Almost every family has some difficult issues to consider when preparing estate plans, but those who are particularly wealthy may have additional considerations. Many wealthy Ontario families hand over estate planning decisions to financial advisors, but it may be beneficial to take a closer look at their recommendations before finalizing a strategy. This attention will not only help families identify their best options, but also ease the estate administration process later on.
One common tactic used by wealthier individuals is to divide assets before passing away by using an estate freeze. Other tax minimization tactics can also be considered. For those with many assets, taxes should be top of mind when planning estate administration.
Life insurance is also a good consideration. Not only can this protect family interests, but it can also manage business risk and tax costs. However, affluent individuals in Ontario may find it more efficient to self-insure. Ultimately, weighing options is critical here.
Finally, family structure and governance is a critical consideration. Many wealthier families have their finances structured in complex ways, including multiple family trusts or holding companies. Communicating with all members on each holding, as well as who is entitled to manage it before and after a death, will help the process.
Overall, it is important that Ontario families review wills and estate planning options carefully. While it can be tempting to leave the job to a trusted financial advisor, understanding the pros and cons of all available options and communicating across the family will help enable a smooth estate administration. Working with other estate and tax professionals, including a trusted lawyer, can also support this process.