17 things to check when you’re estate planning

May 1st, 2015

Your estate is the sum of a lifetime of hard work, smart investing and sensible financial planning. It is your greatest legacy to your loved ones.

No matter how young or old you are, you much wealth you have amassed, whether you’re married with children or single, everyone can benefit from developing an estate plan. But many people spend a lot of time and effort accumulating personal wealth and very little time preserving it.

Here is a checklist of items to consider:

  • Take an inventory of your home and make a list of all items that are worth $100 or more.
  • Add up your non-physical assets. Consider including RRSPs, RRIFs, bank accounts, life insurance policies and all other existing insurance policies such as long-term care, homeowners, auto, disability, health and so on.
  • List all credit cards and debts. Include everything such as auto loans, existing home mortgage, lines of credit, open credit cards with and without balances and any other debts you might owe.
  • Make a list of all organizations and charitable memberships you have. Include any other charitable organizations that you support or make donations to.
  • Review your retirement accounts. Accounts and policies where you list beneficiary designations will bypass your will and probate directly to that person or entity listed at your death.
  • Simplify your life. If you’ve changed jobs over the years, it’s likely that you have several different retirement plans. Consider consolidating these accounts into one individual account to take advantage of better investment choices, lower costs, and a larger selection of investments.
  • Put a plan in place to cover future health care and nursing home costs so your estate won’t be eroded by mounting medical expenses.
  • Everyone over the age of 18 should have a will. It is the rulebook for distribution of your assets and it could prevent havoc among your heirs. Your will, Enduring Power of Attorney and Personal Directive are fairly inexpensive planning documents to draft.
  • Regularly review your Will, Enduring Power of Attorney and Personal Directive every two years and after any major life-changing events such as marriage, divorce or birth of a child.
  • Select and confirm the availability of your executor/liquidator. Don’t immediately assume that your spouse is best choice. Think about all the qualified individuals and how emotions related to your death could influence their decision-making abilities.
  • Visit a financial planner. It’s always a good idea to have a full investment and insurance plan done at least every five years. As you age, life throws many curveballs. (e.g.: long-term care etc.)
  • Understand how taxes will affect your estate.
  • Understand that taxes could deplete assets like RRSPs, RRIFs and pensions by as much as 50% when left to a non-spousal beneficiary.
  • Know what income your family will get from the estate.
  • Understand any group life insurance provided by your employer on your life and that of your spouse will terminate or reduce upon your retirement.
  • Maintain up-to-date beneficiary designations on your life insurance policies, pension plans and RRSPs.
  • Understand that like RRSPs, the income taxation of capital gains can be deferred until the surviving spouse’s death or until such a time as the asset is disposed of.

Estate planning is simply more than having a will. It is a continuous planning process that can alleviate the financial burden for your loved ones. Spend the time now to organize your affairs so you can help those you leave behind understand, resolve and prepare for any of the issues that can arise when settling your estate.

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