Dont Forget These Two Simple Steps When Estate Planning

Geoff Cook - CFP, CHAIP

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Strategic Estate Planning Barrie

The pure purpose of Estate Planning is to make an efficient transfer of wealth. 

Efficiency of Estate Planning is measured in two parts:

1) Tax: It is important to plan your estate in a way that will transfer wealth in a tax-efficient manner—setting up assets to flow so that the least amount of taxes possible needs to be paid.

2) Time: It is important to arrange affairs so that assets can be transferred quickly, requiring minimum time and effort from your executor.

There are several tools available to use for Canadians to help accomplish efficient estate planning. I want to keep this as simple as possible. When it comes to taxes and law, a lot of things are involved, and it is always important to verify with your advisors which strategies will work in your situation to make sure you are in compliance with the law. If you don’t have an advisor, get one! 

I am going to share two simple and basic strategies that can lower taxes and save time and money—two strategies that are often overlooked that can cost big bucks and lots of precious time.

Joint account with right of survivorship: Because the nature of a joint account is that you share an account with another individual, the survivor can take over the account as a sole owner if the other account holder dies. This allows you to transfer the account at death, avoiding probate tax and wasting no time at all. A couple examples of assets that can be held with joint ownership are:

- Home, Cottage
- Non- Registered Investment Accounts

Note: We do need to be careful when setting up these accounts to make sure that the account is being used by both parties and that intentions of ownership are made clear with our Estate Lawyer.

Naming a beneficiary: When you name a beneficiary for an asset, you allow that asset to transfer to someone without having to be verified by a will. As you can imagine, this saves a ton of time and because you’re avoiding the will, the asset does not need to pass through the will, and you avoid probate tax. Sometimes this can also help avoid paying income tax on an asset.

This can be done with registered accounts such as

- LIRA, or

And non-registered investments purchased through life insurance companies can also have a named beneficiary. Your options include

- Segregated Funds
- Life Insurance
- Annuities
- GICs from life insurance companies (commonly called GIAs or GDAs)

Over the years, I have heard a lot of horror stories where people haven’t taken these basic steps, resulting in a large tax burden and years spent by an executor trying to execute the will. In a recent example, I met with someone whose wife had failed to include a beneficiary on a $350,000 RRIF, and due to how the will was written, the executor was unable to roll over this account to the spouse, resulting in income taxes of $150,000 that could have been avoided with a simple beneficiary inclusion.


Infinite Financial is an independently owned and operated Financial Services company in Barrie, Ontario. We specialize in Life Insurance, Retirement Planning and Estate Planning.

Our Certified Financial Planners represent the major Banks, Investment, and Life Insurance companies in Canada. We pride ourselves in offering advice independent of any particular Life Insurance, Bank or Investment firm and based strictly on client’s needs.

Contact us today or stop by our office in Barrie to say Hello!

Infinite Financial places mutual fund transactions through Investia Financial Services Inc. and Life Insurance transactions through Bridgeforce. To learn more about these relationships - click here

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