce the tax burden on beneficiaries:
- Prepare powers of attorney: Most people have two powers of attorney, one for health and one for finances. Naming these individuals and communicating with them in advance can help make the process easier for all involved should someone else need to take over affairs, ensuring no steps are missed with regards to taxes.
- Pick the right executor: An executor has a significant fiduciary duty, and his or her actions can have a significant impact on beneficiaries of a will. Someone who is financially savvy, trustworthy and has the time and attention to give to the job is very important. Other considerations include the location of the executor, as a non-resident executor can create tax concerns.
- Consider how best to structure accounts: The most tax savvy way to pass down wealth will vary from individual to individual. For some, joint accounts or joint ownership on property may be the way to go. For others, trusts make things easier and more affordable in the long run, despite the initial expense. Speaking to people with expertise in this area can paid dividends in the future, as well as making the estate in administration process ultimately easier.
When it comes to estate planning, there are many things to consider that can vary greatly depending on an individual’s situation. But, for most, the goal of estate planning is simple: leave next of kin with the maximum assets for minimum amount of trouble. Having an estate plan that is legally sound is important in achieving this overall goal. As such, it is advisable to speak with a British Columbia estate planning lawyer when making these decisions and putting the documentation in place.