Estate planning is the process of preparing for the disposal of a person's wealth and assets after death.
An essential goal of Estate Planning is to reduce the impact that liabilities will occur at death. Most people aren’t aware of the impact of these taxes and fees.
For example, a list of these taxes and fees might include capital gains and income taxes on investments, RSPs/RIFs, probate fees, executor fees, legal fees, accounting fees and funeral expenses. In some cases other fees may arise such as appraisals, auctioneers and real estate fees.
Life insurance is a tool that many people utilize to help pay some of these taxes and fees; in other words to help preserve the value of an estate. In addition, life insurance can be used in other ways such as “estate equalization.” For example, perhaps you leave your home or cottage to a son or daughter and provide the life insurance benefits to another. As a grandparent, you may provide life insurance to pay for your grandchildren’s education.
Many Canadians successfully use life insurance as an investment that provides certain guarantees for their Estate Planning needs.