Thinking about what will happen with your assets, money, or belongings after you pass away is a common concern. Many do not like to think about their passing, but most also do not want their money to be the subject of fights between family, friends, and partners. To avoid this situation, it is essential to plan ahead.
With that in mind, we need to look over the benefits of setting up an Estate Plan with Calgary real estate lawyers to make sure that everything is done correctly.
What is What?
First of all, let us define the terms and expressions used by lawyers when dealing with Estate Planning, as those are the basis for better understanding the step-by-step and its benefits.
Estate is defined as any money or property you leave behind in the event of your passing. Estate Planning is, therefore, defining how those assets will be distributed. The Estate Planner is the person who will, you guessed it, help you plan this document—this person must be knowledgeable in law and taxes, so we highly recommend having an experienced real estate lawyer with you to protect your wishes.
The document that will be drafted is called a “Will”, it is legally binding and will guide your loved ones on what to do with any assets you laid out on the document as well as it can give instructions on how to take care of the family that depended financially on you.
Then we have the executor, who is the person that will carry out your wishes after your passing and contact the beneficiaries; that is, the people or institutions receiving money under your will. Some people may even choose to concede power of attorney to another, which is when you give someone permission to decide what will happen to your assets and health care in case you are unable to.
Similar to power of attorney there is also something called a living will, a legally binding arrangement where you state what and how you want your estate and health care to be dealt with in case you are unable to anymore. The difference here is that you are the one making all of the decisions beforehand, but with the downside of not being able to predict the future and be as specific as you might want during an unforeseeable situation.
What if I do not do it?
Setting up an Estate Plan is by no means mandatory, but if you do not have one in place, more problems may come down the road for your loved ones.
For one, you will lose control of who will take care of your belongings, as the government will name a person who will decide what will happen to your assets. If you are leaving money for loved ones so they can have a more comfortable life after your passing, they may receive less than what you intended and may need to pay more taxes.
Another pressing concern is time, it may take longer to settle your estate making it more stressful for your family and friends. Not leaving an Estate Plan before you go can cause disputes in your family, as they might begin to question who is more entitled to your assets than others. Unfortunately, this is much more common than it should be.
Planning will ensure that your wishes are being respected and will bring a lot of peace of mind to your family knowing that trouble will be greatly avoided at such a difficult time.
What Should I Do?
When creating an Estate Plan, you will want to have an experienced real estate lawyer with you. While not mandatory, it is highly recommended that you do so. Creating an Estate Plan involves documents that are legally binding and knowledge of the law to ensure it will not be disputed. It may be tempting to save immediate money but having the peace of mind that the Estate Plan is properly done will benefit not only yourself but also your loved ones.
Different Estate Plans require different things. Simpler estates are easier to deal with and more complex ones may require extra work, which is another reason why a real estate lawyer should be with you throughout this process.
Make sure you leave a will first and foremost; this is one of the most important documents in an Estate Plan. Name your beneficiaries and plan ahead for an eventual funeral as well as pre-paying for it to ensure your loved ones will not need to.
Having life insurance is a great plan as well, it can leave tax-free money for your loved ones and help cover expenses for your funeral as well as final estate costs.
Leaving some of the money for charities of your choice can also give your estate a tax deduction in the year of your death.
It is always stressful dealing with the certainty of death, and very few people are really ready for it, but planning ahead will ensure it will be less stressful for your loved ones and give you and them peace of mind in a very needed time.