We’ve all heard the common refrain that the only certainties in life are death and taxes. Although financial planners frequently speak about the latter, it’s essential we prepare for the former before the bell tolls for thee.
Let’s address the elephant in the room: death is an uncomfortable subject, and no one likes thinking about it, let alone planning for it.
It’s tough, but ignorance is never bliss. There are many complex and interlocking components involved in settling the assets of an estate and the finances of a deceased person. The reality is that if you truly want to plan ahead for your family’s financial future and emotional wellbeing, it is absolutely essential to have a clear plan laid out for the inevitable day you pass on, and to ensure your family knows about this plan and can access it, too – when that time comes.
Do you have a valid will? Are your executors (i.e. Estate Trustees) identified, with tasks and responsibilities laid out? Do your children know your wishes? Do you want your estate divided equally? Does your family know where to find your will, and who your legal representatives are, in the case of a sudden death? These first steps are essential to ensure your family’s emotional well-being, as well as to protect your estate and assets after you’re gone.
Do you have life insurance? Expenses from funeral homes arise immediately after a person’s death, followed by even larger expenses such as cremation, funerals, coffins, celebrations of life, and much, much else. For many families, life insurance is the only way to pay for these large expenses quickly, as it might take time to untangle and access cash from bank accounts, and money from a deceased person’s investments and estate may take many months – or even years – to work through probate in court, to be allocated to beneficiaries.
If you don’t have life insurance, how will your family pay for the expense of your death when you’re gone?
Do you have multiple bank accounts, investment accounts, credit cards, or lines of credit? An advisor can help you organize and simplify these, so your loved ones aren’t stuck playing ‘financial detective’ once you’re gone. They need a road map to follow in your absence.
Finally: be sure to let your family know how you wish to be buried, and investigate whether or not there are specific religious or cultural rules that may affect your plans.
There are many questions with answers unique to each individual and family. For example, are your assets to be divided equally, or will amounts to each beneficiary differ depending on their financial and life circumstance? Will one child receive a car, another a boat, and how will differing values in these assets be accounted for?
Here is our recommended checklist of some of the items you should have prepared:
- A legal will (and secondary will where appropriate)
- Establishing your Power of Attorney (POA) which can act on your behalf if you are no longer able to (there is one for property and one for health and care)
- Estate Trustees (executors) notified of location of will
- Life Insurance
- List of Bank accounts, liens, lines of credit, credit cards, pensions etc.
- List of investments and locations
- Setting up joint accounts where appropriate (e.g. If you have your spouse or adult children as joint-owners of an account, the money contained therein can go straight to them and avoid the probate process)
- Passwords to your accounts should stored safely, but accessible to executors (e.g. In a safety deposit box)
- After-life wishes should be clearly listed and discussed with family (e.g. If you are to be cremated, what vessel(s) do you wish to be placed in? Where, if anywhere, do you wish your ashes to be scattered? Do you want any objects to be cremated with you? How do you want your funeral or celebration of life to unfold? If you are to be buried, then where? What headstone would you prefer? Have you ensured your wishes align with the rules and specifications of cultural or religious burial sites?)
- Are there any bank accounts of a deceased family member that are unknown to you? Find out by checking with the CRA using their Unclaimed Bank Balances tool.
This is by no means a complete list. There are many other questions and issues that arise during such challenging moments of grief and loss.
Speak with your CPFG advisor today to help chart this course, so that you can help guide your family’s journey after you’re gone.