Putting together your Estate Plan probably isn’t at the top of your priority list. For various reasons, it is typically something that people don’t want to do. It’s not fun to think about what we need to do before we go, and we tend to believe that we have a lot of time to get our affairs in order.
Regardless of the size of your estate, you need a plan to ensure your wishes will be carried out, and your loved ones are taken care of in the way you see fit. A will is an integral part of your Estate Plan, but your Estate Plan is more significant than your will.
Here’s what you need to know about Estate Plans.
It’s for everyone
The term “Estate Plan” sometimes makes people think that it’s only for the incredibly wealthy. An Estate Plan is actually for anyone who wants to ensure their assets, whatever those may be, are accessible to their beneficiaries. Assets include bank accounts, investments, properties, vehicles, household furnishings, jewellery and anything else you own or are owed.
Beyond that, an Estate Plan lays out how you want your money to be distributed, who you want to be in charge of your estate and who will take guardianship of your minor children.
Your priorities can change
Regularly review your Estate Plan, especially if you have a major shift in your circumstances. When you were 30 and newly married, the will you wrote may no longer reflect your wishes now that you’re 57 and on your second marriage with four children, two step-children, and two grandchildren.
Perhaps you’ve purchased a second property and now have a retirement plan or valuable collectables. All these items are things that can change how your estate is divided. Any change in circumstances should prompt you to review your Estate Plan.
The Estate Plan review should include who your beneficiaries are and if there have been any recent changes, how you want them to receive your assets, who you trust to make crucial financial or medical decisions if you are unable to, and how your bank and investment accounts are managed.
It’s not just for after your life
We typically tend to associate Estate Planning with death, but it’s just as equally about planning for disability or incapacitation. Your estate sets out who can access your money to ensure your medical needs are taken care of and who will make important life decisions on your behalf. Not having an Estate Plan may mean someone in your family will have to petition the court to be allowed to make decisions for you. You’re then running the risk that the person granted the ability is someone you don’t trust.
If you don’t have a plan, decisions will be made for you
An Estate Plan will dictate how your assets are distributed. If you don’t have a plan, your assets are distributed according to law. Simply living with your significant other may not be enough to ensure they receive your estate, as there are regions that don’t validate common-law marriages. In those areas, your estate will go to your biological family, not your unmarried partner, unless you have a will stating otherwise.
You may have a blended family and want your biological children to receive all of your estate, or you may wish to split it with your current spouse and their children from a previous marriage. If you don’t have an Estate Plan, those wishes may not be carried out.
Final thoughts
Estate Planning is a critical part of Financial Planning. It sets out how you want your estate to be distributed, who you want in charge of it, and who you want to make your decisions if you’re unable to. If you’ve been putting off your Estate Planning, now is the time to get started.
If you have any questions, feel free to Join the conversation…