Avoiding an estate planning disaster

Here are some tips to minimize the pain to your finances and your loved ones if something happens to you:

  1. Have powers of attorney. Do you know what would happen if you were seriously injured in a car accident, had a stroke, or had to suddenly leave the country in an emergency? Without a valid power of attorney for both health care and finances, it becomes very difficult for anyone to act on your behalf. Getting appointed as a guardian through the courts is expensive and time-consuming, and is also permanent. Powers of attorney let someone make decisions on your behalf, and then can take that right away when you get better. They are incredibly important.
  2. Have a will. It bears repeating: what you don’t know can, in fact, hurt you. The law is very particular to where you live. Don’t assume you know what will happen to your estate, because if you’re wrong, someone else will suffer.
  3. Don’t DIY. I’ve said it many times before. Homemade wills are frequently done wrong. You’ll save a few dollars, and cost your family thousands. It’s not worth it.
  4. Keep beneficiary designations up-to-date. If you marry, separate, have children, or lose a spouse, it is critical to update your life insurance, RSP, TFSA and RIF designations to send that money straight to the beneficiary.
  5. Keep it updated. Life changes. So does the law. A will, powers of attorney and beneficiary designations all need to be updated on a regular basis to ensure that you are properly protected.