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Two financial planners in a boardroom discussing estate planning.

Blog The Value of Estate Planning, Plus Pitfalls of Procrastination

January 06, 2021
Two financial planners in a boardroom discussing estate planning.

Video5 Myths about Estate Planning all business owners should know.

We wrapped up 2019 discussing retirement and how to plan for those golden years. Yet the planning doesn’t stop once you sell your business. In fact, that’s just the beginning!

To kick off 2020, we’re turning our attention to estate planning – which, unfortunately, has been cloaked in the shadows of crisis for far too long. Truth be told, estate planning can accomplish quite the opposite when done properly and mitigate the potential of further chaos to your family.

Estate planning is about taking inventory of what you have, who you love and how you want to provide for them. Where it gets more complicated is making sure you do it in a way that also accomplishes things such as meeting your beneficiaries’ needs and even protecting your legacy.

When there’s a will…

First, a will on its own does not constitute an estate plan. Instead, it’s one of several important documents that ensure your wishes are carried out once you’re gone. The other two must-haves are an enduring power of attorney and personal directive (more on both later). Combined, all three documents for two spouses are sometimes known as a “six pack.

A will should be a cornerstone of your estate plan. Think about those who either need your financial assistance currently or potentially might down the road. While most people will default to their children, what about parents? Beneficiaries outside of your immediate family? Charities?

Even if you don’t have children, a will ensures your assets end up in the right hands. While intestacy legislation in Alberta generally follows blood lines, complications could keep an estate in the courts for years. Why consume your family’s time, tears and dollars when you can make your wishes known in advance? If you own a business, estate planning should also include strategies such as succession planning and emergency business planning. Without getting too technical in this article, it could even involve documents such as writing shareholder or partnership agreements that act as rule books of what happens with business assets in the event of death, divorce or personal bankruptcy.

Document, document, document

In advance of meeting with an estate planner, catalogue assets such as properties, vehicles and boats, including addresses and bills of sale. Document all financial investments and consolidate digital assets such as passwords and banking information into a central location.

A conversation isn’t enough when it comes to topics such as life-sustaining treatments or funeral plans. Properly document your end-of-life wishes through a personal directive (i.e. instructions for important life decisions) and an enduring power of attorney (i.e. the person making those decisions on your behalf) so they are not subject to interpretation or legal battles. The highly publicized case of Terri Schiavo in the U.S. that lasted more than a decade is a sobering example of what could happen when those directives are not clear.

Procrastination = poor planning

The root of poor estate planning is not about missing something. It can often be traced to procrastination.You know you need a plan, but who wants to think about life after death if everything’s good today? Often, it can help to think about estate planning as a process that makes it easier for your family moving forward rather than an exercise in worrying about death.

One last note: Don’t get stuck on carving your plan into stone. Families evolve. Your estate plan should, too. Instead of anticipating every contingency, sit down regularly with an estate planner to review your strategy and tweak it as needed over time.

If you have questions about estate planning, the advisors at Three60 Wealth & Estate Solutions can help. Our team of Calgary-based wealth and estate planners can integrate its vast experience and network to create a customized plan for you, your family and your business.

For a truly different financial planning experience, contact our office online or at 403-640-4414 to schedule an introduction meeting.

Authored by: Jason Nagel, Director of Advanced Planning at Three60 Wealth & Estate Solutions Inc.