It always both amazes and confuses me why we spend a lifetime of our working years to scrimp and save our hard earned dollars for retirement, then we completely miss making an estate plan to pass this on to our children or loved ones.
Most individuals spend more time planning their annual vacations then sitting down to make sure their financial house is in order. So it got me thinking, what possibly are the reasons or better yet, the excuses, Canadians have for a lack of preparation of an estate plan? The following is what I came up with:
1. “Why plan for my estate, I don’t plan on ever dying?”
In fact I do know that there is a 100% chance of this happening, and not planning for it will not stop it from happening. How many times do we go to a funeral of a friend to walk out and say, “wow, life really is short, isn’t it?” Yet within a few days we revert back to our old ways.
2. “I really don’t want to spend the money paying for my estate plan.”
I understand the hesitation of having to fork out the money to create your estate plan, but in fairness, what is the cost of not planning things out? The cost to implement is pennies on the dollar and as the old saying goes…a penny of prevention is worth a pound of cure.
3. “I don’t want the kids to know how much or how little I have.”
The children in most cases are the ones left to manage your estate. If you have a large estate, maybe they are not prepared to handle their potential inheritance; if you have too little, maybe they have been delaying their own retirement plans in the hope of a big windfall from Mom and Dad. Sometimes clarity and transparency is the best for all parties, so find the time to have an honest and open conversation. No good ever comes from secrecy.
4. “I’ll get around to it when I’m older.”
I always say: “you don’t buy fire insurance when the house catches on fire.”We don’t have a crystal ball on our mortality. Life can change on a dime so the best time to draft your estate plan is yesterday.
Building an estate plan is not just simply having a will, in fact, more than 50% of Canadians have failed to even take this first step. Having a well thought out estate plan covers a number of things like: funeral arrangements, picking a competent executor (not just a family member), making sure that estate taxes are planned for, ensuring that loved ones are financially protected and that the children and those relying on you are left financially secure.
The bottom line is that what I see each and every day in my rounds is that most people do talk about the big picture of their life, but the reality is they haven’t spent the appropriate time to sit down to draft a life plan. Feel free to connect with me if you need help with yours.