Arranging the smooth transfer of assets to heirs can be a challenge for many reasons.1 (Manulife Nov. 2021)
The first one relates to time. Often, probate is required before instructions can be carried out and your beneficiaries can receive their inheritance – and the process of obtaining probate can be a lengthy one, frequently taking 6 to 18 months, or longer if it’s contested.
Secondly, probate and estate fees will significantly erode the value of an estate, reducing the amount of money your beneficiaries receive.
Third, many clients want to protect their privacy of their bequests but the probate process leaves the details of an estate open to public scrutiny. In addition to disclosing your financial assets, this may provoke conflict among loved ones.
Lastly, your heirs will likely be dealing with a powerful mix of emotions throughout the estate settlement process.
Failing to consider any of these four factors – time, expenses, privacy, and emotions – may lead to unnecessary delays, financial consequences, and disputes. However, there are steps you can take to help your loved ones receive their inheritance quickly, cost-effectively, confidentially, and with minimum strife.
This illustration below is for illustrated purposes only and is a sample scenario.
Here is an example of Samantha using an insurance-based Investment called a Guaranteed Investment Fund (GIF)
Samantha invests $1,000,000 in a non-registered GIF contract and names a beneficiary. Samantha passes away 10 years later. Her portfolio value is $1,582,949. Her investment bypasses her estate and probate and is paid directly to her beneficiary.
Furthermore, there are no estate administration-related costs. Her income taxes are $116,590. Her beneficiary receives $1,466,539. They should receive this sum from the insurance company within 10 business days of written notification of death. Also, Samantha’s privacy, as well as that of her beneficiary, should be protected from the curiosity of strangers and other heirs, reducing family disagreements.
All of this helps make sure that more assets are transferred to loved ones – which is often an important objective of estate plans.
For more information on this and other benefits, please let us know if you require further information.
Mike Busby (20-Jan-2022)
THE COMMENTS CONTAINED HEREIN ARE A GENERAL DISCUSSION OF CERTAIN ISSUES INTENDED AS GENERAL INFORMATION ONLY AND SHOULD NOT BE RELIED UPON AS TAX OR LEGAL ADVICE. PLEASE OBTAIN INDEPENDENT PROFESSIONAL ADVICE, IN THE CONTEXT OF YOUR PARTICULAR CIRCUMSTANCES. THIS ARTICLE WAS WRITTEN, DESIGNED AND PRODUCED BY MIKE BUSBY FOR THE BENEFIT OF MIKE BUSBY WHO IS A FINANACIAL ADVISOR FOR BRANDON LINDSAY INSURANCE AGENCIES, A TRADE NAME REGISTERED WITH INVESTIA FINANCIAL SERVICES INC., AND DOES NOT NECESSARILY REFLECT THE OPINION OF INVESTIA. THE INFORMATION CONTAINED IN THIS ARTICLE COMES FROM SOURCES WE BELIEVE RELIABLE, BUT WE CANNOT GUARANTEE ITS ACCURACY OR RELIABILTY. THE OPINIONS EXPRESSED ARE BASED ON AN ANALYSIS AND INTERPRETATION DATING FROM THE DATE OF PUBLICATION AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. FURTHERMORE, THEY DO NOT CONSTITUTE AN OFFER OR SOLICITATION TO BUY OR SELL ANY SECURITIES. MUTUAL FUNDS OFFERED THROUGH INVESTIA FINANCIAL SERVICES INC.