So, you don’t want to talk about estate planning? Well, it may not come as a surprise but you’re not the only one. People often avoid being proactive about estate planning because it’s not an immediate need, it can be complicated, and let’s face it, discussing your own mortality is a bit of a downer.
Putting off getting your estate in order can seem very much like delaying to schedule a dentist appointment. You know it should be done, but truthfully, just
don’t want to.
The only problem is the outcome from procrastinating can be much more serious. Unlike getting a cavity, not organizing your affairs can see your hard-earned assets disbursed according to provincial legislation post-mortem and not according to your wishes – among other complications.
All of this may seem daunting and morbid; but estate planning can be quite the contrary. And there’s no denying the importance of organizing your affairs before you’re unable to do so.
What is estate planning?
The general purpose of estate planning is to organize the transfer of wealth including investments and life insurance to an individual(s). However, the specific purpose of estate planning varies and is unique to each person. To some it could mean preserving family wealth, providing for their children or leaving a legacy through a charitable donation.
In all cases it’s crucial that you take the right steps to organize your assets.
A surprising statistic about wills
The cornerstone of planning your estate is having a will. According to Douglas Grey and John Budd’s book, The Canadian Guide to Wills and Estate Planning, only “one of three adults has a will, which means that two-thirds of the time when people die their wishes are not met.” This is a staggering statistic to think about and reflective of people’s tendencies to avoid addressing their mortality.
But just because others aren’t taking death seriously, it doesn’t mean you shouldn’t too.
How to get started
A recent article published in the Globe and Mail suggests that you should start planning your will by making a detailed list of all of your assets and liabilities. This will give you a clear snapshot of your estate. Next, assess the needs of your family and consider how their lifestyle would be affected if something happened to you.
It’s also important to review all financial accounts in detail to understand any possible implications resulting in the transfer of assets.
Business owners have more to consider
And if you’re a business owner, things can get complicated if your estate planning doesn’t include a detailed business succession plan. Estate planning for
business owners can be complex because it often deals with larger estates and intricate tax issues.
Appointing a representative
Who’s going to be in charge when you pass away? Someone may come to mind immediately or it might take longer to get there. In either case, take great care in appointing your executors, trustees and powers of attorney. These folks will hold the keys to your estate and need to be trusted with the responsibility of handling your affairs. Evaluate accordingly!
Choosing the right guardian for children is also essential. Take the time to have honest conversations about this responsibility with loved ones as childcare could be a lasting role.
As you plan scenarios that involve children, consider exploring how trusts can play a part in providing long-term financial support.
Pre-planning your funeral
Pre-planning funeral and pre-paying for services is always a good idea. This will relieve the burden for family members and loved ones during a difficult time and leave no questions when it comes to your final wishes. And pre-paying alleviates financial responsibilities while saving you money over the long term by locking in a price and sheltering it from inflation.
What’s great is you can conveniently pre-plan your funeral online, taking the time to assess what’s important when it comes to your final wishes.