Estate Planning 101: Debunking Common Misconceptions
There are a variety of stages on the path to achieving financial security. In the beginning, you’ll likely be focused on the basics, like saving money and learning to follow a budget. However, once you’ve accumulated some savings to fall back on, you’ll need to turn your attention towards products and services that will help you protect your wealth and the people who depend on your financially. One such product is a will, which is a legal document that spells out how your assets are to be allocated in the event you pass away.
On that note, we’ve got another guest blogger visiting us this week! Amanda is from Willful, Canada’s best online estate planning platform, to share some information about estate planning that might help to clarify some of the most common myths about having a will and highlight why it’s so important to have one. We’ll let her take it away…
While it can be difficult to talk about, death is an inevitable part of life. It may seem a long ways away—and it might be!—but if we learned anything in 2020, it’s that life can be unpredictable.
Despite being commonly overlooked, estate planning is a core part of financial planning. In this article, we’re covering the basics and clearing up some common misconceptions around wills and estate planning.
What is estate planning?
Estate planning is the process of making a plan for your estate in the event you become incapacitated or pass away. Your estate includes anything that you own of financial or sentimental value, including your property and other belongings. The process of estate planning includes important emergency planning tasks such as making a last will and testament and power of attorney documents.
Misconception #1: You only need a will if you have a lot of money.
The truth is, if you have any assets (including a car, property, personal items) or you have dependents (such as children or pets), you need a will. Life is unpredictable but having a will can help you prepare for the unexpected and protect our loved ones from future stress and complications.
In your will, you can outline how you’d like your assets distributed after you pass away, including anything from property to things like sentimental memorabilia. You can also indicate who you would want as guardians/custodian for minor children and pets after you die. Your will is also where you name your executor, the person who will be in charge of settling your affairs on your behalf.
Misconception #2: If you die without a will, the government gets all your stuff.
If you die without a will, you’re considered to have died “intestate.” This doesn’t mean the government automatically gets all your belongings, but it does mean they will get to use provincial laws to decide how to distribute your estate and appoint your executor.
The specific laws can vary from province to province and may not account for important relationships in your life, like friends or common law partners. This often means what happens will differ from what you actually would have wanted, which is why it’s important to have a will to outline your individual wishes.
Misconception #3: You need an estate lawyer to make a legal will.
Contrary to popular belief, you don’t actually need to visit a lawyer. In fact, what makes a will legally valid has nothing to do with whether you’ve consulted a lawyer. There are small nuances in language from province to province, but the overall criteria for a will to be legal in Canada is that it is:
written by you when you are over the age of majority in your province, and of sound mind.
signed in the presence of two witnesses (your witnesses cannot be your executor or a beneficiary or a spouse of an executor or beneficiary).
signed by the two witnesses to confirm they witnessed your signature.
signed in wet ink at the very end of the will and stored as a physical copy (you cannot digitally sign or store a will in Canada at this time).
Misconception #4: Estate planning is complicated and expensive.
Preparing a will is more straightforward than you may think. All you need to do is ensure that you’ve met the criteria for a legally-valid will.
While visiting a lawyer can be inconvenient and expensive, the process of estate planning has been made even easier and more affordable by online will platforms like Willful, which walk you through the process and allow you to create customized documents online in less than 20 minutes.
Misconception #5: Estate planning only includes what happens after you die.
Estate planning also includes preparing documents like a living will and power of attorney. Power of attorney documents deal with your affairs while you’re alive (unlike a regular will which comes into effect after death).
By preparing a power of attorney document, you will designate someone to make decisions about your property, finances, personal life, and medical care in the event of an emergency if you are unable to do so yourself. This can include paying your bills, maintaining your property, or making decisions related to your healthcare. You can also outline your wishes within your documents.
Willful is an online estate planning platform that makes it affordable, easy, and convenient to create your will and power of attorney documents online from the comfort of your home.
Thank you so much to Amanda for sharing this with us! We really appreciate your insight when it comes to demystifying the process of estate planning. In honour of this week’s article, Willful has offered a special discount on estate plans for QUBER users for the next month! Enter the code QUBER15 at checkout before it expires on March 15, 2021 to receive 15% off any of Willful’s estate planning packages.
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