Estate planning is a vital part of life. It's the process of preparing for your death, which can be difficult to think about. However, you need to make sure that your family and loved ones are taken care of after you pass on. To do this, you must create a will, trust and other documents that will help them manage their inheritance and get through this difficult time.
Here are some helpful tips on estate planning:
A will is a document that outlines what you want to happen with your assets after you die. It can also be used to name an executor, who manages the process of distributing your estate to beneficiaries (your heirs).
Who should have a will?
Any person of legal age, who owns property or money and has minor children
Anyone who doesn't know how they want their assets distributed upon death
Anyone with a significant other who may not be named as beneficiary in case of death
Establishing a trust can be an effective way to manage your assets. A trust can be created by your will, or later in life. The most common type of trust is a testamentary trust, which you set up by naming someone (the trustee) to manage your property after death. Another type of estate planning tool is the living trust, which lets you create and modify the terms of your own living trust without going through probate court after death.
A revocable living trust allows you to name beneficiaries for assets held in the name of the living trust, who receive any distributions from those assets at any time before it’s revoked by its creator/trustor (you). An irrevocable one doesn't allow beneficiaries to access funds until after death; however, once funds are distributed within an irrevocable account they cannot be reclaimed or changed unless there's been some specific action taken in that regard beforehand by their creator/trustor (you).
Powers of Attorney (POA)
What is a POA? A Power of Attorney (POA) is a legal document that allows you to appoint someone else to look after your financial affairs and make decisions on your behalf when you are unable to do so.
Who can create a POA? The person who wants their affairs to be managed by another person must be 18 years of age or older.
Who can be appointed as the POA? The person who creates the POA can choose anyone they want, although it's best if they select someone close enough to them so that their wishes are followed.
How do I create a POA? There are several ways: online; by downloading an official form from any government website; through private companies such as lawyers or real estate companies; or from other websites like Quicken WillMaker and LegalZoom.com which offer this service for free but charge extra for additional services such as updating changes in laws, reviewing documents regularly etc... Please note that some provinces have specific rules about creating powers of attorney which may not apply across all provinces/territories so if unsure check with your local provincial office regarding these requirements before proceeding further!
A living will is a legal document that expresses your wishes for health care in the event of a terminal illness or permanent unconsciousness. In addition to describing your preferences for end-of-life care, they may also address organ donation and other medical issues.
You can write your own living will or have an attorney draft one on your behalf. If you choose to write it yourself, make sure you use language that is clear and concise so that others can understand it easily. You should also keep copies of any medical information and insurance policies with your living will so that family members know where they can find this information should anything happen to you unexpectedly (e.g., driving accident).
Frequently Asked Questions (FAQs)
What is the difference between a will and a trust?
A will is an estate planning document that allows you to state who should receive your property upon your death. A trust is another type of estate planning document that gives you greater control over how your property is distributed after death, generally for tax advantages. It’s also possible to combine the two into one plan called a revocable living trust.
What are the benefits of having an estate plan?
Having an estate plan can help avoid legal problems after you die, protect loved ones from financial hardship or fraud, ensure that assets go where they should go according to your wishes (and not just at the whim of whoever happens to be next in line), minimize taxes on beneficiaries by transferring assets in accordance with CRA rules (even if they aren’t technically willed), take care of pets and other non-human beneficiaries through trusts or trusts-within-trusts, keep assets out of probate court proceedings so they can be distributed faster and more efficiently than if left alone through probate court proceedings alone.
Estate planning is an important part of life.
Estate planning is a process that can help you ensure your wishes are carried out after death, and it's important to start considering this at an early age.
People usually think of estate planning as a way to ensure the transfer of assets after death, but there are many other goals besides passing on property. For example, an estate plan may also help protect loved ones from financial ruin in case something happens to you or provide for them if they're unable to care for themselves as they get older.
We hope that you feel empowered to make the best decisions for yourself and your loved ones. There are many tax and other considerations to be made when preparing an estate plan - contact us for more details. We are here to help!