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Daily Banking

A beginner’s guide to estate planning

September 22, 2023
min read

After you pass away, you want your final wishes to be honoured. How do you make sure that happens once you’re no longer around?

Couple and advisor work on retirement plan

In a previous blog, we shared how to protect your digital legacy and ensure your online accounts are safely managed and protected once you pass on.

Today, we’re looking at the estate planning basics to help you get started.

With an estate plan, you can…

  • Ensure your wishes are fulfilled if you pass suddenly or are no longer able to make decisions for yourself.
  • Reduce the time it takes to distribute those assets so that your loved ones receive them right away.
  • Create a holistic financial plan for now and for your future.

It’s a good idea to get started on your estate planning documents sooner than later. That way, you’ll be prepared if the unexpected happens—and you can trust that your loved ones will be taken care of.

Here’s what you need to think about during your estate planning process:

What is a Will and why do you need one?

You work hard for what you’ve gained in life—your money, your assets, your property.

But without a Will, you can’t be sure that your assets will go to the people you intended to them to, whether that’s your spouse, your children, or a charity.

If you pass away without a Will, it will be up to the province to decide what happens to your estate.

Not only is this more time consuming, but it may result in your estate being divided up in a way you hadn’t intended.

A Will is a written document, typically prepared with a lawyer, which gives detailed instructions on how your assets should be managed once you pass away.

You Will should cover:

  • The designated guardian for any young children you may have.
  • How your savings, property, and investments should be distributed among your loved ones.
  • Who should receive your personal belongings.

A Will makes sure that once you pass, your wishes are carried out how you intended, and that they’re carried out soon after you do.

This is crucial when you have loved ones who are financially dependent on you and may need access to your assets immediately.

To ensure your estate plan is honoured, be sure to create a Will.

Choose your executor

This is the person who will make sure your Will is carried out how you intended. They’ll fulfill any wishes you stated in your Will. Some of their tasks include:

  • Arranging your funeral.
  • Help distribute your assets to your beneficiaries.
  • Cancel credit cards, bills, and other expenses in your name.
  • Making arrangements for any dependent children or family members.

Name your beneficiaries

Whenever you set up a TFSA, RRSP, or another investment account, you can add beneficiary designations.

A beneficiary is the person who will inherit your money and investments once you pass on.

Naming your beneficiaries is one part of your estate plan. It ensures that the ones you love are looked after once you’re no longer around.

The beneficiary you choose will inherit all the funds in the account. You can choose multiple beneficiaries or just one.

We can help you get started with planning your financial future—and your family’s. To open a TFSA, RRSP, or GIC, contact us today!

Talk to your loved ones

In most situations, planning ahead is key to your success. The same is true of your estate plan!

Let your loved ones know what to expect once you pass away—for example, who you’ve chosen as your executor, whether you’d prefer a funeral or a celebration of life, and more.

While it can be difficult to start the conversation, the people in your life will be thankful you did down the line.

Set up Power of Attorney

Starting your estate plan means confronting topics that are difficult to think about.

For example, what might happen if you become mentally unable to make decisions about your finances or estate anymore? That’s where a Power of Attorney (POA) comes in.

With Power of Attorney, you give a person the legal authority to make decisions on your behalf once you’re no longer able to.  

If you fall ill, have a disability, or are otherwise unable to make choices for yourself anymore, your POA will manage your affairs for you.

For example, they can:

  • Pay bills on your behalf.
  • Collect your income.
  • Manage your investments.
  • Make decisions about your personal care.

Consider appointing a trusted friend or family member as your POA.

Create a planner

During a stressful time, a planner that has all the information your family will be looking for can give your loved ones peace of mind.

In your planner, you can make a list of all the accounts your loved ones will need to look after when you pass away.

It might be a physical book that you store in a safe place (like a safety deposit box at your financial institution) or an electronic document that’s password protected.

In your planner, you can include information about:

  • Recurring expenses (subscriptions, utilities, debt repayments).
  • Your pets and how to care for them.
  • Information about your financial accounts.
  • Contact information for your lawyer, insurance provider, and financial advisor.
  • Any other information you’d like to share with your loved ones that may be important.

The idea is that you’ll compile all the information in one place, making the process as easy as possible for your loved ones.

Be sure to let your loved ones know how you’ll store your planner, whether that’s in a safety deposit box or virtually.

Update your information as needed

The estate plan you make today may be different than one you’d make a few years from now.

Just like your financial plan, it’s important to update your Will as your life circumstances change. For example:

  • One of your beneficiaries may pass away.
  • Your relationship may end, and you may start a new one.
  • A new child could be born into your family who you’d like to include in your estate plan.

Review your estate plan regularly so that you can keep your wishes up to date.

We can help you get started on your holistic wealth plan

After learning how to create an estate plan, you might be thinking about what your future looks like.

When you book a meeting with a Cambrian Advisor, we’ll create a holistic picture of your financials and your life goals. We use an in-depth discovery process to learn more about your priorities, risk tolerance, and financial goals.

Let’s get started on planning your future!

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