It’s not uncommon to get so caught up in building our legacy that we overlook the need for careful will and estate planning around what happens to our assets when we pass away. And for some, it’s just too difficult to think about.
The latest figures from the Angus Reid Institute show that the number of Canadians without a last will and testament¹ has hovered stubbornly at 50 percent. But how many of us would reconsider if we knew that not having a legal estate plan in place actually puts our vision, values and assets at risk, and creates a lot of unnecessary work and stress for our loved ones?
Only one in four Canadians surveyed under the age of 35 said they had a will, and half of those between 45 and 54 say the same. But no matter your age, the consequences of not having a clear estate plan and instructions can not only leave your loved ones struggling, but could also result in lengthy, expensive legal proceedings to divide up your estate in ways you never intended, or worse, against the values you worked so hard to establish.
In this case, perfection is the enemy of done, according to Nicole Garton, lawyer and president of Heritage Trust, who joined us in a recent webinar on estate planning. “Roughly right is better than not done at all,” she says. “Even if it’s just a rough approximation of who you think should act in these roles or an approximation of what you want, that is 100 percent better than not getting it done.”
The estate planning process doesn’t have to be overwhelming. Just a few simple steps can help support your beneficiaries and ensure your wishes become a reality.
Leave a legal roadmap for those left behind
The basic legal documents like a will, enduring power of attorney for finances, and health care directives are important. But it’s also paramount that your family and executors know where to find the information they need.
Garton says while experiencing the grief and shock of losing a loved one, she has seen family members scramble to get basic information like insurance details, track down paperwork or uncover the keys to properties or vehicles.
“Those immediate issues were very stressful for family members,” she says. “Organizing and consolidating important information and documents will help your family avoid delays, increased costs, omissions and added stress.”
An estate binder can be assembled to keep important information in one place. The records can be kept on paper, digitally or some combination of both. Whatever you decide, Garton provides a blueprint for your binder in the book Before It’s Too Late: the Estate Organizer Guide for Canadians².
Couples should each have their own binder, and they should be kept somewhere secure like a personal safe, a lawyer’s vault or a safety deposit box. The binder contains everything from emergency contact information, copies of legal documents and instructions for the care of pets to items like passports, credit cards and keys.
Your family or personal representatives should be able to find everything they need in your binder once you’re gone.
Document your digital assets
Digital footprints are growing and creating new considerations for estate planning. Currently the average Internet user has more than 150 online accounts and the average person has about 100 passwords³.
“As we’re increasingly digital and paperless, it’s critical that you document this information,” says Garton.
This digital documentation should include objects that exist only in electronic form but hold sentimental value like photographs; or actual monetary value, like airline points, or currency like Bitcoin. Then there are digital accounts, which are online access to an underlying asset, accessed on digital devices like phones, computers or tablets.
Keeping up with a menagerie of online accounts is no small feat, so Garton recommends focusing on the most important ones. She says password manager applications can help keep the most critical information documented and available to a delegated person. And some social media companies now allow users to appoint legacy contacts to manage their accounts if they pass away.
“If you have critically important memories, make sure you are downloading those to a secure backup offline and make sure that your family members know where to access that,” says Garton. “If you’ve got these digital accounts and we can’t get into them [when you’re gone], we end up spending a lot of money with very expensive IT professionals with varying success.”
Prepare your family to manage your estate
Typically, estate planning is focused on preparing the assets for your family. But don’t overlook the importance of preparing your family for the assets. Ensuring your beneficiaries understand your plans before you’re gone can help ensure they aren’t caught off guard in your absence.
Before you can prepare your family for your assets, you’ll need to get clear on the purpose of your estate plan – what are you trying to achieve? For example, are you interested in supporting specific charities or foundations, or would you like to fund post-secondary education for future generations? Once you’ve established your purpose, you’ll have the foundation for a more fulsome plan.
Next, you’ll want to communicate your vision for your legacy to your beneficiaries. Share your intentions, the reasons behind your choices and how you see them playing out. This communication can go a long way toward ensuring your vision is carried out (lack of communication⁴ can actually lead to the dissipation of family wealth.) But it’s also an opportunity to get input. For example, there’s little point in allocating a vacation home to a beneficiary who doesn’t want to be bothered with upkeep. “If it’s not aligned with the beneficiaries’ future vision and what they want, it can quickly come undone,” says Genus Portfolio Manager Grant Conroy. “Any level of intentional communication can help.”
Lastly, consider what your beneficiaries may need to know to help them prepare in advance. The rising generation of wealth inheritors have their own unique needs and may wrestle with the responsibilities⁵ of their inheritance. “Consider what knowledge might be of help, and consider a plan to try and build it up,” says Conroy. It might require more formalized teaching, such as a stewardship course offered by Tamarind Learning, or it may be something you can address in a one-on-one with your intended beneficiary.
Although estate planning might seem tedious, taking a few practical steps can make things easier for those left behind, and give you much needed peace of mind so you can focus on living. “Just get the basics done,” says Garton. “Once you have the basics done, it’s really, really easy to improve on that.”
Looking for guidance with your estate planning and wealth management? Contact a Genus advisor today.
References
- Korzinski, D. (2023) Lacking the will: Half of Canadians say they don’t have a last will and testament, including one-in-five aged 55+, Angus Reid Institute. Available at: https://angusreid.org/canada-will-testament-intestate-dying-without-will/ (Accessed: 16 August 2023).
- The all-in-one workspace for your notes, tasks, wikis, and databases. (no date) Notion. Available at: https://heritagegroup.notion.site/Before-It-s-Too-Late-the-Estate-Organizer-Guide-for-Canadians-35ab9896c2034c5699a9a4754d951502 (Accessed: 16 August 2023).
- Written by Adam Rowe et al. (2023) Study reveals average person has 100 passwords, Tech.co. Available at: https://tech.co/password-managers/how-many-passwords-average-person (Accessed: 16 August 2023).
- (2021b) How to preserve your legacy of family wealth by redefining what wealth means to you, Genus. Available at: https://genuscap.com/how-to-preserve-your-legacy-of-family-wealth-by-redefining-what-wealth-means-to-you/ (Accessed: 16 August 2023).
- Pbig.ml.com (no date) Inheritance styles: A roadmap to family inheritance, PbigMerrillLynch. Available at: https://pbigaem.fs.ml.com/articles/inheritance-styles.html (Accessed: 16 August 2023).
