Estate planning is as important a consideration as is retirement planning. It simply involves organizing your affairs so that upon your death, your heirs are easily able to get the money you've left them - and at the lowest possible tax cost. It is a means of giving your loved ones control over your estate in order to make the most of its value.
Correctly structured, your estate plan should ensure the following:
The importance of a will cannot be underestimated, since it is the only way you can guarantee that your estate plan will be executed precisely and according to what you had intended. This cornerstone of your plan sets out your wishes, most particularly with regard to the distribution or disposition of your assets.
If you have no will (which means that you die intestate), the provincial government will decide how to give away your property - and it is not likely that this will happen in a manner you would have chosen. It also means your heirs may be liable for more taxes on your assets, and it may leave your spouse or children unprotected.
A will is a document of great importance and should cover the following:
Financial planning requires some motivation. And for many people, it requires some guidance. Many people are simply not interested in personal finances and may not even have a household budget in place. Many feel that they have insufficient assets to consider developing a plan, or that they are too young or too old to do it. And still others may not want to deal with issues like estate planning.
But without a financial plan ...
Financial planning covers all of the issues we've discussed here - investment planning, retirement planning, and estate planning, as well as cash management - something that makes all of these other issues possible. Financial planning may also involve insurance considerations and income tax planning.
It can be thought of as a problem-solving process that allows you to achieve your financial goals - and like many other facets of life, it requires you to make choices. You need to determine your short-term and long-term goals and priorities, and work at developing strategies that will help you meet them. If you find this too daunting a task to handle on your own, you may wish to consider meeting with a financial planner, who can either give you enough basic tips to get you started on your own, or who can act as a long-term counselor.