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Listen, there’s plenty of people out there who don’t own a sprawling mansion with a private helicopter. Come to think of it, there’s probably a lot more people without those things than with them. The idea that you need to own a big house and have large retirement savings to build an estate plan couldn’t be further from the truth.

One of the biggest misconceptions about estate plans is that you have to be rich to have one. That’s because most people don’t realize what an estate plan actually does. While there’s certainly an asset management aspect to it, estate planning accounts for much more than your material belongings.

Even if you don’t own assets like a home or car, you should still have an estate plan in place. Sitting down with a financial advisor will give you a complete idea of what’s included in the estate planning process — but we’re here to run down some basics.

Family First

One of the most crucial elements of estate planning is that it allows you to protect your children. If you and your partner pass away suddenly and your children are under the age of 18 without a guardian, who ends up raising them won’t be up to you.

It’s a very real scenario for many people. Addressing your children’s future is something you can do with an estate plan. If there’s a close family member or family friend you want as their legal guardian if you pass all of a sudden — you can do that. You can rest easy knowing your children will be taken care of by a trusted guardian instead of the legal system.

Even if you don’t have many assets, an estate plan can also make it much easier for you to pass down the ones you do own to your children. You might have some prized family jewelry or a car that holds sentimental value that you’d like to give to them. With an estate plan in place, you can accomplish all these things, and your children will receive the appropriate assets.

The Power of Attorneys

Giving someone the authority to manage your money and property on your behalf is another important aspect of estate planning. The person you appoint in this circumstance is known as an “attorney.”

There are two types of power of attorney documents commonly used in Canada. The first is a general power of attorney, which gives your attorney authority over all or some of your finances and property. The second is an enduring or continuing power of attorney that kicks in if you become mentally incapable of managing your finances and property.

In terms of healthcare, you can also prepare documents that give a person the power to make personal and non-financial decisions for you. Of course, this only becomes the case if you’re mentally incapable of doing so. These documents may be called powers of attorney, personal or health directives, representation agreements, or mandates — depending on your province of residence.

In British Columbia, for example, the two types of documents are known as representation agreements and enduring powers of attorney. They allow an assigned person to manage personal and healthcare needs when you’re not able to.

Every situation is unique. Sit down with one of our trusted financial advisors who can help you build an estate plan that’s right for you. Contact us today!

This article contains general information only and is not meant to be considered advice for specific legal problems. If you need legal help, contact a legal aid office or a lawyer.