Estate planning is a crucial process that involves arranging for the management and distribution of your assets and affairs after your passing or incapacitation. While it may not be the most comfortable topic to discuss, proper estate planning is essential to ensure that your wishes are carried out, your loved ones are taken care of, and your assets are protected. As experts in estate planning, the team at Sidhu & Associates understands the importance of ensuring a smooth and secure transfer of assets after one’s passing. That is why we have compiled some information on common estate planning mistakes.
Learn everything you need to know about power of attorney.
Common Estate Planning Mistakes and How to Avoid Them
1. Procrastination and Lack of Planning
Many people put off estate planning, thinking they have plenty of time to address it later; however, life is unpredictable, and none of us know what the future holds. Failing to create an estate plan promptly can leave your loved ones vulnerable and uncertain about your wishes. Without a proper plan, family members may have disputes about who should inherit specific assets or how debts should be settled.
2. Not Having a Will
Some assume that estate planning is unnecessary if they have a small estate or few assets; however, having a will is essential regardless of the size of your estate. Without a will, your assets will be distributed according to provincial law, which may not align with your wishes. A will lets you specify how you want your assets to be distributed and ensures that your loved ones are provided for after your passing.
3. Failing to Update the Estate Plan
Life is full of changes, such as marriages, divorces, births, and deaths. Updating your estate plan to reflect these life events can help you avoid unintended consequences. For example, if you divorce and forget to update your beneficiary designations, your ex-spouse could still inherit your assets. Regularly reviewing and updating your estate plan is essential to ensure it accurately reflects your current wishes and circumstances.
4. Overlooking Digital Assets
In today’s digital age, many people have online accounts and digital assets, such as social media accounts, email accounts, and digital photo collections. You must account for these digital assets in your estate plan to make it easier for your loved ones to access and manage them after your passing. Consider including instructions for your digital assets in your estate plan and providing access information to a trusted individual.
5. Not Considering the Impact of Taxes
Estate taxes can significantly reduce the value of your estate and impact the amount your beneficiaries receive. Failing to consider the impact of taxes on your estate plan can lead to unnecessary tax burdens for your loved ones. Consult with a qualified estate planning notary or financial advisor to explore strategies to minimize estate taxes and ensure your assets are distributed efficiently.
If you want to know more about our estate planning services, please get in touch with us today. You can contact us through our online contact form or by calling 604-859-4825.
