Estate Planning: Your Voice After You’re Gone | FaithLife Financial Blog

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Estate Planning: Your Voice After You’re Gone

November 8, 2021Financial Fitness

Regardless of your age, income, or the value of your assets, estate planning is a critical part of planning for your future. It provides the people you love with the tools they need to manage your affairs when you are no longer able to.

Estate Planning: Your Voice After You’re Gone

So, what is estate planning? To put it simply, dying is expensive. Having a detailed plan consisting of legal documentation that helps ensure your assets are properly distributed after your death is a way to protect your family members from unexpected costs and delays in settling your estate. Having a plan in place can also minimize tax liabilities that would be passed on to your next of kin, plus it’s an opportunity to make important life decisions when you are still able – giving you a voice when you need it most.

WITH A WILL, YOU’VE GOT A SAY

Little-known fact: Without a will, the provincial government would be responsible for choosing an administrator for your estate, a guardian for your children, and how to distribute your assets. And without a power of attorney for personal care, your family would have to request a court order to be permitted to make healthcare decisions on your behalf. Perfect strangers could be managing your affairs, regardless of your wishes.

This is where some very important legal documents – all part of your estate planning – come in.

A VOICE WHEN YOU NEED IT MOST

Having a will, powers of attorney for property and for personal care, one or more trusts, and a life insurance policy will give you control over your decisions even after you’re gone. Here’s how each document plays a part in the estate planning process:

Will

Create a will to specify who you wish to receive your assets upon your death – anything from your grandmother’s china to your family cottage. This is also your opportunity to choose a guardian for any children under the age of 18. Don’t forget you will need to name an executor (i.e., the person responsible for collecting and distributing your assets), so they can make sure that your wishes are carried out, according to the terms in your will.

Once your will is drafted and signed, don’t forget to review it every 5 years – or after any big life changes – to make sure it continues to reflect your wishes.

Don’t want to worry about the extra expense? FaithLife Financial members can get reimbursed for updating their will or Power of Attorney with the Will & POA benefit.

Trust

Name a trust, or a third party, to manage assets on behalf of your beneficiary or beneficiaries. This is a fiduciary arrangement (i.e., an agreement where you transfer ownership of your asset(s) to another person) that can be established within your will or during your lifetime, and can be used to manage assets on behalf of minors or disabled adult heirs.

Trusts can protect beneficiaries from third-party claims, ensure a more favourable tax treatment of income, and provide other potential benefits, all of which you should discuss with a lawyer. It’s up to you to determine exactly how and when your assets will be passed on to your beneficiary(ies).

Not sure where to begin? Contact a lawyer to determine both your needs and the appropriate next steps.

Power of attorney

Appoint a power of attorney for property to act on your behalf when it comes to your financial and business matters. In the event you are unable to manage your own affairs, your power of attorney for property will have the ability to:

  • access your bank accounts
  • sign and file income tax returns
  • sell stocks
  • manage real estate
  • other relevant matters of importance that come up

You can also opt to limit your power of attorney to authorize a single transaction or to remain as a non-continuing power of attorney for a specified period of time.

Appoint a power of attorney for personal care (a.k.a., a proxy or living will) to act on your behalf, and according to your wishes, when it comes to your health care. In the event you are unable to make your own medical decisions, your power of attorney for personal care will be able to determine what to do when health-related issues arise, including:

  • psychiatric treatment
  • nursing care
  • hospitalization
  • treatment options
  • home health care
  • any other relevant health questions that come up

You can also opt to limit your power of attorney to only certain types of medical decisions.

Don’t have complex needs? Our new Online Will & Power of Attorneys benefit makes it easy for FaithLife Financial members to get the legal documents they may need – at no cost!

Life insurance

Purchase a life insurance policy to protect your family’s financial future. If you’re young and healthy, you may want to consider term life insurance, an affordable option that will ensure your loved ones are taken care of financially in the event you were to die unexpectedly. From covering your funeral costs and ensuring your debts are paid off, to replacing lost income so that your family doesn’t struggle to get by, term life insurance provides you with short-term protection that can be converted to permanent coverage as your situation and needs change.

If, for example, your mortgage is paid off, your children have grown, and you’re approaching retirement, a whole life insurance solution may be the way to go. In this scenario, you can ensure any final expenses, including taxes due upon your death, are covered. You can also leave a legacy for your loved ones, your favourite charity, or an organization that is near and dear to your heart.

Not sure what sort of life insurance is right for you? Connect with an advisor at FaithLife Financial today!

QUESTIONS TO ASK YOURSELF

If you haven’t begun the process of estate planning just yet, there’s no time like the present. When it comes to how things are handled after your death, there’s a lot to consider – so let’s get to it! Start by asking yourself:

  1. Who do I trust to be the executor of my estate, power of attorney for property, and power of attorney for personal care?
  2. Who will I appoint as the beneficiaries of my estate?
  3. Who do I wish to look after my children’s personal needs and financial well-being if I were to die before they become adults?
  4. What sort of life insurance coverage do I need at this stage of my life and considering my future goals? Book a FREE Needs Analysis with an advisor if you aren’t sure!

Nobody said these questions were easy – but knowing the answers ahead of time and recording your wishes in legally binding documents can help your loved ones avoid a costly, time-consuming, and emotionally stressful scenario. That’s right, incorporating estate planning into your larger financial plan will make it easier on yourself and for the people you love most.

This blog post contains general information only. Because each person’s situation is unique, it is best to speak with a lawyer when engaged in estate planning. FaithLife Financial does not advise clients on wills, trusts, powers of attorney, or legal matters.