Most people assume that estate planning is for the elderly, and for most people, it is. That is, your estate won’t be settled until after you pass, and most people’s lives tend to expire later on in life. But sadly, this isn’t the case for everyone. Some of us die long before our time or become too ill to function. If you’re not prepared ahead of time, then you’ll have no control over where your assets go.
What happens if I don’t have a will?
I know, it’s a depressing subject, and most of us simply don’t want to talk about it. You don’t have to, but if you don’t then know that it may cause problems for those you leave behind.
Without a will, the province you live in gets to decide how your assets are distributed. Typically, the first $50,000 of value goes to the surviving spouse (if there is one). The rest is then divided up amongst your spouse and your children. If you don’t have a spouse or children, your assets then go to your parents. Since the court has to appoint a bonded administrator to serve as the executor, without a will, your loved ones won’t gain access to your assets quickly, plus it could cost them quite a bit to do so.
Types of wills
According to Investopedia, there are 3 kinds of wills in Canada:
- Last will and testament
- General durable power of attorney
- Living will (also called an advance healthcare directive)
Last Will and Testament
Why have a last will? The purpose of the last will is to provide instructions for the executor, the person you choose to distribute your assets. The last will is always read after the funeral, so you cannot include instructions on how you want your funeral to operate.
Power of Attorney
What happens if you become incapable of managing your own affairs? If you still want some say in how your affairs are handled, then you can choose a person who can handle them for you, should you become incapacitated in some way. The person you choose will be given the power to handle your day-to-day tasks, including:
- Paying your bills & doing your banking
- Opening your mail
- Looking after any pets you may have
- Voting on your behalf
- Filing your taxes
What you need to know is that without a power of attorney your partner cannot legally do these things on your behalf.
Living Will
What happens if you are unable to communicate your wishes due to injury or medical treatment?
According to Investopedia, A living will gives healthcare/mental power of attorney to a person of your choice. It gives this person, acting as your agent or attorney-in-fact, the power to implement the medical treatment you wish to receive if you become unable to communicate your wishes. The document tells doctors, family members and the courts your wishes for life-support and medical procedures, if you were to become brain dead, unconscious, terminally ill, or otherwise unable to communicate your wishes.
Not only does a living will give you an opportunity to make the decisions you want for yourself, even when you can’t, it also takes the pressure off of your family.
When should I plan my estate?
There are no rules when it comes to estate planning. Since something could happen to you at any time, you should probably start thinking about planning your estate when you have something to plan. It doesn’t make sense to worry about what you’re going to leave to whom if you don’t have anything to leave. As for choosing your power of attorney and creating a living will, both can be done at anytime.
Who can help me plan my estate?
While having an estate plan is clearly better than having nothing at all, not all estate plans are created the same. There are some DIY options on the market, but they’re considered controversial by some. If you want to go the DIY route, just do a little search on Google and you’ll come up with all sorts of plans.
If you have a complex estate, however, or you want the security of knowing that everything will be properly taken care of, your best bet is to contact an estate lawyer. While the plans could set you back a pretty penny, they’re worth it, especially if you want peace of mind. Likewise, your life insurance broker can answer any questions that you may have.
