What You Need to Know About Estate Planning
Posted by Ocean Wealth
Thinking about how your loved ones will go on without you isn’t easy. That said, having no form of estate planning in place when it happens one day can be far more devastating.
Estate planning is something that needs to be carefully considered by everyone. In order to secure the people you care about most, you need to make some important decisions about how your estate will be handled when you pass.
While everything in estate planning isn’t black and white, there are some key points to keep in mind. The process can differ from person to person, as do personalities, but there is a commonality among most estate plans on a basic level. This will help make an already difficult time for your loved ones less complicated without having them worrying and fighting over your estate.
Do You Need a Will?
In essence, a will determines how your assets will be handed out when you pass. This is a legal document which outlines, in clear terms, who will inherit which parts of your estate. Your will can be as detailed or as straightforward as you choose. Your entire estate can go to your partner and children or certain assets can go to different friends and family, as well.
A big mistake a lot of people make is thinking that their partner automatically inherits their estate when they die. If you die without a will in Canada, also known as dying “intestate,” your assets will be divided according to provincial law. That means the provincial government will choose your beneficiaries on your behalf and while that can mean your partner and children, that is not always the case.
In order to avoid a situation where the provincial government is making estate decisions on your behalf, a will is crucial. The clarity of that will is also key. Leaving ambiguous statements about how you want your estate divided can cause more problems than it solves. Since putting together a will can be a complex undertaking, it’s always best to speak with an estate planning advisor who can help guide you through the process.
Put a Power of Attorney in Place
A power of attorney (POA) is another important step in estate planning. Though POA varies by province, the idea behind them is to give a trusted person the authority to make financial decisions on your behalf should illness or injury render you incapable of making those decisions on your own.
In many cases, POA goes to your partner but having an alternate trusted person has also become standard. This “agent” is legally empowered to sign your name and becomes your fiduciary. That means they have to act in your best financial interest at all times and in line with your wishes.
Many people also think POA only applies to someone who may be older and in a declining state of health. Since illness or injury can occur at any point in life, having a POA should have less to do with age and more with having a trusted fiduciary in case of any health crisis.
Estate Planning is Constantly Changing
Estate planning isn’t a one and done kind of thing. As the years go by, things in your life change and your plan needs to reflect that.
For example, you might be happily married right now and your plan states that your partner should inherit the majority of your assets. That’s fine for now, but what happens in the event of a divorce? Or to make things even more complicated, what if you remarry and have children with another partner?
This scenario is a lot more common than you might think. While we’d love to think that things will stay exactly as they are, life doesn’t always happen that way. This is why it is of the utmost importance to continue updating your estate planning throughout your lifetime.
Get in touch with us to take the take the first step towards making plans for your estate. Our trusted team of estate planning advisors will give you all the information you need to make the best decision for your future. Contact us today!