Exceptional Estate Plan
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How to Build an Exceptional Estate Plan

You finally have your affairs in order. You’ve completed your will and power of attorney (POA) documents. Good for you. Over half of Canadians have not taken this important step. But your journey in creating a comprehensive estate plan is far from over!

This article breaks down the components that take an estate plan from good to great.

Let’s explore 10 elements that together create an exceptional plan.

Only having a will and POA in your estate plan is like packing for a trip, but forgetting your passport and tickets.

Building an Exceptional Estate Plan

Here’s our top 10 list of essential items that should be included in well-planned out estate plans.

1. Will

The will is the legal document that is the foundation of your estate plan. It outlines how your assets should be distributed after your death.  Without a will, provinces will dictate how your assets are divided, which might not reflect your wishes.

2. Powers of Attorney

Powers of attorney are legal documents that appoint someone to make decisions on your behalf if you’re unable to do so. There are two main types:

  • Power of Attorney for Property: The appointed attorney has the power to manage your financial affairs, like paying bills, managing investments, or selling property.
  • Power of Attorney for Personal Care: Also known as an Advance Care Directive in Alberta, the attorney can make critical decisions about your health and personal care needs including living arrangements, medical interventions, and end of life care.

3. Living Will

A living will provides instructions regarding medical interventions should you be unable to speak for yourself. It ensures your family knows your values and quality of life preferences, removing the stress of having to guess your wishes.

4. Trusts

Trusts are legal entities. There are different types of trusts, but all hold and manage assets on behalf of beneficiaries. Unlike wills which are public documents, trusts are private and designed to manage assets, direct how and when assets are to be distributed, avoid probate, and minimize taxes. 

How to Build an Exceptional Estate Plan
East Block in Canada's Parliament Hill

5. Minimizing Taxes/Avoiding Probate

A good estate plan utilizes many different approaches to avoid probate fees and minimize taxes upon death. 

At death, all your assets are deemed to be disposed of, which can trigger capital gains and significant tax liability. Some ways to minimize taxes include:

  • Utilizing certain types of trusts
  • Naming a charity as a beneficiary
  • Gifting assets to your children prior to your death.

Probate, a court process that validates a will and the appointed executor, levies a fee (also known as estate administration tax) which varies by province. There are ways to ensure assets bypass your will to avoid probate. A few notable strategies include:

  • Naming beneficiaries on assets like life insurance policies, retirement and investment accounts
  • Creating a trust 
  • Designating joint tenancy with your spouse on your principal residence.

Read our article Probate By Design for more information. 

6. Letter of Intent

A letter of intent is a personal letter providing instructions on items not covered in your will. It can include details about your funeral arrangements or share personal sentiments. It’s intended to provide clarity, guidance and comfort for your grieving loved ones.

7. Guardianship Designations

If you have minor children, designating a guardian in your will protects your kids. When you name a person you know and trust, your children will have the emotional support and security they’ll need.  Without this, the court decides who assumes guardianship. Check out #5 in our article about dying without a will here

8. Digital Assets and Passwords

Digital assets and passwords are often overlooked, yet essential to an estate plan. We access almost everything online – bank and investments accounts, digital currencies, tax returns, social media, personal photos etc. It’s critical your plan lists all accounts and passwords so your executor can manage these assets and your family can access treasured memories.

Passwords provide access to your assets, documents, and a lifetime of memories.

9. Document Organization/ Guidebook

If you want the settlement of your estate to be efficient and timely with the least amount of stress on your family/executor then organize your financial and personal documents in a guidebook. Make this the go-to place for them to locate important documents and learn your wishes regarding pet-care, end of life care, funeral arrangements and more.

At Financial Concierge™ our Family Playbook™ serves as a guide that documents your estate plan and sets your executor up for success. 

10. Regular Reviews and Updates

And don’t think you’re done when you’ve completed all of the above! Change happens. You get married, or divorced, or grandchildren enter your life, or you acquire significant assets, or lose assets in a market downturn – all of these life events impact your estate plan. Review it regularly to make sure it reflects your current circumstances.

Conclusion

When you include the above 10 elements in your estate plan, you gain confidence knowing that your legacy is preserved and you’re well prepared for whatever the future brings. Your executor and loved ones understand your wishes and you have peace of mind knowing an exceptional blueprint is in place to manage your assets and personal care.  

Did this article give you insight on how to build an exceptional estate plan? 

We’d love to know if you have an estate plan that includes more than just a will and power of attorney documents. Share your experience!

Financial Concierge™ offers Professional Executor and Power of Attorney services to assist  with executor and attorney duties or help with managing daily financial activities. Learn more about Financial Concierge™ here.

Author: Janet Jackson, Contributor: Jill Chambers

DISCLAIMER: This blog is not intended to be legal or financial advice and should not be construed as anything other than for information purposes.

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