Updated: December 4, 2024
When we think about financial literacy, we typically associate it with budgeting, having robust emergency savings, and minimizing credit card debt. However, we need to look beyond building your savings and preparing your finances for the worst — we also need to think about finances as it relates to death, grief and mortality. We need to plan for legal and financial matters to support dependents and ensure that your assets are protected when you’re no longer here.
Yes, this topic is overwhelming because it’s not easy to think about your mortality or end-of-life planning, but it's an important conversation to have. Financial literacy is about democratizing access to information so we can be more empowered to make decisions that impact us as individuals and our loved ones.
Here are some frequently asked questions around estates, along with steps to help you start securing your assets and possessions:
Nearly everyone has an estate — regardless of size! Your estate consists of everything you own: your car, home, other real estate or property, checking and savings accounts, investments, life insurance, furniture, personal possessions.
Estate planning involves making plans in advance about your assets and possessions and where they will go after you’re no longer here. Estate planning is important because it’s for everyone. It’s also not a one-time event. It’s an ongoing process — you should review and update your plans as circumstances change.
Estate planning is important because it can be costly and confusing when you don’t take the steps to plan efficiently. If planned well, you will reduce the burden on your loved ones after you’re gone — otherwise they will be left to pick up the pieces and navigate handling your estate in confusion and worry.
We often think that estate planning is only for wealthy people, but that’s simply not the case. An estate plan will protect you and the people you love both during your lifetime and after your death:
There are lots of myths surrounding estate planning. Let’s take a look at some of the most common:
Not true! While estate planning can certainly help to reduce the tax burden on larger estates, it’s essential for everyone. An estate plan means that your assets will be distributed according to your wishes regardless of the size of your estate. It also ensures that you’ll be taken care of if you are incapacitated.
It’s often thought that estate plans are only for elderly people, but in fact everyone over the age of 18 should make a plan for peace of mind.
While you might think that your affairs are simple and your spouse will inherit everything, this won’t happen automatically. If you don’t make a will then you will die intestate, in which case the courts will decide how your estate is distributed.
Probate can be a lengthy process, and some estate plans are designed to help avoid this. In many cases, making a will won’t be enough by itself. If your aim is to avoid probate, you may also have to think about other strategies such as putting your assets into a trust.
Your circumstances will change during your lifetime, and so it’s crucial to review your estate plan regularly to take account of any changes. Divorce, remarriage, the birth of a child or even buying a new home can all mean that you need to make adjustments.
An executor is the person who will carry out your wishes regarding your estate, which are documented in your will or trust. An executor can be someone of your choosing. If not, it will be chosen by a court. One of the major responsibilities of an executor involves going through a legal proceeding called probate. More to come on that.
If you have an estate plan and will in place, you’re already ahead of 50% of the population — over half of Canadians have not made a last will and testament, according to a recent survey. However, a will alone will not be sufficient. A comprehensive estate plan will include a number of different documents to ensure that your estate is administered smoothly after your death, and that your wishes are adhered to if you become incapacitated. We’ll list these in the next section.
While every estate plan is tailored to the individual’s particular goals, your estate planning checklist should include these essential documents:
Probate is the legal process your estate goes through after you’re no longer here. During this legal proceeding, a court will first authenticate your will (or trust) and approve the executor that is named so they can begin to distribute your estate to beneficiaries. The average time to complete the probate process could be six to nine months if everything is seamless.
However, if there are no documents or if challenges arise, the process becomes more complicated. During complicated processes, probate can take up to several years. And if there isn’t an executor named, the courts ultimately decide what happens to your estate, even if this is against your wishes.
We know that taking the first steps towards securing your legacy can feel overwhelming, which is why we recommend you do not undertake this alone. Here are a few reasons why we recommend you work with an attorney or experienced fiduciary:
Digital tools such as online wills have transformed the estate planning process for individuals. Cloud-based solutions not only make it easy to create estate planning documents online, but also to store them securely, share them with loved ones, and update them when your circumstances change.
If you choose to work with an attorney or a fiduciary, they can also benefit from using digital solutions. Leading providers such as Estateably, a platform designed specifically for trust and estate professionals, streamlines the administration process to ensure that everything goes smoothly when the time comes.
Estateably Inc. © 2024
Estateably Inc. © 2023
