Estate planning is more than just a legal exercise – it is a crucial step in ensuring your legacy is preserved and your loved ones are taken care of after you have gone. People set up estate plans to provide for beneficiaries, protect minors and minimize legal and tax issues.
Here are seven tips for creating an estate plan:
1. Understand the Importance of Estate Documents.
Key estate planning documents include:
Will: outlines your wishes regarding asset distribution, appoints an executor, and nominates guardian(s) for minor children.
Power of attorney (POA) for property and a POA for personal care: empowers a trusted individual(s) of your choice to make decisions relating to your property and finances or health care decisions if you are incapacitated.
Living Will: details your medical treatment wishes.
Beneficiary designations: allows for certain assets, such as registered accounts and life insurance policies, to transfer directly to a named beneficiary outside of your Will.
2. Start Planning As Soon As Possible
It’s never too early to start your estate plan. POAs ensure timely medical decisions and financial management if you become incapacitated. If you pass away unexpectedly without a Will, your estate will be distributed according to provincial intestacy laws, which may not match your wishes.
3. Assemble your team of professionals
Having a trusted team of professionals to help you is indispensable. Your team can include:
Estate planning lawyer— provides legal advice and drafts legal documents.
Tax professional— recommends steps and structures that may reduce taxes at death.
Financial advisor—verifies that your investments and named beneficiaries align with the estate plan.
4. Determine when you want your POA’s to become effective
A POA for personal care can be effective when you cannot make health care decisions yourself. You can also decide when to make POA’s for property or personal care become effective. Some people make it effective immediately, while others activate it only during periods of incapacity.
5. Ensure Consistency in your Estate Planning Documents
Some Wills may contradict named beneficiaries on registered accounts and life insurance policies. To ensure your estate aligns with your wishes, all documents should be consistent.
6. Talk to loved ones about your estate plan
Regularly discussing your estate plan with those involved can help them better understand your wishes and clarify their roles. Verify whether your named executor(s), POAs designate and guardian(s) of minor children, are willing to serve. If they cannot, a court may appoint someone else causing delays and potential misalignment with your wishes.
7. Ensure your documents are accessible
To make their job easier, an executor should know where important documents are kept. Be sure to include digital assets such as online accounts, social media profiles in your estate plan. This helps your executor efficiently manage these assets after your passing.
Estate planning can be complex, so a team approach is best. An Edward Jones Financial Advisor can work with your legal and tax professionals to create a personalized strategy for you and your family.
Trevor Butchard, DFSA, CIWM, FCSI
Financial Advisor, Edward Jones
705-942-5775
[email protected]
https://www.edwardjones.ca/ca-en/financial-advisor/trevor-butchard
275 Second Line West
