Estate Planning is the preparation and organization of your affairs, financial assets, and healthcare considerations, along with naming power of attorney and heirs in the case of healthcare decline, incapacitation, and eventual passing on. The power of a comprehensive Estate Plan will help your loved ones left behind manage your financial affairs efficiently, and not be left with mountains of paperwork, taxes, and lawyer expenses.
A comprehensive Estate Plan includes:
- Designating beneficiaries and Power of Attorney
- Outlining charitable gifts, estate assets, funeral, and burial wishes
- Incorporating potential estate taxes
- Wills
Life is unexpected, planning ahead is your best bet to ensuring your wishes are respected, while protecting your assets to help give peace of mind to you and your loved one.
Key Components of an Estate Plan
Estate planning can reduce the time and expenses (such as taxes!) associated with the probate process (essentially the validation of the deceased’s will) for your loved ones. The key components of an Estate Plan include:
Power of Attorney allows you to ensure the person you want to be your voice, is the person appointed to make decisions in your best interest in case of rapid health decline or other reasons.
Your Will is a legal document outlining your wishes around distribution of assets and care of any minors.
A Trust is set up in the case that assets need to be held on behalf of a beneficiary by a third-party trustee; a “will executor” or “estate administrator”.
Healthcare Directives are often given in a living will as to your wishes for your medical care, should you be incapacitated and able to make decisions for yourself. They also include an appointment of a healthcare power of attorney.
Why is all this necessary?
Why Estate Planning Should Be a Priority for Seniors
Having the power while in a right state of mind is important for seniors to ensure your loved ones receive the inheritance you want them to, instead of leaving it up to the law or courts to decide.
A good Estate Plan also helps seniors minimize estate taxes by “gifting” inheritances such as property and asset allocation ahead of time, as well as avoid the costly (in time and money) probate process.
By protecting your loved ones by taking this important, though sometimes uncomfortable-feeling step, proper Estate Planning allows you to provide financial security for surviving partners, children, and other loved ones, providing you peace of mind.
Four Top Estate Planning Tips for Seniors
- Enlist the help of a reputable estate planning attorney who understands your province’s rules to help you correctly prepare documents. The legal process is a complex one, and a professional can help you navigate the requirements.
- Document all your assets: Any retirement savings, investments, insurance policies, real estate, and personal belongings of value.
- Think long and hard about your loved ones’ needs. How do you want to help them in your absence? What assets would be best managed by whom? Is a charitable donation to your favourite non-profit or cause part of the plan? This is your legacy. How do you want to give back to the community and your intimate circle?
- Review and update your Estate Plan regularly. Circumstances change constantly: births, deaths, marriages, and divorce – the older we get, the more things change. Ensure you have the most up-to-date plan possible to include everyone you want (and don’t) in it!
And remember: It’s never too late to start planning!
