DO YOU HAVE AN “ESTATE”? It may sound grand, but you probably do.
Your estate may include many kinds of assets – such as money, property, a
bank account, investments, a car, a house or other possessions. So, if you
have an estate, you would be wise to consider the benefits of an estate plan.
Estate planning is an essential part of overall financial planning. It
enables you to identify your beneficiaries. It helps you protect your family.
It can also reduce taxes. There’s no question that it can be uncomfortable
to think about mortality. But creating an estate plan can help save extra
expenses, extra time and extra pain for loved ones. A well-prepared estate
plan can help you leave the lasting, loving legacy you intend.
Important at every age
Estate planning is important whether you’re in your 20s, your 90s or
anywhere in between. That said, like the rest of your financial plan, your
estate plan will shift focus as you move through life.
In your 20s and 30s, your priorities may be to put measures in place
to pay debts, taxes and other expenses and to care for your children and
spouse or partner. In your 40s and 50s, with more assets accumulated,
you may want to ensure that your heirs receive tax-efficient bequests
and perhaps allocate funds to help pay health-related costs for aging
parents. In your 60s and beyond, you may want to include provisions
for grandchildren (even those yet to be born) and forgive debts from
Changing priorities are the reason it’s a good idea to regularly revisit
your estate plan with your professional team – a group that may include
your lawyer, your accountant and your advisor. Schedule an estate plan
review every three to five years, or whenever any of these events occurs
(this list is not exhaustive):
■■ You acquire or dispose of significant assets
■■ Your tax position changes
■■ You get married, separated or divorced
■■ You have or adopt a child
■■ Your child reaches the age of majority
■■ You, a child or a parent becomes seriously ill or disabled
■■ One of your beneficiaries passes away
■■ Income tax laws change
Answering important questions
Estate planning strives to anticipate a wide range of possible
scenarios. It considers what-ifs and helps you plan for them.
It also helps answer some significant questions. Here are a
few to consider:
■■Who will receive your assets?
■■Who will pay your debts, taxes and expenses?
■■Who will care for your children?
■■Who will care for your parents as they age?
■■ How will you protect your bequests from
■■What happens if you can’t make decisions for yourself?
An additional benefit of going through the estate planning
process is that it can clarify certain goals in your own mind –
such as whether you want to make it a priority to leave a
legacy to family or to charity. Then you can work with your
advisor to incorporate those goals into your financial plan.
Speak with your advisor
Estate planning is not a do-it-yourself project. Your advisor
can connect you with experienced legal and accounting
professionals who can help you create an estate plan that is
right for you and your family. Your advisor can also explain
some of the more complex aspects of estate planning so you
can make the best choices for your situation.