As the year draws to a close, many people are thinking about their New Year’s resolutions. Whether you want to start a new exercise regimen, meet career goals, or take up a new hobby, you’ve probably already started your list. But what about planning for the future? The end of the year is a great time to take stock of the legal planning tools you already have in your toolkit – and to think about what’s missing.
Regardless of your circumstances, having an estate plan in place is key to ensuring that your wishes regarding your estate are respected if the unexpected happens.
What is an Estate Plan?
Estate planning covers all aspects of how your assets will be handled and transferred when you die. However, a comprehensive estate plan can cover much more than that – it can cover decision-making if you are incapable of caring for yourself and it can also inform your short-term financial and asset strategy.
For example, you may want to gift money or assets to your family members long before your will comes into play. Alternatively, you might consider setting up a trust to deal with certain assets during your lifetime. While these decisions and strategies might not look like “estate planning” in the strictest sense, they can be essential parts of an overall estate plan in deciding how you want your assets to be handled and dealing with the implications of estate taxes.
What Legal Documents Make Up an Estate Plan?
The most commonly thought-of estate planning document is a will. A will is a legal document that sets out how you want your assets to be handled when you die and by whom. A will can also provide instructions regarding the care of your children and pets.
Beyond wills, other legal documents can make up an estate plan, including:
- Powers of Attorney: with these documents, you can appoint individuals to handle decisions relating to your finances, property, and personal care if you lose the capacity to do so yourself before you pass away.
- Substitute Decision-Maker Cards: with these documents, you can appoint substitute decision-makers to make healthcare decisions for you, in the event that you are incapable of doing so yourself.
- Retirement Plans and Insurance Contracts: with these documents, you can designate a beneficiary who will receive the proceeds after you pass away.
Depending on how your assets are being handled, additional legal documents may be required.
What Happens if I Don’t Have an Estate Plan?
If you do have a valid will at the date of your death, Ontario’s Succession Law Reform Act directs what will happen to your estate. If you have a spouse and/or children, your estate assets will be distributed to them first, followed by other immediate family members, such as siblings, parents, and nieces and nephews, as alternatives. In these cases, an Ontario resident with a financial interest in the estate must apply to a court to distribute the estate.
Similarly, if you do not appoint a power of attorney or substitute decision-maker, an individual will usually need to apply to a court to become your power of attorney. In these scenarios, distributing an intestate estate or appointing a power of attorney or substitute decision-maker can be complicated and lengthy.
For more information, read our recent blog post on what happens when you die without a will in Ontario.
What Information Do I Need to Create an Estate Plan?
With the help of an experienced estate lawyer, you do not need to worry about crafting a strategy for creating your estate plan.
Instead, you’ll focus on:
- Gathering information (including information about your existing assets);
- Considering what you want to happen to your assets (including who you would like them to go to);
- Considering care for your beneficiaries (whether they’re your spouse, children, or pets); and
- Who you want to make decisions about your finances, assets, personal, and health care if you are incapable of making these decisions yourself.
With this information, an estate lawyer will be able to advise on the best estate planning options for you and can help ease any estate planning stress.
How Often Should I Review My Estate Plan?
Things change, and reviewing your estate plan, powers of attorney, and other documents with named beneficiaries regularly to ensure they are still meeting your needs is important. A good rule of thumb is to review these documents annually.
The law changes regularly, too, and it’s important to ensure that estate planning documents that were created with a particular legal strategy in mind are still working for you. For example, annual amendments to the Income Tax Act may help you create new strategies for your estate plan.
Final Thoughts on Estate Planning
The most obvious benefit of estate planning is that it gives you control over how your estate will be handled when you pass away. Families can be complicated, and the process outlined in Succession Law Reform Act may differ from what you hope to achieve.
Furthermore, becoming incapacitated without a power of attorney or passing away without a will can create additional processes and strain for family members during an already difficult time – not only for your assets but also for the care of your dependents.
Finally, working with an experienced estate lawyer will help you develop a strategy for handling your estate and can help protect the value of your assets while minimizing the tax implications upon death.
Contact the Wills & Estates Lawyers at Campbells LLP in Oakville for Estates Planning
Protecting your assets and ensuring your loved ones are taken care of in the future is often not at the top of many to-do lists. However, managing your wealth and protecting your estate is something everyone should do to ensure that their final wishes are carried out.
Consulting with an experienced estate lawyer at Campbells LLP in Oakville can help create an easy approach to estate planning. Our lawyers have assisting clients with wills and estates matters since 1999. Contact us online or at (905) 828-2247 to determine how we can assist you.