Estate Planning

10 asset protection strategies

There are two guarantees in life, death, and taxes. So how can you reduce the odds of having a lot of taxes at death? Here are ten estate planning tips for asset protection.

  1. Have a current will that is properly registered.
  2. Have an enduring power of attorney and consider a health care representation agreement to ensure you will be provided for in case you can no longer manage your affairs
  3. Reduce the size of your estate! Why, because it will reduce the probate fees you pay. Place assets in joint tenancy and designate beneficiaries of your life insurance and RRSPs. A simple tip is if you buy GICs, buy them through a life insurance company that has competitive rates and name a beneficiary on your GICs. This also includes segregated funds which are essentially mutual funds sold through life insurance companies. This will bypass probate for you.
  4. Make gifts during your lifetime.
  5. Having a spouse. Take advantage of spousal rollover provisions in your will and RRSPs or RRIFs
  6. Create an educational trust for grandchildren so they have funds directly from your estate. This will avoid the attribution rules that would apply if the funds went to their parents and then onto the grandchildren.
  7. Use life insurance to fund the tax liability your state will face. By naming beneficiaries through life insurance segregated funds and insurance company GICs, you can avoid probate fees and wills variation act claims since it is not part of your estate and not a matter of public record.
  8. Charitable gifts are deductible against your final year’s income and the year before to a maximum of 100%. You can even give your RRSPs to offset the tax payable on RRSPs and RRIFs.
  9. Get a qualified financial advisor, accountant and or lawyer to advise on your estate.
  10. Finally, make sure you discuss the plan with your executor(s) to make it easier and give you peace of mind.

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