Estate planning is something that benefits everyone, whatever their circumstances- martial status, age, wealth, etc. The problem is, too few of us heed this advice and the consequences of a “do nothing” option can be extremely detrimental to your heirs and loved ones. Estate planning is also an ongoing process regardless of age, but at different stages life, different priorities and issues require strategies that meet these needs.

Young family
At this stage you’re just starting to accumulate assets and raise a family, but preliminary planning is important. This includes preparation of a will and should include appointing a guardian for your young children. This is often the impetus for getting a will initially, and obviously a very important decision. An important selection is the executor of your will - the person you put in charge of distributing your assets. Another important consideration at this stage is assessing your life and disability insurance needs to ensure you have adequate protection in case of loss or disruption of your cash flow. This is also when you start your savings such as RRSPs and education savings programs for the children.

Mature family
During this stage the children are young adults and have either left home or are pursuing secondary education. You have accumulated considerable assets and are entering your peak earning years. Review your will periodically to ensure it represents your current or changing circumstances (i.e. martial status, children from another relationship etc.). Determine your financial status by reviewing your assets and liabilities and your current income and expenses and match those with you future needs, goals and priorities. Then if there is a shortfall in your existing plan, you can take steps to cover that gap, perhaps by accelerating savings, concentrating on eliminating debt, or buying that dream property at the lake.

Pre-Retirement
You are now getting older, retirement is approaching, and health concerns become more of an issue. Your children may be married and may or may not be financially independent, because of being out of work, divorced or have a disability. Again you will need to assess your life needs and priorities, such as becoming a “snowbird” or moving to a more retirement-oriented community. You need to review your will and perhaps reconsider the executor, as your situation has probably become more complex. For a variety of reasons (primarily to avoid conflict), an immediate family member may not be the best choice. You may want to explore the benefits of a trust company being executor and trustee, acting as an impartial third party. Another important concern is how to minimize taxes so that your estate is not seriously depleted by taxes upon your death.

It is always wise to obtain the advice of a team of professionals: your lawyer, tax accountant and financial professional to make sure your wishes are fulfilled.

August 14, 2009