6 Reasons You Never Thought of to Make an Estate Plan

05 Sep 6 Reasons You Never Thought of to Make an Estate Plan

According to a recent survey by Lawyers’ Professional Indemnity Co., the majority of Canadian adults don’t have a will. No doubt there are a number of reasons for that, but an estate plan isn’t just for the elderly or the wealthy.

Most people put together an estate plan when they want to protect someone – either a new baby or an irresponsible beneficiary. But there are a wide variety of reasons to plan your estate, some of which provide benefits to you. These include:

• Avoiding probate. Probate is the process of administering a deceased person’s will – or the estate of a deceased person without a will. In this context, though, probate generally refers to the costs incurred by administering an estate. If you’ve done some estate planning, those costs can be minimized.
• Reducing estate taxes. Similarly, basic estate planning can go a long way toward reducing – or even eliminating – estate taxes. Setting up a trust can make the estate or inheritance tax bill less burdensome. Working with a professional to plan in advance can help you develop the right approach for you and your family, in order to transfer your assets in the most efficient way possible.
• Avoiding a mess. The death of a loved one is hardly the time to start a family feud, but that’s just what happens in many cases. Carefully selecting representatives to carry out your wishes and beneficiaries to receive your assets helps tremendously. Setting up proper documentation that stipulates who will get what, when they will get it and how they will get it after you’re gone can ensure your assets are dispersed the way you intend.
• Protecting beneficiaries. The best way to protect your beneficiaries (i.e., your children) is to offer opportunities for learning as they grow up and involvement when they come of age. Open and honest discussion about your financial situation goes a long way toward demystifying a life with money and mitigating the emotion associated with it. Whether you have been able to do this for your beneficiaries or not, you may need an extra layer of protection for minors or young adult beneficiaries, who are susceptible to outside influences and other bad decisions. Setting up an estate plan can help you protect your beneficiary from themselves.
• Protecting assets. Consider designating a power of attorney to make personal decisions for you in the event that you become incapacitated or can’t make decisions for yourself. In addition, setting up a trust and purchasing life insurance policies can help protect your assets in the event of a lawsuit or other financial problem.
• Shaping your legacy. If you are hoping to use your money for philanthropic purposes, you’re better off starting early. Some people intend to create a family foundation or charitable trust to support causes that are important to you, and starting early helps ensure you share that intention with your family members so they can support you and even participate in the planning.

The Bottom Line

Estate planning is complicated and emotional. It can be a difficult challenge. But starting to plan early gives you the ability to think things through and decide what you want to happen after your death. Without a will, your heirs could face huge tax burdens, and the courts could designate how your assets are divided and even who gets to raise your children.

To learn more about preparing your estate, contact us.

Joel Rose

With over 35 years of experience, Joel Rose helps families – and their businesses – to prepare for the future. He offers guidance and support to help his clients create estate plans and succession plans that meet the needs of the whole family. Through his extensive professional and personal experience, Joel is known for his compassion and his ability to find a creative solution to meet each family’s needs.