Have You Planned For Your Financial Future?
Much of what we do today is designed to improve our future financial situation. This is a short-term focus and has long-term consequences. As with anything, we can get better results by following a plan. Without a plan your reactions to World and personal events can have very ‘knee jerk’ consequences. Therefore, both an Estate Plan and a Financial Strategy are important for those who want to ensure better tomorrows for themselves and their families.
A Financial Strategy focuses on what we want to happen and when, while we are still alive. Estate Planning is concerned with what we want to happen here on earth after our death. It is best to start with the Estate Plan because no one knows how soon it will be needed. Also, a well thought out Estate Plan provides direction for the development of your Financial Strategy.
Your Estate Plan
The first step in planning your estate is to decide what you want to happen to the people you care for after your death. Your WILL is a necessary precursor. It is imperative before anything else can be executed. For example, how much income do you want your loved ones to have? If you want your family to have a debt-free estate, how much is needed to pay off your debts? Do not forget there are many income and other taxes that are triggered by death. How much tax will your heirs have to pay before they can inherit the assets in your estate?
If you have a business, do you want it to be sold or retained? If it is to be sold, who will buy it? What will be needed to guarantee the sale? If you want it to be kept in the family, who will run it? What will they need to keep it going?
Your Financial Strategy
After you decide on the things you would like to see happen, you can begin figuring out how to improve their chances. Some of your decisions can be written in your Will, as directions to your successors. Others may need special written Agreements with other people to make sure that they will happen.
Some assets will be in the wrong form to do what you want. You may want to decide to convert them to another form at your death or before. For example, an interest in a private business could be converted to cash by means of an Insurance-Funded Buy- Sell Agreement.
Some of your assets, in their current form, may be appropriate for your heirs and you want to preserve them from the tax collector and other creditors. What you might need is a method of creating instant, adequate cash at death to satisfy the estate liabilities, hence the need for life insurance.
Some of us may discover that we do not have enough assets to leave our family in the position we would like them to be.
We then need instant cash at death to create our estate. Life insurance can be a relatively cheap solution to create the estate cash to pay the estate liabilities and to create estate cash assets that can be bequeathed in you Will.
A sad fact is that many people will spend more time planning a vacation or dinner party than their financial future.
Your trip to your financial future deserves at least equal concern about the risks ahead. You can then try to avoid those concerns or offset their adverse consequences. Is your financial vehicle in good condition? Will there be enough cash or income to offset such common risks as death, disability, or serious illness? Have you reviewed your financial trip insurance lately?
Stop procrastinating and call to arrange an appointment for a financial reality check. We will help you design an appropriate Estate and Financial Plan.
Visit myfinancialsolutions.ca, my business website, for additional financial information on insurance, retirement, estate planning, investments, and a whole host of other financial topics.