Estate Planning Tips - July/August 2024 Prudent Money Coach Tax & Money Tips

Photo by Kate Russell on Unsplash

Greetings everyone! I hope you are enjoying your summer; I certainly am, as  the 2024 tax season is finally over!! It is now time for slower, warmer days. This newsletter is for July and August as I plan to take August off to get some rest.

I received a notification about the passing of a friend in June, and of a student at my child’s school in July, so I decided to pick estate planning as a topic for this time. 

What is estate planning? According to Investopedia, “Estate planning refers to the preparation of tasks that manage an individual's financial situation in the event of their incapacitation or death.” Source: https://www.investopedia.com/terms/e/estateplanning.asp

Or if I may put it in my own words: 
Estate planning is making a plan on what to do with your finances and yourself (your body/health) when you are incapable or when you die. Thus, this includes creating legal documents such as Will, Power of Attorney and Healthcare Directive.

Did you know that the Bible also talks about Will & Estate Planning? I was listening to an audio Bible some time ago and was surprised to hear 2 Kings 20:1, when God talked to King Hezekiah. Here is a quote from New International Reader’s Version: “In those days Hezekiah became very sick. He was about to die. Isaiah the prophet, the son of Amoz, went to him. Isaiah told Hezekiah, “The Lord says, ‘Put everything in order. Make out your will. You are going to die soon. You will not get well again.’ ” I thought “Wow, God does ask us to take care of our stuff before we die!”

So, here are this month’s tips.

• Create an emergency folder that contains important information such as your Social Insurance Number, health card number, bank accounts, insurance information, investment information, employer’s contact info (to inform your supervisor/manager of your death), your lawyer’s name and contact info, etc.

• Have a note in your wallet about who to contact in case paramedics or anyone has to search your wallet for ID, in case of an accident, for example. 

• Name primary and alternate beneficiaries on all your registered accounts (RRSP, TFSA, etc.), pension, insurance, and anywhere else you can name beneficiaries. These assets will pass outside of your Will and will save your estate some probate fees.

• What is probate? According to BC Province, “Probate is a process that verifies a will is real under B.C. laws.” Source: https://www2.gov.bc.ca/gov/content/life-events/death/wills-estates/probating-a-will

• Did you know that starting December 1, 2021, Wills can be signed and stored electronically in BC? Source: https://www2.gov.bc.ca/gov/content/life-events/death/wills-estates/make-a-will-week

• If you are getting your Will for the first time, I recommend you get legal advice because we don’t know what we don’t know. For example, I did not know that I should not use a person who has a non-resident tax status as my executor since my estate’s status will follow the executor’s status. So if my executor is a non-resident (for tax purpose), then my estate will be a non-resident and will be subject to more complex rules/laws.

That’s all for now. If you find the above tips helpful, feel free to share them with others. Let me know if you have suggestions for future newsletter topics.

​Enjoy summer while it lasts, wherever you are, and see you in September!