Discussing your estate planning wishes with your family is not necessarily comfortable or easy. However, it is a conversation worth having to give both you and your family peace of mind.
One of the effects the COVID-19 pandemic has had on people is getting them to think about estate planning. Getting a will done or updated was suddenly top of mind for many.It is always a good idea to have an updated will that reflects your wishes. It is also an excellent idea to have a conversation with your family and executor to make them aware of your wishes. This will go a long way into preventing stress, frustrations and resentment at an emotionally difficult time.
Discussing how you plan to distribute your estatewith your family will not only remove the possible element of surprise, but it will also give you a chance to see if there is interest on their part for certain assets. For example, you may own a cottage and believe it is the right thing to do to bequeath this asset to your children. But what if one of them is not interested at all in the cottage? Knowing this ahead of time will allow you to reconsider your estate plan and come up with solutions that ensure your wishes are met while addressing your beneficiaries’ concerns.
Another situation that could arise is if you feel it is fair to leave a larger inheritance to one family member relative to others. There are many reasons why this may be the case. One child maybe in a much stronger financial situation than the others, needing less financial support, or one family member may have been more present to help you with everyday chores at a time when you needed help and you want to reward this person. Regardless of the reasons, if you want your estate to be distributed in a manner other than equal shares, having that discussion with your family now will allow them to understand your wishes and the reasons behind them. If they disagree, it is better to address their objections while you are still there. This will help prevent family infighting that can badly damage relationships and in some cases be very costly, after you are gone.
There may be beneficiaries other than your family in your will, whether it be a charity or close friends. Again, by disclosing this, you will be able to manage your family’s expectations regarding your estate plan.
The other discussion that is important to have is with your executor. This role is a huge responsibility and should not be taken likely. Even before finalizing or updating your will, you should talk with the person you choose as executor to ensure they are comfortable in taking on this engagement.
Once an executor is named, the next steps are to make that job as easy as possible. Having a discussion with your family so that everyone has a good understanding of what the expectations are regarding asset distribution will allow the executor to focus on the task at hand instead of spending much of his time dealing with family squabbles. Furthermore, organizing your affairs in a way that makes it easy for your executor to manage and settle your estate will not only help him with his tasks, but will also help in finalizing the distribution of assets more quickly. Your executor should know where to find your will and you should leave a list of the assets you own, any debts outstanding, and don’t forget your digital accounts. There are tools that can help you in this task of making it easier for your executor to sort out your affairs. One of them is the Virtual Shoebox offered by the Canadian Life and Health Insurance Association. Just type “Virtual Shoebox CLHIA” in your favourite search engine and you will find it.
This writing is for general information purposes only and is not intended to provide legal, accounting, tax or personalized financial advice. For complex matters you should always seek help from a professional. Any opinions expressed are my own and may not reflect those of Louisbourg Investments.
Marc André Castonguay, CFP®, CIM® is a financial planning manager with Louisbourg Investments. Comments or questions may be submitted to him at firstname.lastname@example.org.