Estate Planning Will Help To Ensure That Your Wishes Are Carried Out
Managing your finances raises a number of topics but none as tricky and potentially unpleasant as planning for your family and finances in the event that you pass away or become incapacitated. Understandably, these questions are often ignored by many—but don’t fall into the trap of avoiding these difficult matters. Good estate planning will help to make sure that your wishes are carried out, and your family and assets are well protected.
With this in mind, let’s take a look at the key areas that you should consider when designing your estate plan.
Key Areas You Should Consider
Choosing a guardian
Parents can appoint someone to be the child’s guardian in their wills. A guardian is someone with the legal power to care for another person and manage that person’s personal and/or financial affairs.
Life insurance* and trusts
Life insurance gives your family the financial security to continue their standard of living and fulfil their dreams in the event that you are unable to provide for them yourself. Life insurance payouts can be used in various ways, including paying off debts, paying for college education, or simply helping with general living costs.
Choosing someone to make decisions on your behalf
An enduring power of attorney is a legal document that appoints another person to make financial and legal decisions for you. An enduring power of attorney will continue even if you become mentally incapable of making decisions.
Will, trusts, and beneficiary forms
There are many aspects of estate planning, but the most important document is your will. Your will does two things. It appoints an executor to administer your estate and it describes how your assets are to be distributed to your beneficiaries.
Estate Planning For Young Families
Having a family is a blessing, but it can also bring a lot of worry. Much of this worry can stem from not being prepared for a disaster, such as what would happen to you or your spouse.
Estate Planning Checklist
We’ve put together this estate planning checklist to help you get started on this. We know this can be a difficult conversation, so we’re here to help and provide guidance. Expand the columns below to see some of the important points we would ask you to learn more about creating a proper estate plan.
The Children
What will happen to the children if both parents were to pass away?
Who would take care of them and until what age?
What would happen if only one parent were to pass away?
Make sure you have a will that:
Assign a guardian for your children
If there’s an inheritance for the children, who will take care of this? Make sure you assign a trustee for the inheritance.
Always choose 2 qualified people for each position and communicate your intentions with them to ensure they’re up for the responsibility.
Assets and Liabilities
What are your assets? Create a detailed list of your assets such as: Home, Family Business Interest, Investments- Non registered, TFSA, RRSP, RDSP, RESP, Company Pension Plan, Insurance Policy, Property, Additional revenue sources, etc…
What are your liabilities? Create a detailed list of your liabilities such as: Mortgage, Loans (personal, student, car), Line of Credit, Credit card, Other loans (payday, store credit card, utility etc.)
Understand your assets-the ownership type (joint, tenants in common, sole etc.), list who are the beneficiaries are for your assets
Understand your liabilities- who’s on the hook for paying back the loan?
Make sure you have a will that:
Assigns an executor
Provide specific instructions for distribution of assets
Always choose 2 qualified people for each position and communicate your intentions with them to ensure they’re up for the responsibility.
Ongoing Needs
What are your family’s ongoing needs?
List out the living expenses
List out income needs
Do you still need to pay for school?
Determine if you have enough (assets minus liabilities) to take care of the family.
Make sure you review your insurance*.
Once you determine how much need there is, review your life insurance* coverage to see if it meets your needs or if there’s a shortfall.
