Estate Planning 101
Taking care of business after you pass… It’s not the kind of thing we like to think about and it can be even more difficult to talk about with loved ones, but easing their burden in a difficult time is exactly the right thing to do. Mountains of paperwork and hurdles of red tape that can follow a loss are not the legacy you want to leave behind.
Don’t know where to start? Consider these items when creating your own estate plan.
You need a will
A will is a must have. No matter how wealthy or poor you think you are, if you have assets of any kind and/or dependents, you need a will. Without one the government will decide for you how to divide your assets and to whom. This can leave those closest to you financially vulnerable, and it could take much longer than necessary to settle your estate.
Get started. Make a list of assets, debts, beneficiaries and think about your choice for an executor, then make your way to a lawyer and let a professional handle it from there.
And, don’t forget a living will (also known as a personal directive), this clearly identifies your healthcare and end-of-life wishes if you are too ill or unable to articulate them yourself. Giving you control over your care and making what will likely be difficult time for family, a little easier to manage.
A trusted power of attorney
Your estate plan should also include appointing a power of attorney (POA). If illness or injury limits your ability to manage your financial affairs, a POA gives someone you trust the ability to act on your behalf.
You decide when this person would be able to act on your behalf and exactly what power you give them. This isn’t just for the big financial transactions, but consider all the little ones too. Simply not being able to pay your bills while incapacitated for an extended period could be detrimental to your financial standing and credit score.
Protect your income
Life insurance is another must have, especially if you are the primary source of income in your household. Not only would a life insurance policy secure income for your family, but it could also protect them from other financial distress in the event of your death. For example, your debt won’t simply go away when you do and your spouse or family could be left holding the bill.
Ensure your policy can adequately cover outstanding debts and provide the income your loved ones need to live comfortably. This is not a guessing game, talk to a financial advisor who can help you calculate the right amount and type of coverage that works for you.
Don’t stop there…
These three things will get you on the road to a proper estate plan, but that is just the beginning, consider:
- Ways to minimize probate fees and taxes, this could be a heftier bill than you realize,
- Setting up a trust for dependents to be paid out when and as you wish, i.e. for educational endeavours, or maybe the purchase of a new home,
- Charities close to your heart or organizations you might consider willing some of your estate to.
Don’t be overwhelmed by the task, ask for a help. A financial planner can guide you through every step of the process and help you understand your choices.
Want to know more? Review these sources and resources.
Need a financial advisor? I can help, send me a note and I’ll connect you with a knowledgeable advisor to help you get started.
Have More Questions?
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Everyday Insurance With Allie
Working mom, lover of the great outdoors and self-professed know-it-all. Our resident blogger, Allie isn’t the insurance guru she claims to be – but she’s learning and we are happy to help guide her. All the while keeping you in the loop on the “insurancey” stuff you need to know. #AskAllie