The Tax Chick Podcast Estate Planning 101 with Christine van Cauwenberghe
Sep 9, 2021
Christine van Cauwenberghe, Vice-President of Tax and Estate Planning at IG Wealth Management and author, shares her expertise on essential estate planning topics. She emphasizes the pitfalls of direct beneficiary designations that can lead to family disputes and tax surprises. Christine warns against the risks of joint ownership and highlights the critical importance of income tax liability at death over probate fees. With practical advice for blended families and the use of life insurance to ensure liquidity, she provides valuable insights for effective estate planning.
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Default To The Estate For Beneficiaries
- Treat direct beneficiary designations as risky defaults and prefer naming your estate unless you have a clear reason not to.
- Check designations regularly and document reasons with your advisors to avoid unintended consequences.
Income Tax Is The Real Estate Cost
- The "big tax" at death is income tax, often around the top marginal rate, and it dwarfs probate fees.
- Focusing on avoiding probate can cause far worse tax and family outcomes if income tax is ignored.
Don’t Name Minors Directly
- Never name a minor as a direct beneficiary because the public trustee will control funds until adulthood.
- Use trusts (via your will) or designate the estate instead to preserve your intended control.
