Estate planning is more than just creating a will. Go through this step by step checklist when estate planning to protect your assets and legacy.

But first, let's start with the basics.

What Is Estate Planning?

Estate planning is the process of outlining a plan in advance for your assets (or your “estate”) for after you pass away. Estate planning has several components but at the end of the day, it protects and helps your loved ones once you’re no longer around. 

One way to think of estate planning is that it’s a blueprint or roadmap for your family. One of the most important parts of estate planning is making a will.

What Is A Will?

Your last will and testament is a legal document where you’ll document many components of your estate plan. 

What Is Power Of Attorney?

A good estate plan also includes preparing for the event you are medically incapacitated and unable to manage your affairs. This is where power of attorney comes into effect. 

If you get injured and are medically incapable of managing your affairs, an attorney (which does not refer to a lawyer in this context) will make decisions (that you have already outlined in your estate plan) about your property, finances, personal life, and medical care.

Unlike a will, a power of attorney comes into effect while you’re still alive.

What Is The Purpose Of Estate Planning?

Estate planning is important because it makes wrapping up your affairs easier and ensures everything is taken care of according to your individual wishes.

What Is The Difference Between Making A Will And Estate Planning?

To put it simply, making a will IS estate planning. Your will is a key component of your estate plan, along with powers of attorney and any other arrangements you need to make regarding the transfer of your estate upon your death.

When Should I Start Estate Planning?

The ideal answer is that everyone should create an estate plan the moment they reach the age of majority. Unfortunately, we never know when we might face the unexpected, so it’s never too early to get a grasp on your estate plan.

That being said, there are some key life events when you should make estate planning a priority.

  • You recently got married or remarried, or are contemplating marriage – in many provinces, marriage revokes a will unless it was made in contemplation of marriage
  • You are currently in a common-law marriage 
  • You recently went through a common-law separation or divorce – in many provinces, divorce revokes gifts made to an ex, but in other provinces divorce doesn’t affect the provisions of your will
  • You have assets such as a home or multiple properties 
  • You have a child(ren) and/or other dependants
  • You own valuable heirlooms such as art or jewelry
  • You have assets that as a result of your death may cause tension among surviving family
  • You own a business or investments
  • You have a cause that you’d like to donate to upon your passing

If you fall into one of the above categories, you’re probably asking the following question...

4 Steps To Take When Estate Planning

Estate planning can feel overwhelming for a lot of individuals. While it is important, it’s actually quite simple and can be completed in a few easy steps.

1. Identify the key people involved

Before sitting down and writing your will, it’s essential to outline the list of people you’d like to fill the following key roles.

Executor and Estate Trustee: Ideally a spouse, relative or close friend, this person executes the wishes in your will, distributes funds to your beneficiaries, and can act on behalf of your business and financial interests.

Custodian(s) and Guardians(s) : A custodian is responsible for the physical custody of a minor if you (and the other parent) passes away. The guardian will assume management of the assets (ie. an inheritance). These roles are often filled by the same person and can be a single person or a couple that you trust to take on the role.

Emergency Financial Representative Or Attorney For Property: This person will make decisions about your property and finances if you are medically unable to do so yourself. Choose somebody you trust such as a spouse, relative or a close friend. The specific name of this role may vary from province to province.

Emergency Medical Care Representative Or Attorney For Personal Care: A spouse, relative or close friend with good judgment, this person will be the voice of your healthcare decisions if you are unable to communicate.

Witnesses: Your will and power of attorney documents will need to be printed and signed in the presence of two witnesses. You should take some time to consider who you’d like your witnesses to me. Keep in mind that not everyone can take on this role (ie. if they benefit from the will).

Backups: Specifying backups (also called substitutes) will add additional layers of certainty to your plan. Your initial choice may refuse the task, or be unable to act for other reasons, which is why it’s important to have a plan B.

2. Allocate your estate

After thinking about the key individuals who will be involved in your estate plan, you’ll want to consider what you actually want to do with everything you own. This includes money, large assets of financial value (such as a home or car), and even smaller things with sentimental value. 

The people to whom you pass on your belongings to from your estate after you pass away are called your beneficiaries. Beneficiaries can be chosen for specific items or even just a percentage of your estate. 

This is also a good step to consider if there are any charitable causes you’d like to contribute to after you pass away.

Learn more about beneficiaries and gifts here →

If you’re married or have a common-law partner, you may want to work together to make decisions on your shared assets or dependents. Some people may choose to leave everything to their surviving spouse if they pass away or to their children.

3. Outline other wishes

This includes any other wishes or requests you may have after you die. Some common requests that can be easily accommodated in your will include:

  • The age for which you’d like your children to receive their inheritance
  • Your funeral/burial wishes
  • How you'd like your business to be carried on

When it comes to other estate planning documents, such as your power of attorney (or living will), you’ll want to outline your wishes regarding:

  • Life support
  • Pain relief
  • Palliative care

Did you know? You can can also make a plan for your pets in your will. Read more about estate planning for pets here.

4. Formalize your wishes

While thinking through your wishes is a great first step, the most important thing is to finalize your plan in a legal will. You also want to make sure you’ve discussed your wishes with your loved ones. Without a formal plan that is legally binding, your estate will be distributed according to the default legislation in your province. In most situations, this won’t be what you have wanted.

For most Canadians, a simple estate planning platform like Willful is a quick and affordable way to create a comprehensive estate plan. However, depending on the complexity of your estate, you may want to visit a lawyer or financial advisor if you need advice.

If you need some guidance on deciding if Willful is right for you or where to start, our team is happy to chat! You can book a call with our team here.