The novel coronavirus is deadly and has hit families fast and furiously. At the best of times, it’s difficult to talk about estate planning with your family. But as we all witness the spreading of the potentially-deadly virus, there is a sense of urgency to plan for the unthinkable.
Estate planning is a key component of everyone’s financial plan and yet no one wants to think about their demise or being incapacitated.
Here are a few considerations to get a plan in place.
Make a will: A will is the foundation of your estate plan. It will allow for your assets to be distributed according to your wishes. If you die without a will in place, you will have died intestate, and that is when the government will step and distribute your assets according to provincial formula.
A will clearly outlines guardianship of your children. But it is often neglected as people believe their family will never fight. Some may have put a will into place years ago; however, your family dynamics, tax laws, and even your intentions may have changed. Finally, people have told me they don't put a plan into place because they fear it will bring on their demise that much sooner. It will not.
Powers of attorney: These are legal documents that allow a designated person to step in and handle your personal and financial affairs in the event you are unable or unwilling to do so. It does not replace your will and can be revoked, if you are capable, under Ontario law. However, a power of attorney can't change your will, not act in your best interest, make decisions after your death, or transfer the power of attorney to someone else.
Joint ownership: In the event something were to happen to one account holder, the other account holder would have access to the funds in a bank account, property or even investments.
Registered plans: RRSPs, TFSAs, or RRIFs should be assigned a beneficiary. However, you should seek professional assistance because there could tax consequences, which can be complex.
Life Insurance: Insurance is best if never used and invaluable if you need it. It doesn't make losing someone you care about any easier, but it will help cover taxes, bills, mortgage payments and other expenses you may not have had to plan on paying for on your own.
In a period when you feel helpless and out of control, I think it is important to control what you can when you can. You can get your estate plan in place if you choose to.