Now that 2016 is upon us, here are five estate planning resolutions that you can make that will help to ensure that your affairs are in order:
- Make a Will
If you don’t have a Will, resolve to make one in 2016. Having a Will ensures that your wishes will be upheld on your death, and also reduces the burden and difficulty of administering your estate. A properly drafted Will can also help to reduce the tax liability of your estate.
- Review your Will
If you already have a Will, you should review it in 2016 to ensure that it still reflects your wishes and that it is practical given the current realities of your situation. For example, has your named executor moved away or become ill? Have any of your beneficiaries died?
If any changes are required to your Will, you should see a lawyer to have them professionally made.
- Make (or review) your Powers of Attorney
Having updated Powers of Attorney is just as important as having a Will. Powers of Attorney ensure that someone will be able to make health care and financial decisions for you if you become incapable. If you don’t have Powers of Attorney in place, 2016 should be the year that you create these documents. If you do have POAs in place, you should review them in 2016 to ensure that they still reflect your wishes.
- Name beneficiaries
If appropriate for your estate plan, you should name beneficiaries to your registered accounts (e.g., RRSPs, RRIFs and TFSAs). Accounts that have named beneficiaries will pass directly to those beneficiaries outside of probate. Your estate will therefore not pay probate tax on those accounts, and the accounts will be transferred to the named beneficiaries immediately without needing to wait months for probate.
- Talk it out
Many estate conflicts can be avoided with some open and honest communication. In 2016, sit down with your loved ones and discuss your estate plan. Let your family know your reasons for the decisions you’ve made. Discuss your wishes for personal care and treatment if you become incapable. Tell them where your estate planning documents are located. Jennifer Corak has written a blog with some helpful tips on how to broach this difficult topic of conversation.