You’ve heard countless times from the Bridgewell team that one of the main drivers of wellness is strategic financial planning. Think of a comprehensive plan as a blueprint designed to bridge any gaps in your finances, one that helps you achieve your lifestyle goals. Part of that process involves preparing for the inevitable with detailed estate planning, which is often easier said than done.
The reason: many Canadians struggle to talk about the end. According to a 2019 study by the Financial Consumer Agency of Canada, only about 55 per cent of Canadians have a will, while 40 per cent have powers of attorney in place. Those numbers plummet for Canadians younger than 35—only 22 per cent in the younger demographic have a will and just 9 per cent have powers of attorney.
Why? Some people defer conversations about estate planning because they simply don’t want to come to terms with their own mortality. And, really, who does? It’s far more appealing to live and love life, pushing off discussions about our final days for as long as possible. Others will claim that they simply lack the time to plan for death when there’s so much to do while they’re still alive—spending time with family, raising kids, travelling, building a business or managing a team.
Too complicated? Proactive estate planning minimizes complexity
The reality, however, is that we’re all going to pass away at some point. Avoiding estate planning only complicates the legalities around inheritance—especially for high net-worth individuals—and can potentially derail succession strategies when a family business is involved.
That’s why—no matter your age—it makes sense to be proactive and get your estate planning house in order. Doing so helps ensure your assets go to the right beneficiaries and avoids burdening your loved ones with unnecessary complexity when you pass away (which hopefully won’t happen for a very long time). Waiting until it’s too late, such as when you’re already incapacitated and unable to make changes to estate documents, can put your family’s wealth at risk.
3 things you need to know about estate planning
- The ultimate goal of a well-designed estate plan is to retain and transfer as many of your assets, as quickly as possible, to your beneficiaries upon death
- Effective estate plans should be designed to minimize tax liabilities and create a legacy of intergenerational wealth (or perhaps even philanthropic giving, if you choose to donate some or all of your estate assets to charity). Think of it as a technical process that protects your beneficiaries by minimizing legal and financial risk
- Contrary to popular belief, estate planning involves far more than simply drafting a will (although that component is vitally important). Core estate plan features typically include:
- Power of attorney
- Will (perhaps several, depending on the complexities of your assets)
- Living will
- Medical power of attorney
In our next blog, we dive into the strategic considerations around estate planning and the many family considerations involved in the process.
The Bridgewell Team
For more information on Bridgewell’s estate planning advisory services, contact us today.