Like many people, you may enjoy investing. After all, it can be invigorating to put away money for your future, follow the performance of your investments and track the progress you’re making toward your long-term goals, such as a comfortable retirement.
However, you might be less excited about preparing your estate plan, dreading the perceived time, effort and cost. Yet, you can make the entire process more manageable by breaking it up into specific tasks.
What are some of those tasks? Everyone’s needs are different, but here are a few suggestions that may be applicable to your situation:
Evaluate your life insurance needs. If something were to happen to you, would your family be able to stay in the house? Would your children be able to go to post-secondary school? You should have sufficient life insurance to take care of these and other essential needs.
You might hear about various formulas for how much insurance you should purchase, but you may be better off by working with a financial professional — someone who can evaluate your assets, goals and family situation, and then recommend an appropriate level of coverage.
Have a knowledgeable estate lawyer draft your will. For most people, a will is probably the most essential estate-planning document.
Regardless of the size of your estate, you need a will to ensure that your assets will be distributed according to your wishes. If you die intestate (i.e., without a will), your assets will be distributed as set out under the applicable provincial law — and these distributions may not be what you had in mind.
Update beneficiary designations. Beneficiary designations on your insurance policies and registered accounts, such as your RRSP and TFSA, generally permit proceeds to transfer outside of your estate. So it’s in your best interests to make sure you’ve got the right people designated as beneficiaries. Over time, you may need to update designations to reflect changes in your family situation.
Share your plan. The most comprehensive estate plan in the world may not be of much value if nobody knows of its existence or where to find it.
Share your plan with your loved ones and executor.
It’s important that everyone knows their role in carrying out your wishes.
When dealing with your estate-planning issues, you’ll want to consult with your legal and tax professionals.
And by taking a step-by-step approach, you can keep the process moving forward without feeling that you’re being overwhelmed.
Bruce Shepherd is a financial advisor with Edward Jones. This article is provided for information purposes only. Please consult with a professional advisor before implementing a strategy.