Post by Terry Wright in June 19, 2017
Taken from Raymond James – Planning Perspective
Take the time to protect your family legacy as best you can.
Have you been dragging your feet on estate planning? You’re not alone. Nearly 56% of Canadian adults do not have a signed will. Most Canadians, 29% do not have a will because they don’t know how to get started or believe they cannot afford a will.
It has also been determined that 88% of Canadians between the ages of 27 and 34 do not have a will. This age group may be the most in need of a will since they experience major life milestones in that time such as buying a house and having children.
Not having an estate plan, or having an outdated one, leaves you and your family vulnerable. Your assets could get tied up in the costly court probate process after death. Your loved ones might have to make difficult decisions about your medical treatment if you become incapacitated. And they might dissolve into bickering over what you might have wanted.
Having an estate plan is important to concrete three basic elements:
– A will that includes a list of personal property and who will inherit
– A durable power of attorney to make financial decisions in the event of your incapacity
– An advance healthcare directive
Here are a few reasons to get your affairs in order.
Making sure your loved ones will be taken care of. A will is especially crucial for blended families, where children from a previous marriage may not be automatically provided for in the manner you intended. Taking stock of your assets also offers a chance to think about how well your family will be able to adapt and then plug any gaps. For example, long-term care insurance can protect against the high cost of a nursing home stay, and life insurance can provide a safety net to help pay the bills.
Avoiding probate. There are a few strategies that apply here. One option is to list beneficiaries for your bank and retirement accounts to ensure the money goes straight to them. You can also create a revocable living trust for your property, give assets away while you’re alive or consider joint ownership.
Ensuring someone you trust will be available to manage legal and financial matters. A durable power of attorney can also step in if you should become incapacitated and handle property maintenance or manage investments or a small business. You can designate joint power of attorney if you think more than one person is needed to handle your affairs.
Securing the medical treatment you want. A living will and durable power of attorney for healthcare, both elements of an advance healthcare directive, can address when to provide or withhold artificial nutrition and other life support.
Minimizing federal and provincial estate taxes. There are a number of ways to preserve more of your assets to benefit your loved ones and favorite charities.
Your family and your legacy are important; take the time to protect them as best you can. Once your plan is in place, you will need to review it, including beneficiary designations, once a year and especially after each major life change.