Many people put estate planning on the back burner because the process seems daunting. However, doing estate planning step by step can make it less complicated.
Step 1: List all assets
This step involves listing everything inside and outside the home with a value of $100 or more. Follow this by recording all non-physical assets, like insurance policies, investment accounts and bank accounts.
Step 2: List all debts
List all debts, starting with those with outstanding balances. These would include auto loans, mortgages and more. Then add active credit lines or cards with and without balances.
Step 3: List all memberships
Upon death, someone must advise associations of the member’s passing. The estate’s lawyer or a family member can do this. They would need a list of memberships, such as a college alumni association, a health club, Costco and the CAA auto club. Note that some associations may carry life insurance benefits for members.
Step 4: Nominate charities
Some people choose to leave donations to their favourite charities.
Step 5: Name beneficiaries
Naming beneficiaries could ensure money goes to the intended persons, and it could avoid costs and delays typically associated with probate. These should include beneficiaries on insurance policies and RRSPs, and other registered accounts. Note review dates every few years and when major life events – such as divorce or childbirth – occur.
Step 6: Choose responsible people for roles
An important aspect of estate planning is the choice of responsible people for specific functions. Nominating an estate administrator or executor is crucial. Other roles include a power of attorney and a guardian for minor children. Choose people who are trustworthy, competent and willing to accept that role.
Step 7: Decide on a support team
Planning wills and estates is not something you should try to do without professional guidance. A do-it-yourself will may not adhere to legal standards – which could result in your wishes not being fulfilled upon your passing. Working with an experienced estate planning lawyer is an important step to make sure the job is done right.