Statements provides three estate-related analyses that help advisors understand the potential impact of taxes, expenses, insurance, and beneficiary distributions on a client's estate. These analyses use information saved in the client's Evaluation and Family Info to estimate estate values as of today.
Unlike Financial Insights, which projects estate values into future years, Statements focuses on the client's current financial position.
Understand the three estate analyses
From the client's Client Dashboard, open Statements and select the applicable estate tab.
Analysis | What it shows | What it answers |
Estate Taxes / Expenses | Estimated income taxes, probate fees, and other expenses that could apply upon death. | What costs could reduce the estate? |
Estate Worth | The estimated estate value remaining after liabilities, taxes, and expenses, including applicable life insurance proceeds. | How much could remain for beneficiaries? |
Estate Distribution | A visual breakdown of how estate value could be distributed among beneficiaries, with options to customize allocations. | Who could receive the estate, and how much?
|
Estate Taxes / Expenses
The Estate Taxes / Expenses analysis summarizes the estimated costs associated with settling the client's estate based on their current assets, liabilities, and other saved information.
Depending on the client's circumstances, these costs may include:
Income taxes: Potential taxes associated with registered accounts, unrealized capital gains, corporations, real estate, and other applicable assets.
Probate fees: Estimated fees based on the applicable provincial rules and property information.
Other estate expenses: Additional costs such as legal fees and funeral expenses, where included in the analysis.
Refer to the footnotes (FN) for additional information about how individual amounts are calculated.
How beneficiary designations affect estate taxes
Beneficiary designations entered in the Evaluation can affect the estimated taxes and probate fees.
For example:
Registered accounts with designated beneficiaries may be excluded from probate fee calculations.
When a client's partner is the sole beneficiary of an eligible registered account, the model may defer the associated income tax until the partner's death.
Charitable beneficiary designations may affect the calculated tax liability.
Understanding estate leakage
Estate leakage refers to taxes, fees, and other costs that reduce the value of an estate available to beneficiaries. The Estate Taxes / Expenses analysis helps identify these estimated costs.
Note: Outstanding debts are not included in the Estate Taxes / Expenses total. They are accounted for separately in Estate Worth and included in the Estate Outflows portion of the Estate Distribution diagram.
Financial Insights also provides an Estate Outflows chart, which can include debt repayments. Its total should not be compared directly with the Estate Taxes / Expenses analysis in Statements.
Estate Worth
The Estate Worth analysis estimates how much of the client's estate could remain after liabilities, estate taxes, and expenses, including applicable life insurance proceeds.
The calculation can be summarized as:
Total Assets − Liabilities − Estate Taxes/Expenses + Permanent Life Insurance = Estate Worth
The analysis displays values for the client, partner (when applicable), and joint estate. It also supports an alternative calculation that includes both permanent and term life insurance proceeds. A Shortfall may appear when the available estate value and insurance proceeds are insufficient to cover the modelled liabilities and estate costs.
Estate Worth vs. Net Worth
Although related, Net Worth and Estate Worth represent different financial measures.
Net Worth | Estate Worth |
Total assets minus total liabilities. | Assets minus liabilities and estate taxes/expenses, plus applicable insurance proceeds. |
Reflects the client's current financial position. | Estimates the value remaining after estate-related calculations. |
Does not include life insurance death benefits as an additional estate payout. | Includes applicable life insurance death benefits. |
For example, consider a client with:
Net Worth: $2,000,000
Estimated Estate Taxes / Expenses: $300,000
Permanent Life Insurance Death Benefit: $1,000,000
Without insurance proceeds, the estimated Estate Worth would be $1,700,000.
Including the $1,000,000 permanent life insurance death benefit increases the estimated Estate Worth to $2,700,000. This illustrates why Estate Worth can be either higher or lower than Net Worth, depending on the client's insurance coverage and estate-related costs.
Estate Distribution
The Estate Distribution analysis illustrates how the client's estate value could be allocated among beneficiaries.
Unlike Estate Taxes / Expenses and Estate Worth, which display generated calculations, Estate Distribution allows advisors to customize beneficiary allocations and certain values within the diagram.
Understand the Estate Distribution diagram
The diagram shows how the estimated estate value flows through the following components:
Total Assets: The value of assets included in the analysis.
Estate Outflows: Liabilities, estate taxes, and expenses that reduce the estate.
Permanent Life: Permanent life insurance proceeds included in the calculation.
Estate Worth: The estimated estate value remaining after outflows and insurance proceeds.
Beneficiaries: The individuals or organizations allocated a share of the estate.
Beneficiaries can include children and grandchildren entered in Family Info, as well as additional beneficiaries entered directly in Estate Distribution.
Set beneficiary allocations
You can customize how the estate is divided among beneficiaries.
In Statements, select Estate Distribution.
Review the beneficiaries displayed.
Enter the allocation for each beneficiary using the available allocation fields.
Use Split equally, when applicable, to divide the estate evenly among beneficiaries.
To include someone who is not listed, select Add + under Other Beneficiaries and enter their information.
Select Save to retain the allocations.
Troubleshooting unexpected estate values
Estate taxes or expenses appear incorrect
Confirm the client's province, asset values, account types, ownership arrangements, and beneficiary designations in the Evaluation. Review the analysis footnotes for additional calculation details.
Estate Worth differs from Net Worth
This is expected because Estate Worth includes estate taxes, expenses, and applicable insurance proceeds. Review the Estate Taxes / Expenses and insurance values to understand the difference.
A beneficiary is missing from Estate Distribution
Confirm that the beneficiary is entered in Family Info, where applicable. Other individuals or organizations can be added under Other Beneficiaries in Estate Distribution.
If the results remain inconsistent after reviewing the saved information, contact Planworth Support with the client ID, analysis name, expected result, displayed result, and a screenshot.