Most people generally recognize the necessity of having a well-prepared will. This ensures our final wishes with respect to our estate are carried out by an executor. However, a frequent oversight is the failure to undertake at least some degree of basic estate planning, in order to help formulate and complement the contents of the will.

Smart estate planning always includes life insurance coverage as it is usually the cheapest way to fund the final taxes that are triggered when passing away. While some retirees will have no need to pay the premiums of life insurance, many may find a “Last-to-Die” permanent policy desirable.

Consider this: a retiree owns a cherished family cottage, purchased many years ago at low cost, but now worth many hundreds of thousands of dollars. The estate will be taxed on this property’s capital gains. The heirs may not have the cash available to pay the large tax bill unless they first sell the cottage.

A “Last-to-Die” policy, available at surprisingly reasonable cost to healthy seniors, may be the solution. It can not only cover the taxes, but also preserve the cottage and other income producing investments as a legacy for the family.

In some circumstances, it may be advisable for a will to contain the terms of a Testamentary Trust. This provides for the establishment of a Trust which, upon the death of the grantor, is designed to hold the after-tax proceeds of the estate, invest, and over time, distribute its contents to the designated beneficiaries, in a manner specified by the grantor. A Testamentary Trust may have most application in situations where the beneficiaries are minors, or other dependants, perhaps with special needs and/or disabilities.

A Living Trust, also known as an “Inter Vivos” Trust, may be appropriate for those with a high net worth who, while still living, wish to share some of their wealth with members of their family, on a tax-effective basis. Acting on this will require professional accounting and legal advice.

These are just a few examples. A little forethought and effort will ensure that family and other heirs receive the benefits we wish to bestow on them, minimizing the tax consequences .