Estate planning is an essential part of comprehensive financial planning. The orderly distribution of assets to beneficiaries, payment of creditors, and minimization of taxes is a key objective for most persons who have significant assets. Click on Estate Planning - Creating and Preserving an Estate for more information on this topic. You can also click on Estate Maximization to find detailed information on maximizing estates and reducing taxes, particularly the taxes of beneficiaries.

It is very important to have an updated will. Dying intestate (without a will) can create tremendous difficulties for your heirs or beneficiaries. For a description of the difficulties created when you don't have a will, click here on this link: Dying Intestate Without a Will. For a description of things to consider when drafting a will, click on this link: Issues to Consider When Drafting a Will. For a description of what to consider when selecting or acting as an executor, click on this link: Executors – Selection, Duties & Planning Points.

Powers of attorney are another vital part of good financial planning. Powers of attorney cover those situations where you cannot, either permanently or temporarily, make decisions with respect to your financial affairs or health. In Ontario, there are two kinds of power of attorney: one for finances and one for your personal care or health. Once you become incapacitated, you cannot sign a power of attorney, thus it is very important to have these be in place before such an event. For a more detailed explanation, please click on this link: Powers of Attorney – Uses and Planning Points.

Retirement planning is the cornerstone of all financial planning and no pre-retirement plan is complete without a retirement plan. Although generally called retirement planning, a better description is "financial independence planning" because that is really what we are planning for: the day when you can stop working and live off your capital and have it last the rest of your life. I generally tell people that we are trying to calculate when you could stop working if you choose to but you don't have to. If you continue to work after the point when you could stop, then you are simply increasing…

Using investment leverage is an effective way to increase returns and reduce taxes for those who have a greater appetite for risk. Go to Leverage Section for a detailed description of several leverage strategies, in particular the Smith Manoeuvre.

In financial planning terms, risk management means finding ways to mitigate the risk of financial loss or hardship due to unexpected events such as death, disability or poor health. Generally speaking, such risks are mitigated by using products offered by insurance companies, such as life insurance, disability insurance, critical illness insurance and long term care insurance.

Life insurance is essentially a way of insuring an income stream. In a family, one or both of the spouses earn an income and they are either mutually dependent, or one is dependent on the other, or there are children who are dependent on their parents for support. Life insurance provides the capital to replace a portion or all of the income which is no longer provided when the insured dies. As in all forms of insurance, all insureds share the risk of premature death and spread this risk amongst themselves. Insurance actuaries use actuarial tables developed using statistical methods…

Disability insurance covers the risk of an insured person becoming disabled, either permanently or temporarily. The risks of becoming disabled are much higher than the risks of dying as you can imagine. The financial risk arises from the disruption in a person’s ability to earn an income. Most disability insurance pays a monthly amount if the insured person becomes disabled. This amount will always be limited to a set percentage of the insured person's income (typically at 70% maximum of pre-tax income). This limit is in place to provide an incentive for the insured person to go back to work.…

Critical illness insurance is a form of protection that can provide you with a lump sum payment if you suffer from a covered critical illness and the survival period is satisfied. The physical and emotional strain of a critical illness can be severe and when you combine that with the potentially damaging financial impact, the result can be devastating. Unlike traditional life insurance, critical insurance coverage is a fairly recent development. That's where the critical illness benefit comes in—you are free to spend the money as you wish—such as to help cover lost income, to pay for private nursing or out-of-country…

Long term care insurance is a type of insurance that covers the risk that you end up in a long term care facility. This type of insurance becomes more expensive the older you get. I once had a client who was over 80 and she was getting worried about the possibility that she would end up requiring long term care. I had to tell her that it was not available at her age. The time to consider ensuring yourself for this is when you are still in good health and in your late 50's to mid 60's. After this, it…