1. Reflect: Think about the legacy that you want to leave behind when you’re no longer around. “Is it leaving your personal assets? Is it leaving money? Is it making sure that loved ones are provided for?” says Chris Buttigieg, senior manager of wealth planning strategy at BMO Financial Group.
2. Meet as a family: Explain what you wish to achieve through your estate plan. Your beneficiaries may not agree; but they’ll get an understanding of your intentions. “It’s important to have a detailed conversation with family members, heirs or even a charity,” he says. “We found in our study that 82% of parents were having a discussion with their adult children…but it wasn’t always a detailed conversation.” Talk about your personal assets, your executor and your power of attorney and the reasons for your choices.
3. Update your will and powers of attorney: Assets might no longer be available. Beneficiaries may have died. New beneficiaries may have been born (such as grandchildren) or couples may have divorced. If a power-of-attorney moves away or is no longer available, she may be unusable.
4. Get insured: Life insurance can be used to replace income, pay off debts or final expenses and taxes. “It could help provide liquidity to the estate,” he says. “For instance, there might be a huge tax bill that the estate has to pay. If the intention was to leave the cottage to a daughter, we don’t want to sell the cottage…But capital gains taxes will have to be paid on that property. The insurance can cover those estate taxes and probate fees.”
5. Appoint an executor: “You want to leave the right person in charge — a person who is trustworthy, has good judgment and has the financial knowledge to do the paperwork that’s required,” he says. “They also have to be able to deal gracefully with the family at a time when they are in grief. A lot of emotions will surface. If there are three siblings, for example, ‘why did he choose Mary over me?’ That’s where a corporate executor could help.
Taken from Melissa Leong’s Financial Post Article of March 22nd 2014
