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Senior Finances 101: Basics of Estate Planning

Seniors who take a proactive approach to estate planning have the best ability to determine how their assets will be distributed after death. Waiting until cognitive issues or other challenges rear their heads could make it necessary for aging adults to entrust these decisions to others. Following are a few simple estate planning tips that seniors can put to use from leading Toronto senior care agency, Home Care Assistance.

Recognize the Need for Estate Planning

It isn’t necessary to own a slew of homes in order to take on the estate planning process. If seniors have any items of value that they would like to leave others, this process is essential. Any special directives that people have that aren’t put in writing are not likely to get carried out after they’ve passed away. Taking the time to complete this process will simplify the distribution of assets for surviving loved ones and ensure that everything goes exactly where it’s supposed to.

Draft a Will

All adults should have wills. If a will has been drafted sometime in the past, this document will need to be revised at least once every ten years in order to reflect any changes in assets, beneficiaries, and executors among other things. The will is the cornerstone of the estate plan given that it serves as an official declaration of how assets should be disbursed and how final affairs will be handled including burial preferences or other wishes that the testator might have.

Understand the Estate Tax System

Although Canada doesn’t have a true estate tax, so to speak, a final tax return must be filed during the year of death for the deceased including all income earned up to the time of death. One common exception to this tax rule is when assets are passed on to a living spouse or partner. Working with a financial advisor is a great way to learn more about these laws and their implications for any items of value that will be transferred to others. It is also an important step in ensuring that these gifts have a positive impact on loved ones.

Decide How Monies Will Be Spent

Estate planning also gives seniors the ability to determine how their remaining monies will be spent. The most common method of doing this is by supplementing a will with a trust. For instance, some seniors may want to reserve funds to help cover the college costs of their grandchildren or to pay for any special needs that other family members might have. When there are more assets to disburse, trusts provide an easy way to ensure that these assets are used wisely.

When creating an estate plan, it’s also important for your senior loved one to make provisions for long-term care in the event he or she can no longer manage all self-care responsibilities on his or her own. If you have questions about the types of care available for your loved one, call Home Care Assistance at (416) 488-8777. We offer hourly and live-in care, as well as stroke, dementia, and Alzheimer’s care for seniors in Toronto, ensuring your loved one has the right support to age safely in the comfort of home. Call us any time of day or night. We are available 24/7 to answer questions or schedule an in-home consultation.