There are a variety of things that we don’t like to do. Taking out the garbage comes to mind, as a task that is unpleasant, but absolutely necessary to the proper functioning of a household.
So it is with a legal Will. Many families, particularly young families, put off the inevitable conversation about their Will. It is an unpleasant conversation, and there are a good deal of difficult decisions to be made and discussions to be had, to solve some problems that will (hopefully) never arise.
Its not about you…
At the end of the day, there is nothing more important than protecting your family and their future in the event of an untimely meeting with your maker. Everything you have done, every nickel you have saved, every asset you have accumulated does not want to be tied up in court while they try to figure out what to do with it. You don’t want your creditors, government, family, any of your beneficiaries to be arguing, fighting, negotiating over your assets at a time when they should be taking the time to deal with their own losses and come to terms with their new realities.
Bottom line: Drafting a legal Will and a Power of Attorney is a necessary and fundamental part of the financial planning process.
The downside to dying without a Will is that there is a time lag between that event and when your estate is cleaned up. When someone dies, the courts need to probate your estate, and then approve the passing of assets on, even if that person is a spouse. With a proper Will, the courts can quickly move things along. Without a proper Will, this can draw out and lengthen the process—which is already full of emotional burden.
There are two significant roles and responsibilities you need to appoint before you begin:
- Executor – this is the person that is in charge of carrying out the terms of the will. Many spouses appoint each other, but often there is an alternate appointed in the event of a common disaster (i.e. both parents pass away).
- Guardian – this is the person that you appoint to take care of your children should you not be able to.
- Powers of Attorney – this is a person who will be able to make decisions on your behalf if you are incapacitated.
Once you have these roles determined, and before you see a lawyer, you should also take account of the following:
- make a list of all assets (investments, RRSP’s, pensions plans, real estate, family heirlooms, i.e. anything you own of significance financially or emotionally)
- make a list of all debt (mortgage, student loans, etc.)
- identify all insurance policies (personally owned, group/employer policies)
- identify any other legal arrangements that may impact your planning (pre-nuptial agreements, shareholders agreements, etc.)
Finally, when you go to see the lawyer to draft your will (I would encourage spending the money on a lawyer, and not using a will planning kit), you should also prepare your powers of attorney. A power of attorney outlines who has the legal right to make decisions if you are incapable of making those decisions for yourself. Usually people draft two powers of attorney: one is for their wealth (for decisions about their money), and the other is about health, (decisions about healthcare).
Identifying the key roles in your will and POA planning, as well as a thorough list of assets, liabilities and insurance in advance will go a long way to speeding up the process of drafting the will. As with Life Insurance, a small investment of time and money well spent and a few prudent but simple and easy steps today, will make things that much easier for those that are left behind. The good news is that this will help you save some money on legal fees, even if you won’t be around to spend it.
In the end, you will have a document that will protect your family and will streamline a stressful process during what will certainly be a very difficult, tragic and traumatic time (unless by chance you are not only dead, but a Deadbeat Dad—but of course you are not one of those. You would not be here right now, sitting with that concerned look on your face, reading this post while looking up your lawyer’s telephone number on your Blackberry or your iPhone—there it is, that was not so hard now was it? Go ahead, hit the dial button).
Please feel free to post your comments and questions here. We’ll be happy to help.