Everyone needs an estate plan. Does that statement surprise you? Many people assume an estate plan is only for the ultra-wealthy with significant assets to disburse. However, “assets” may include: savings; investments; a home, vehicle or business; jewelry; furniture; keepsakes and more – regardless of their quantity or value.
If you have any assets to pass along after you die, then a Last Will and Testament, which is the foundation of an estate plan, allows you to designate your beneficiaries and what each of them will receive. Having a Will is crucial to ensuring your wishes are carried out the way you want. While estate planning is important, it remains under-utilized in Canada.
Research and polling firm Angus Reid Institute conducted a survey1 to see how many Canadians had a Will. Released in 2018, the results painted a bleak picture, as roughly half of the respondents (51%) admitted to not having a Will, while an additional 15% said their Will was not current. When asked why they didn’t have a Will, almost one-quarter of respondents (23%) said they don’t believe they own enough assets to warrant having one.
Benefits of an estate plan
Estate planning allows you to safeguard your assets and provide explicit instructions for their orderly distribution after you die. Some of the key benefits include:
- Preserving the value of your estate for your heirs. A good estate plan takes into consideration your entire financial situation and employs strategies to help maintain the value of your assets.
- Ensuring your wishes for your assets will be understood and respected. Without a formal plan, your family may face financial, legal and emotional turmoil as they attempt to sort out your estate.
- Minimizing and deferring taxes and other costs. Financial specialists like a tax accountant can help structure your estate, so your beneficiaries receive as much of your assets as possible.
- Effecting a smooth and timely transfer of assets to your beneficiaries. Nobody wants complicated (and potentially contentious) legal work that may delay getting assets into the hands of their loved ones.
Now is the best time to get started
Some people may choose to wait until they are older to create an estate plan because it’s not a pleasant topic to think about, and they may believe it’s only an activity for the elderly. It’s human nature to procrastinate or avoid difficult tasks. However, if you proactively begin planning your estate as early as possible, the plan can be easily amended as your life circumstances evolve. Furthermore, you will have the comfort of knowing that you created this plan with a clear mind, and not under the stress of a serious illness or other pressing issues.
Of course, delaying the creation of an estate plan carries the risk that you may die without a Will (known as dying “intestate”). This could result in complex legal proceedings that could drag on for an extended time and possibly reduce the value of your estate while not honouring your specific wishes regarding how (and to whom) you want your assets distributed.
So many things in life are beyond our control, but creating an estate plan that clearly articulates your vision for settling your estate is something you can and should control. An up-to-date estate plan can offer you peace of mind and allow your chosen heirs to benefit as much as possible from your foresight and thoughtfulness.
Contact our office today to learn more about how we can help you develop and maintain a comprehensive estate plan. We have built a strong network of professionals whose expertise in various aspects of estate planning can help guide you smoothly and successfully through the process.
1 Source: http://angusreid.org/will-and-testament/