Simple estate planning

At a difficult time, it's important to keep things simple

Why do people do estate planning? There are lots of reasons: maximize the value; minimize the taxes; include or exclude a specific person; support a charity…

There are many complex and expensive ways to achieve these and other objectives. But for most people, objectives are simple, and so should be the solutions.

My estate planning goals, for example, can be easily summarized: to be fair — so that hopefully when all is said and done, my children will still speak to each other; and to do what I can to ensure that whatever is left is put to good use, and has some lasting benefit.

When working on an estate plan recently I came across a little-known strategy that can be executed through an insurance company.

It starts with investments available from insurance companies. This could include vehicles such as annuities, insurance policies, segregated funds, and GICs. In many ways these investment products are similar to their non-insurance counterparts: GIC rates, for example, are competitive with bank GICs, and are covered by insurance up to $100,000. Segregated funds as well, like mutual funds, come in a variety of shapes and forms. But there are some key advantages to both of these.

To begin with, there is the ability to name beneficiaries. Rather than the proceeds of these investments going through the estate, you can elect to have the funds pass directly to those who you name as your beneficiaries — without delay. Right out of the gate there is a savings that could easily exceed two per cent, when you consider the probate fees as well as the legal fees typically associated with settling an estate.

But there is more. Some insurance companies will also allow you to stipulate in their contract how the beneficiaries will receive the funds. For example, an annuity might be an option. So rather than receiving a lump sum (that some parents fear might be squandered), the beneficiary would instead receive a monthly income for a specified period of time, or for life. The amount of income can be fixed, or can be indexed. Or, in the case of at least one company, the level of income can be tied to the performance of the stock and/or bond market.

As far as I know, the only other way to ensure such an outcome would be through a trust — a document that is complex and expensive to set up and maintain. Instead, by completing a simple form through an insurance company, your wishes could be met, and it wouldn’t cost you anything.

For more information please feel free to call or e-mail.

  

 

Jim Grant, CFP (Certified Financial Planner) is a Financial Advisor with Raymond James Ltd (RJL). This article is for information only.  Securities are offered through Raymond James Ltd., member CIPF.Insurance and estate planning offered through Raymond James Financial Planning Ltd., not member CIPF.  For more information feel free to call Jim at 250-594-1100, or e-mail jim.grant@raymondjames.ca. and/or visit www.jimgrant.ca.

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

New BC Cannabis store opens up shop in Parksville

Outlet at Wembley Mall open seven days per week

‘We could see fire all over the landscape’: Parksville man recounts helping crews in Australia

Kevin Cochrane of the Coastal Fire Centre spent 38 days Down Under

Remote surveillance helps RCMP nab suspect following Parksville break-in

Stolen items returned after business owner takes quick action

PQB News editor battles cancer through pioneering treatment

Vancouver Island rallies around JR Rardon and family during stay in Seattle

Port Alberni man arrested after police seize suspected illicit drugs in Nanoose Bay

Car stopped, impounded after driver clocked travelling at more than twice the posted speed limit

VIDEO: Rare ‘ice circle’ spotted on Kamloops river

An ice circle or ice pan, has formed in the chilly waters just east of the Yellowhead Bridge

Uber, Lyft approved for ride-hailing in Lower Mainland

Kater Technologies Inc.’s application was rejected

B.C. man rescued after getting trapped headfirst in well as water level rose

The rescue involved crews from Oak Bay and Saanich

Investigators in wildfire-torn Australia head to site of B.C. airtanker crash

The B.C. government sends condolences to Port Alberni-owned Coulson Aviation

RCMP investigating sexual allegation against Lower Mainland police officer

Delta officer suspended while the alleged off-duty incident involving a co-worker is investigated

Former Mountie, sports coach convicted of sex abuse in B.C. granted day parole

Alan Davidson was sentenced to almost six years for abusing seven boys in the late 1970s and early 1990s

VIDEO: Person in wheelchair narrowly avoids collision with car in Kelowna

There were no injuries in the scary looking near-accident last week in Rutland

Here’s what Canada is doing to stop the coronavirus from getting in

Health officials are monitoring multiple possible cases in Canada

B.C. still struggling to control non-resident medical care fraud

Unpaid bills, out-of-province claimants a costly legacy of MSP

Most Read