An estate plan is a necessity for anyone with financial assets or a family, regardless of how young or old they are or how much money they have—and yet, over half of Canadians don’t have a legal Will. It’s not always easy to talk about end of life plans, but it’s incredibly important to have your affairs in order. We recommend speaking to your family lawyer and/or financial advisor for personalized legal and estate planning advice, but in the meantime, here are a few points to consider.
Your legal Will
Your will should outline all of your financial assets as well as the details of how you’d like those assets distributed after your death. This may include properties you own, savings and investment accounts, insurance policies, valuable belongings and more. In addition to naming beneficiaries, you’ll need to appoint an executor—typically a trusted friend, family member or legal representative. And if you have dependents or even pets, your legal Will may outline your wishes for their guardianship and care.
If you die without a legal Will (this is called ‘dying intestate’), the government will decide who is in charge of your estate and how your assets are distributed. Here’s a great, detailed read on what they might involve here in Ontario—it’s not ideal for any family, and can put considerable stress on your loved ones during an already emotional time. To avoid this, ensure that you have a thorough, personalized will that’s been vetted by a legal expert and filed appropriately. You should review your Will every few years or whenever a major life events happens: a new marriage or divorce (yours or even your children’s), the death of a spouse or dependent, a change of address or major financial event, or if your plan for asset distribution and/or beneficiaries change.
Power of Attorney documents
When setting up your legal Will, consider appointing a Power of Attorney (POA) for your health and/or finances. A Power of Attorney gives someone the power to make financial and/or health-related decisions on your behalf once you are unable to make these decisions for yourself. These documents are typically not effective immediately; instead, they are activated upon request or when deemed necessary. However, some individuals choose to activate financial POAs immediately so a family caregiver can manage their finances, pay their bills and help file their taxes.
Your POA may be a spouse, adult child, longtime friend or legal representative, and it’s possible to have multiple POAs assigned to various elements of your estate. For example, you may appoint one child to oversee your finances and another child to make health care decisions. Here are more details on the roles and responsibilities of a POA in Canada. Once you’ve chosen your POA(s) and had comprehensive discussions wherein they agree to this role, be sure to complete the necessary paperwork and outline all wishes in writing (for example, if you’d like to be resuscitated during a medical emergency or have signed a DNR).
An estate plan is critical because it outlines where you want your assets to go after your death, allowing you to leave the legacy you desire. It can prevent conflict between family members and will greatly reduce their burden of decision-making. Additionally, a well-designed estate plan can minimize taxation on your estate, making the most of your assets when passing them on to the next generation and/or charitable organizations of your choice. If you’re a business owner, you should have a business succession plan as well as an estate plan pertaining to your family and personal wealth.
To learn more about this topic or get started on your own Will and estate plan, please speak to a trusted professional or consider a reputable online service such as Willful. And if you’re interested in learning more about skilled, dedicated homecare services in Toronto, please contact us. We’d be pleased to hear from you.