Estate planning is crucial for the desired protection and distribution of your estate and the assets contained therein. But, there are a number of things you should have in place to do so effectively.

Here are our ‘9 Estate Planning Must-Haves’ to create an effective estate plan.


1. A Last Will and Testament

A will is a legal common document that lays down the foundation of an estate plan. It essentially provides instructions for the handling of any assets within your estate upon your passing.

However, a will can accomplish other things. You can name individuals to receive money, investments, property, jewellery, homes, vehicles, pets and much more.

In your will, you will be required to name an executor to handle your estate when you are no longer present. In addition, you may wish to include designated guardians for any children or dependants under the age of eighteen.

Once drafted, you should inform the executor or someone whom you trust of where to find the respective documents – this is important!


2. A Revocable Trust

Having a trust allows you and your family to have clarity over your personal assets if anything happens to you. A trust will settle your estate more quickly and confidentially for potential future heirs than a will.

A Revocable Trust is designed to give the creator complete flexibility and control over their assets during their lifetime as well as the ability to act as their own trustee.

Assets can also be freely transferred in and out of the trust at any time and beneficiaries removed, should you no longer want them to benefit from your estate or assets.

That said, the main advantage of this type of trust is that it is ‘revocable’, which means it can be changed or made void whenever and however you like – you have the power.


3. Designate Beneficiaries

Choosing who your beneficiaries are is crucial, as these will be the people that will inherit your estate and/or assets upon your death.

An eligible beneficiary is a living person or entity that you legally designate to receive benefits from your wealth.

Beneficiaries could include, but are not limited to, a surviving spouse, family members, a disabled individual, a chronically ill individual, children, a trust or a charity.

These designations will have ‘the power’ and take precedence over instructions set out in a will. Bear in mind, beneficiaries may change over time so you must review your estate plan regularly, particularly following any life-changing event.


4. Insurance Protection

Life insurance provides protection to your loved ones and can assist with estate planning management and the distributions of your assets.

Insurance can also help pay additional costs such as funeral expenses, potential debts, or income taxes owed for the year in which you die.

Insurance payments will also help provide source of funds to your beneficiaries to enable them to meet certain obligations without having to tap into or convert assets or resources within your estate. It can provide instant liquidity to beneficiaries without having to sell a family home quickly or pay tax owed on an inherited retirement account.


5. A Power of Attorney (Financial)

A financial power of attorney (POA) is a legally binding document that gives an individual of your choosing and that you trust, the right to manage your legal and financial affairs on your behalf.

The power of attorney will ultimately give them the power to do things such as pay bills or invest money, and empowers them to make financial decisions on your behalf.

This is particularly important in later life should you become incapable to do so.

If you do not have a power of attorney, the handling of your estate could take longer and be more expensive.

It is important to review any POAs you have set up regularly to ensure that the individual remains someone you are comfortable with and trust.

Additionally, you can create a power of attorney in your plan that specifically provides an individual the power to make life-changing decisions on your behalf in relation to healthcare if you are incapable to do so yourself.


6. A Healthcare Directive / Living Will

In the event that you become incapacitated, you will need to have someone appointed that can make those all-important, and in some cases, life-changing medical decisions for you.

A living will is a legal document that specifies your wishes and outlines your healthcare decisions for end-of-life care and who should make those on your behalf.

It will usually provide specific instructions for healthcare providers and caregivers to follow and in some cases, forbid medical treatments that only serve the purpose of prolonging life.

Depending on each individual, a living will can be very specific and detailed or very general.


7. Guardian Designations

Not all wills or trusts will include a guardianship clause, however if you have minor children or are considering having children in the future then it’s important to choose a guardian.

Careful consideration should be given in this regard as in the event of your death, the appointed individual(s) will become the legal guardian of those children if they are under the age of eighteen.

The chosen individual/couple appointed should share your views and values, be financially stable and be genuinely willing to step into the role and raise the children if need be.

As with other designations, backup guardians should be named and also reviewed and changed if/when your circumstances or relationships change.


8. List of Important Documents supported by Organised Paperwork/Digital Files

It is great to have all your affairs in order but it is of no benefit if people cannot find them.

Ensure family members or someone you specifically choose knows where everything is that you have prepared in advance.

Making a list of documents, be it in paper or digital format, will ensure that nothing is missed.
Paper documents may include life insurance policies, pensions, bank accounts, divorce records, real estate deeds, birth and adoption certificates and stocks or bonds.

Digital assets should include information like where it is stored and subsequent passwords to enable access.


9. Memberships and Subscriptions List

Something often overlooked is a list of memberships and subscriptions, which would need to be cancelled upon your death.

Passwords and personal login information should be recorded (and updated accordingly should they change) for potential social media accounts or online accounts that will need to be managed or subsequently deleted, as well as who should be notified to do so.

Your digital accounts are your property, so you should provide a set of instructions to your designated representative(s) to enable them access to dispose or distribute them how you wish.

Digital asset planning is becoming more inclusive these days since many people will have internet or cloud-based assets. Remember, just because your digital assets are not tangible and don’t exist in a physical form, they should still be recorded as you are the owner.

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