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Are you making one of these estate planning mistakes?

Most people would benefit from creating an estate plan and  yet there are many who still need to undertake this task. According to a CIBC survey, close to a third of all Baby Boomers in the country do not have a will. Overall, LAWPRO reports that more than half of those who live in Canada have not created one.

Because a comprehensive plan encompasses more than just the distribution of assets, even those, who do not have much in the way of assets should have an estate plan. This is particularly true if you are a parent. Usually a will is a part of that plan. The failure to have a will could mean that your assets are distributed to individuals you do not want to have them. In addition, it could result in minor children or pets being cared for by someone you deem undesirable. 

While it is important for all to create a will, it is also important to make sure that it is done correctly. This usually means engaging the assistance of an estate planning lawyer. This individual can help you to avoid some of the mistakes commonly made.

One mistake that people who are not working with a lawyer may make is to not understand how a will can work for you. Readers may not be aware that it does not apply to all assets. Instead, there are certain types of assets that use beneficiary designations to determine who receives them. These include:

  • Insurance policies
  • Pensions
  • RRSPs
  • TFSAs

The beneficiaries are named outside of the will, as a part of the account or policy.

Another issue that may arise involves parents of young children. The failure to plan correctly could result in the children receiving an inheritance long before they are equipped to handle it. Though the age of majority is considered 18 for residents of Ontario, few teens are responsible enough to determine how to manage a large amount of money.

An estate planning lawyer can help to make sure matters such as these are handled correctly.

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