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An Estate Plan: More Than Just Having a WillAs a financial planner I often ask people about their Estate Plan. Commonly the response I get is, “I have a will, I'm good.” That's like someone asking about your car and you responding you have an engine so all is well. A Will is just one component in a complete Estate Plan.
Having a Will and having a complete up-to-date Will are also two different things. A Will needs to name an Executor who is both willing and able to perform the job. It is wise to also name an alternate Executor. Beneficiaries may have to be updated every time a new child or grandchild comes along.
It surprises me anyone wants to be an Executor. Some think it is a honour to be named an Executor. It is actually a huge job and a tremendous amount of responsibility - not to mention a potential liability if it is not performed properly. At least make the job a little easier for your Executor by ensuring they have access to up-to-date and straight forward information about your affairs, such as a list of accounts, bills, debts, and contact information for anyone they will have to contact.
In general it also makes sense to minimize what actually becomes part of your Estate. Company pension benefits, RRSP's, and RRIF's can have a named beneficiary which allows these assets to go directly to the beneficiary and bypass becoming part of your Estate. There are tax benefits, too, if the beneficiary happens to be your spouse.
You can use named beneficiaries on non-bank TFSA's. Yes, you can get TFSA's through investment firms and insurance companies! Named beneficiaries can be on any investment instrument done through an insurance company, such as Guaranteed Investment Funds (also known as Segregated Funds) or a GIA. A GIA is the insurance industry's version of a GIC.
There are multiple benefits in having assets bypass your Estate. Beneficiaries receive bequests in days or weeks instead of months or years. There can be significant savings in probate fees and possibly income taxes, unless you like paying money to the government. It also maintains a level of privacy.
