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What is an estate plan?

Estate planning is an important step to provide for your loved ones after your death and making your final wishes known. A comprehensive estate plan resolves some of the complex questions that arise when someone dies, such as:

  • What’s in their estate?
  • How is their property divided up?
  • What are their funeral wishes?

Surveys frequently find while many Canadians do have wills, they often go five years or more without updating them, which could create fresh legal questions and disputes over the estate. In addition, they don’t prepare other important documents such as a power of attorney, living will, or advanced-care directive.

See: Power of attorney — FAQ

What is an estate?

In its simplest terms, an “estate” refers to the property of a deceased person. It includes assets such as:

  • real estate holdings
  • bank accounts
  • stocks and securities
  • life insurance policies
  • personal property such as automobiles, jewelry, and artwork

But when it comes to wills and estate planning, it’s more a calculation of your net worth, with all those assets weighed against any liabilities.

Everyone has an estate, regardless of its size or whether you have a will. So it’s important to have an estate plan in effect.

Why have an estate plan?

Don’t think that just because you don’t have many assets you don’t need an estate plan; it covers more than just who gets your assets, although that is an important part.

It ensures your assets go where you want — to family, friends, charities, or anywhere else. Your written wishes help this go as smoothly as possible. If you die “intestate” (without a will), the province — not you — dictates where your assets go.

See: What happens if I die without a will?

Identify who administers your estate. Without a will, a court will appoint someone to do it for you.

Don’t let legal fees erode your estate. Intestacy can lead to additional court costs, lawyer fees, and taxes that could otherwise be going to your beneficiaries.

Record your health-care wishes in advance should you be unable to communicate them when the time comes.

Appoint a guardian. If you have dependents, or even pets that will need looking after when you’re gone; this is the opportunity to fill that important role.

Spell out your funeral wishes. If you have preferences for a funeral or what happens with your remains, an estate plan is the way to make those wishes known.

READ MORE:

Estate planning checklist: http://www.fcac-acfc.gc.ca/Eng/resources/educationalPrograms/ft-of/Pages/financial-planning-4-8.aspx