Gabriel Lalonde
November 24, 2021

The Estate Wedge – Your Best Shot at Peace of Mind

No one has the same set of financial goals throughout life. The farther we move through life, the more changes we make to our finances. This is why you see people move from accumulating and growing assets to estate preservation and finally transitioning to wealth. So, in essence, we are moving from savings through stability to wealth. The more organized way of achieving this is via an estate wedge.

What is an estate wedge?

Think of a planning strategy that allows you to move seamlessly from accumulation to estate planning; that is an estate wedge. Let’s look at what it fully entails.

It starts with setting aside a part of your non-registered assets into a segregated fund contract. Considering estate planning is the goal, this separation gives you more access and control over these assets. But that’s not all, it also:

• Gives you 100% control over your assets.

• Offers payout options that suit the needs of your estate, such as lump-sum payments, annuity-style settlement, or a mix of the two. You can include these options directly into your contract.

• Allows you to solve the issue of cognitive decline using suitable methods.

• Allows direct payouts to the named beneficiaries on your demise. Since these payouts go around probates with the right documentation, asset distribution is faster and easier.

Lastly, with an estate wedge, the distributions do not have to follow your will. This reduces the overall settlement costs and ensures privacy.

Thinking about your assets at retirement? Then you should also factor in your will, choose the right executor, select whom you want your beneficiaries to be, and assign the suitable settlement options to each of your chosen beneficiaries.

If you still have several years before retirement, but your parents are old, you should start thinking about their plans on assets transfer. Your goal is to help them simplify the process and assess your experience and readiness for will executions.

Whether you are doing this for yourself or your parents, it is best to contemplate all these factors, assess your options, and see if you can streamline things with an estate wedge and achieve your estate planning goals.

Let’s take a look at a hypothetical situation to drive home our points.

Suppose you have chosen two beneficiaries with an immediate payout option of $150,000 to each. In that case, you would need a $300,000 estate wedge. That way, you can assign an annuity settlement payment option to one beneficiary and a lump sum payment option to the other. Once you structure these decisions into the estate wedge, you have nothing else to worry about. You can rest assured that your assets are going to the right people and via the right channel. Until then, these assets are liquid and can grow in a portfolio suitable for both equity and fixed-income funds.

Speak to your Ottawa Certified Financial Planner to implement

An estate edge offers several options with regards to timing and asset type you can structure into it. Your advisor is always in the best position to advise you on this.

Finally, the seamless implementation of the estate wedge, as well as the excellent value it provides, makes it your best bet at peace of mind.

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