Estate planning is the process of making arrangements for the management and distribution of your assets after your death and making arrangements for someone to make decisions for financial matters and personal care decisions if you cannot do that yourself. It is a comprehensive approach that takes into account your financial, legal, and personal needs. Estate planning can help you to:
- Ensure that your assets are distributed to your loved ones in accordance with your wishes.
- Minimize estate taxes and probate costs.
- Protect your assets from creditors and lawsuits.
- Provide for the care of your minor children or dependents with disabilities.
- Plan for your financial needs and personal care needs when you cannot make these decisions yourself.
- Plan for your own end-of-life care and funeral arrangements.
Who Needs Estate Planning?
Everyone needs estate planning, regardless of their age, wealth, or marital status. However, it is especially important for people who:
- Have minor children or dependents with disabilities.
- Own significant assets, such as real estate or a business.
- Are married or in a common-law relationship.
- Have blended families or complex financial arrangements.
- Have any health concerns or expect to die prematurely.
What Are the Different Types of Estate Planning Documents?
There are a number of different estate planning documents that you may need, depending on your individual circumstances. Some of the most common documents include:
Will: A will is a legal document that sets out your instructions for how your assets should be distributed after your death.
Power of attorney: A power of attorney is a legal document that gives someone else the authority to make decisions on your behalf if you become incapacitated.
Living trust: A living trust is the common term for what is called an “inter vivos trust” by lawyers. It is a legal document that transfers ownership of your assets to a trustee, who manages them for your benefit while you are alive and distributes them to you and /or your beneficiaries while you are alive and then to your beneficiaries after your death.
Advance Medical Directive: While some refer to this as a “Living Will”, in Canada we do not use this term, but each province has their own term for this. It may be called a Power of Attorney for Personal Care or a Personal Directive or some other term, but each of these documents allows you to appoint someone to make decisions about your personal matters if you cannot do that yourself.
How to Get Started with Estate Planning
The best way to get started with estate planning is to meet with an experienced estate planning lawyer. A lawyer can help you to assess your needs, develop a comprehensive estate plan, and draft the necessary legal documents. In this context, estate planning is not about creating assets or increasing investments.
To prepare for your meeting with your lawyer, you should gather information about your assets, liabilities, and family situation. You should also think about your specific goals for estate planning, such as how you want your assets to be distributed and who you want to care for your minor children or dependents with disabilities. You want to be able to describe your values and how these need to be reflected in your plans.
Estate planning is an important process that can help you to ensure that your assets are distributed to your loved ones in accordance with your wishes and that your financial affairs are in order after your death.
If you do not have an estate plan, or if your estate plan is outdated, you should consult with an experienced estate planning lawyer to get started.
This article is for informational purposes only and is not legal advice. Contact us today to discuss your specific situation.