How to Create an Estate Plan?

A comprehensive estate plan requires a thorough analysis of your assets, liabilities, accounts, and potential beneficiaries.

Today we’re providing readers with clear and concise steps to take to create their estate plans without missing a beat.

What Is an Estate Plan?

Estate plans provide directions for how your assets will be distributed when you die. These plans may also name guardians for your minor children, reduce taxes on what you leave behind, and minimize stress and disputes between relatives and loved ones.

Why Is It Important?

Estate planning in Life insurance is vital to ensure that your last wishes are fulfilled. You have worked long and hard to build your legacy, whether that be through your home, company, or investment accounts. When your time has come, it should be up to you to determine how your hard work is distributed.

In addition to fulfilling your requests, an estate plan can provide a financial cushion for your beneficiaries. They may use this to cover funeral costs, mortgage payments, or finance education, among other things.

Intestate deaths are when a person dies without a legal will or estate plan. This comes with costly taxes and fees, and lengthy court processes. Estate plans can reduce or eliminate these procedures, leaving more for your beneficiaries and alleviating the distribution process.

Creating Your Estate Plan

Follow these eight steps to create your own thorough estate plan today.

1. List Your Assets and Liabilities

You can’t distribute your assets if you’re unclear on what they are. Take the time to think through all of your physical and non-physical assets. These may include your home, other properties, vehicles, investment accounts, bank accounts, family heirlooms, furniture, and any other physical items that you would like to be passed on to a beneficiary.

Assets can also include non-physical items, such as copyrights, patents, franchises, and other intellectual property.

Once you’ve listed your assets, separately list all liabilities you hold, specifically any debt you owe. Make notes of account numbers and the contact information of your creditors so that your estate representative may contact them to inform them of your passing in the future.

2. List Your Accounts

Another component of your estate plan includes listing the accounts you hold. While some of these, such as brokerage accounts, may be listed under your assets, it’s important to also compile all accounts together on a separate list.

These accounts can include memberships, subscriptions, alumni clubs, or charity associations you belong to. Take note of any benefits these accounts may offer, as well as if you’d like to donate any part of your estate to one of these organizations after your death.

3. Review Your Retirement

If you have acquired multiple RRSP or TFSA accounts, it’s time to consider if consolidation would be beneficial. Having all of your retirement investments in one place makes it more accessible and easier to manage, both for you and your beneficiaries in the future.

If part of your retirement is located within your insurance policy, insurance professional Sim Gakhar can let you know about your consolidation options.

4. Review Your Insurance

Life insurance and annuities are created for your beneficiaries. While estate planning, it’s important to review your life insurance or to consider getting insurance if you don’t yet have a policy.

Reviewing these policies is especially important if you’ve recently experienced a large life change, such as a divorce, marriage, birth of a child, etc. Always make sure your beneficiaries are up-to-date across all accounts and within your will.

For all questions related to insurance and investments, feel free to reach out to Sim Gakhar. Sim is an experienced insurance and investment professional who will gladly review your estate plan and policies to make sure they are working together and working for you.

5. Designate Important Individuals

Your next step is to designate beneficiaries and important individuals, from your life insurance policy to your family heirlooms – this is, after all, the core of estate planning. Lay out who will receive what portion of your assets. If your individual accounts allow, designate beneficiaries or transfer-on-death designations. In the next step, remember that your will must coincide with these designations.

Another important individual you’ll need to appoint is your estate representative. This is the person you are leaving in charge of carrying out your will and wishes. Decide who you want this to be and discuss the option with them to ensure that they will accept the responsibility when the time comes.

6. Compile It All in a Will

Your final will is where all of your lists and analyses will come together to designate your last wishes. In Ontario, you’ll need to choose between a formal will, holograph will, or military will for your will to be valid. All wills need to be signed by the testator (the person creating the will) and some require the additional signature of non-related witnesses.

Drafting a will is not an easy task, so many people depend on professionals like Sim Gakhar for guidance. She can provide an outline and the correct language for formulating your will according to Ontario law.

7. Finalize All Documents

Jotting down your wishes on a Post-It and signing it may not hold up in court as a legal will. Make sure you have the appropriate signatures, notaries, and paperwork where required.

If your will is not seen as legal in Ontario, you’ll be subject to the Ontario Wills and Succession Act. This Act will distribute your assets according to pre-established law, ignoring any of your last requests or wishes.

Consult with Sim Gakhar to make sure your estate plan and/or will meet all of Ontario’s requirements.

8. Review Your Plan with a Professional

An extra pair of eyes may always see something you didn’t, especially when that set of eyes belongs to investment and insurance agent Sim Gakhar.

Sim has worked with countless individuals holding a great variety of policies and accounts, and she has the experience you need to review and solidify your estate plan today.

Don’t leave something so important up to chance – review your estate plan with a professional to complete the process with confidence.