Tips for Estate Planning & Retirement

If you are nearing retirement, congratulations! Retirement brings an opportunity to evaluate your plans for your next chapter. Below are a few points to keep in mind while approaching retirement:

1. Registered Investments. As part of your many years of work, you may have accumulated assets in registered investments such as RRSPs or TFSAs. Do you have beneficiaries named on those accounts? Have you checked if you can name contingent beneficiaries (in case your primary or named beneficiary cannot receive these funds)? A named beneficiary will generally receive the account’s value without it passing through your estate. This can be a strategic way to reduce probate fees or even avoid the need to probate your estate altogether. One word of caution: if your beneficiary is not your spouse, be clear if you want the beneficiary to receive these funds as a gift. If not, the beneficiary could be deemed to hold the value of the account for your estate and would then be subject to probate fees.
2. Your Home and Your Estate Plan. You might move as part of your retirement, which brings an opportunity to consider your home ownership. If you have a spouse, you will likely want to own your home as joint tenants, so that your home passes to the survivor without falling into the estate of the deceased spouse. This can create significant savings on probate fees and possibly eliminate the need to apply to the court for probate for the estate of the deceased. If you do not have a spouse, you may be tempted to add another person to your home’s title to avoid probate fees when you die, but a word of caution: adding someone else to the title, such as a child, can put your home at risk for claims by their creditors, or by a former spouse if they go through a separation or another family law proceeding.
3. Keeping Your Estate Plan Up to Date. It can be daunting to try to imagine the future. To keep the process manageable, consider planning based on the information you have now, and committing to reviewing your plan after major life changes and every 2-3 years thereafter. As life evolves, you may find that the best people to help you if you can’t make decisions for yourself might also evolve and change, which is okay! As long as you have the capacity to name new individuals, such as a new attorney in your power of attorney to help you make financial and legal decisions, a new representative in your representation agreement to make healthcare or personal care decisions, or a new executor to administer your will, you can make changes. The key is to review your documents regularly so they are ready and reflect your most recent wishes.

There are many different scenarios that can affect how you plan your estate. What’s most important is that your plan is the right fit for you. Many families are blended or have other complexities that require sensitivity and extra planning. Retirement is one of life’s milestones and an excellent time to revisit your estate plan.