Your Financial Future
The objective of much of what we do today is to improve our future financial position. As with anything, we can get better results by following a plan. Therefore, both an Estate Plan and a Financial Strategy are important for those who want to ensure better tomorrows for ourselves and our families.
A Financial Strategy focuses on what we want to happen 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. For example, how much income do you want your widow to have? If you want your family to have a debt- free estate, how much is needed to pay off your debts? Some income taxes are triggered by death. How much tax will your heirs have to pay before they can inherit?
If you have a business interest, 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?
After you decide on the things you would like to see happen, you can begin figuring out how to improve their chances of this happening. 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. 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 may be of the right type for your heirs and you want to preserve them from the tax collector and other creditors. What you need is a method of creating instant, adequate cash at death to satisfy the vultures.
Some of us may discover that we do not have enough 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 is one of the best ways to help in this situation.
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. Then you can try to avoid those risks 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?
Your Financial Strategy
Once you have sketched out your Estate Plan the next step is to decide how to achieve the desired outcome. Hence the Financial Strategy. Unfortunately, many people start out with the Financial Strategy. That is like setting off on a trip and having no idea of where you are going, you just start driving.
Once I know where you are trying to go, i.e. the Estate Plan, I can then help you design the route to get to get there, i.e. the Financial Strategy.
Call me today to book an appointment to review your current Estate Plan and Financial Strategy or to begin the process of developing both.
Visit myfinancialsolutions.ca, my business website, for additional financial information on insurance, retirement, estate planning, investments and whole host of other financial topics.
