Designation of Beneficiaries & Registration of Assets

Some estate planning strategies are relatively easy to implement. The designation of beneficiaries and registration of assets in a certain manner may facilitate some of your estate planning objectives. However, care should be taken prior to implementing these strategies as you need to consider your overall goals. Prior to undertaking any changes to your financial affairs, you should seek the advice of experts, such as tax, legal and financial advisors.

Not all investments allow for the naming of beneficiaries. Key investments in your portfolio that do facilitate this opportunity are insurance policies, Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs). By naming a beneficiary on these accounts, especially if it is your spouse, you are simplifying the estate planning process.

In the case of life insurance policies, insurance proceeds are paid directly to named beneficiaries, tax-free and by-pass the probate process. Designating your spouse as beneficiary of your RRSP also allows a rollover of your assets to your spouse's plan. This process will allow your spouse to continue to defer taxes until he or she withdraws the funds. Additionally, the assets will be excluded from your estate. On a regular basis, you should discuss the advantages of naming beneficiaries with your advisors to ensure you are achieving the maximum benefit possible from your estate planning strategies.

Arranging for registration of assets in joint name, with rights of survivorship, enhances some estate planning strategies. If an asset is registered in this manner, the surviving owner automatically becomes the sole owner. By naming any other individual as a joint owner, you are essentially giving ownership of a portion of the asset to that other person or persons. There are many potential tax consequences of transferring property to another person. Prior to undertaking a strategy of this nature, you should seek professional legal and tax advice.

Estate planning strategies range from simple to complex. However, even those that appear easy to implement may have long-term consequences to your estate plan. You need to consider all potential ramifications of your actions prior to undertaking any changes in your plans. A CIBC Wood Gundy Investment Advisor will be able to assist you to determine which strategies may help you to achieve your goals.

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