Estate planning is a task that everyone will need to do at some point in their life. Putting yourself and your family in a position that your estate, no matter how big or small, is properly organized can help elevate some of the stress that occurs with the passing of a loved one. You will also benefit from the added peace of mind that your estate and assets will be handed down or distributed to the people you choose.
Estate planning is an imperative part of life. Here we run through five important areas you need to know to ensure that your wishes and desires are fulfilled when it comes to your estate.
Think about what is in your estate
Your estate is more than just your house. Estate planning needs to take into consideration your bank accounts, stocks, premium bonds, retirement savings, businesses, life insurance, and personal possessions such as cars, antiques, jewelry, or collectibles.
If there are items that hold high sentimental value but low monetary value, it can also be worth including these in your estate planning. For example, you might own a vintage mirror that holds no value, but was given to you by your Grandmother and you would like your daughter to own this after you pass away.
Write a will
Generally, the first step in estate planning is writing a will. A will is a legal document that details what happens to your estate and assets when you pass away. It serves as a guide for the executor (the person who manages the will) and the courts. Having a will written with the help of a family lawyer can help speed up the process of distributing your estate.
If you’re one of the 56% of Canadians who don’t have a will, we recommend hiring a family lawyer to help you write your last will and testament.
List your beneficiaries
When planning your estate distribution, you need to consider beneficiaries. These are the people, institutions, or charities who receive the assets from your will. Common beneficiaries of estates include spouses, children, grandchildren, close friends, and charities that are close to the person’s heart.
It’s your decision to divide up your assets however you see fit. For example, you could leave 25% of your estate to your son and 75% to your daughter, or if you own multiple properties you could leave a house to each child and one to your wife.
There isn’t a limit on the number of beneficiaries you can list in your will and it’s recommended that you think carefully before listing any minors as beneficiaries of your estate without implementing trust fund access to their inheritance.
Consider using Power of Attorney
In British Columbia, a power of attorney is a document that gives another person the legal right to manage your estate and assets. Power of attorney can be implemented at any time but is most common when a person is reaching old age and is no longer able to fully manage their estate — hence why understanding power of attorney is an important part of estate planning.
Understand Probate
Probate is a term used to describe the process that a court undertakes when settling the estate of a person who has passed away. The court will be looking to check that the last will and testament of the decreased is valid before the executor of the will is able to start distributing assets and estate.
Understanding probate is a good motivator for estate planning. Without a written will or legal documentation that explains what happens to your estate when you die, probate can take a very long time, and often leave friends and family members with an unnecessary workload, tax implications, and headache.
There’s plenty to consider when you’re estate planning and these five points are by no means a comprehensive list. Remember, the reason you’re undertaking estate planning is to make life easier for your loved ones that you’ll leave behind. Hiring a family lawyer to guide you through the complex process can give you a much-needed peace of mind that the plan for your estate is legally binding and will cause minimal stress to your family.
