by Pam Mundell, CFP, CLU, CHS

Whether you are refreshing your plan or starting from scratch-ask questions that will spell out clearly what you want.

Estate planning is definitely not on the top-10-list of most people. It can be emotionally draining for us to think about what will happen when we die. But if you think about what you have accumulated over the years, your best approach is to frame it as another business decision that will help secure your goals. It never hurts to be reminded of some simple todo’s when it comes to this technically and possibly emotionally, charged discussion. These are estate planning tips from the investment professional, not a lawyer. Creating an estate plan is a very important process that can originate with a financial planner and complete with a family lawyer. Therefore, my number one tip is to engage the services of a lawyer who specializes in family law to prepare your Will or update an existing Will. This will incorporate any changes or considerations, which arise from the estate planning process you have with your financial planner.

Why consider an estate plan?

The first step would be to determine if you (and your spouse if you have one) have enough income— enough money and assets to provide you with the income and funds you need to provide a comfortable and financially successful retirement. If the answer to that question is yes, then your next step would be to consider an estate plan to successfully transition your assets to your loved ones.

Don’t leave it too late

Please don’t wait until you have health issues or are over the age of 80. You will have fewer choices and fewer options for effective estate planning strategies.The sweet spot for this exercise is between 60 and 75 years of age.

Who do you want to be the beneficiary?

Seriously think about who you want to receive your assets. Do you have children and/or grandchildren, other family members or perhaps a favourite church or charity? Assets can pass efficiently from one spouse or common law partner to another at death, but once the last spouse has passed, many assets flowing to the next generation or family member will create a tax liability to the estate. Revenue Canada will get a portion of your estate. It’s up to you to plan to ensure that Revenue Canada does not receive more than a fair share of your estate.

Speak up!

Voice your wishes and plans now with your spouse, children and/or family members that are executors, power of attorneys, trustees and/or beneficiaries. Ask family members what they want and value. If a cottage or vacation property is part of your estate, then find out which family member would like this asset. Second properties will often trigger a significant tax liability to the estate. Will the estate have other financial assets to pay this tax liability? Or will your estate need to sell the cottage or vacation property to pay the taxes due.

Life insurance

Do you have life insurance to cover your final expenses? Do you have enough life insurance to pay the income taxes for the estate? If you are married or in a common law relationship consider ‘joint last to die’ life insurance. Adding two lives together creates a wrinkle in life insurance premiums (my opinion) based on actuary rates. The rate of return on a ‘joint last to die’ life insurance policy can be excellent and more importantly provides tax free funds to the estate when the estate needs money for final expenses and the tax liability. Even better, consider life insurance for a favourite church or charity and provide the estate with a large tax deduction to offset the often significant, tax liability to the estate. This is a win-win strategy for everyone. You pay insurance premiums to create a legacy for a cause or charity you feel passionate about and want to support. The charity receives a bequeath to support charitable work, your estate gets a significant tax deduction to reduce the income tax owed and your beneficiaries receive more of the assets from your estate.

Consider each asset carefully

Examine the strengths and weakness of each financial or personal asset you have, in order to determine which ones you should try and use up in your lifetime. Registered Retirement Savings Plans (RRSP) and Registered Retirement Income Plans (RRIF) are excellent plans for accumulating assets and creating a retirement income. Both have named beneficiaries and can pass tax efficiently to your spouse or common law partner. If you do not have a spouse or common law partner or if your partner has pre-deceased you and subsequently you name your adult children as named beneficiary, then this asset will be included in income, in the year of death and can create a substantial tax liability to the estate. You want to spend every dollar in your RRSP and/or RRIF during your lifetime. The Tax-Free Savings Plan (TFSA) also has a named beneficiary and if you name your adult children and/or grandchildren then all of this asset will pass to your beneficiaries’ tax free. Investment gains, dividends and income earning in the TFSA do not attract income tax while in the plan nor when removed from the plan, nor when the plan is passed on to your beneficiary.

Simplify your estate with life insurance investments

Life insurance investments, both segregated funds and GICs, can bypass your estate upon death. Proceeds can be paid directly to your named beneficiaries without being subject to the estate administration/probate process and associated fees. This allows you to leave assets quickly, privately and cost-effectively.

Final Thoughts…

Creating an estate plan is a very important process to help you clarify your final wishes. There are many more possible estate planning considerations based on each person’s unique set of circumstances. Seek guidance from a trusted professional, ask questions and explore all of your options.


Pam Mundell is a licensed investment fund advisor and independent life insurance broker and the principal of Pam Mundell Financial Planning Services in Kingston, Ontario. She can be reached for questions or comments at or (613-417-7117). 


(Republished with permission from