If you have or are in the midst of creating an estate plan, congratulations! Your willingness to take the time to let your loved ones know how you would like your assets distributed upon your death could make things easier for those you left behind, after you are gone. If you are going to undertake this endeavour it is important that you do it correctly. Doing so could be the difference between your estate plan being successful or not. Here are two mistakes that many Canadians may be making in the course of creating an estate plan.
The first mistake is failing to ensure that the estate plan is complete. While a will alone is better than nothing, a generic will providing unclear generic directives may be difficult to follow. Especially if the disposition in the will appears to contradict with other documents created outside it, such as different letters, notes or memoranda. Taking the time to clearly express your wishes would help avoiding disagreements between your executors and heirs.
Selecting the wrong estate trustee
The next mistake people sometimes make is failing to give a lot of thought as to whom to name as the estate trustee (executor) of the estate. In addition to administering the will, the persons appointed as the estate trustees will also be responsible, among other matters, for the following:
- Collecting insurance proceeds
- Accounting for the estate financial activities
- Having to assess the value of estate assets and liabilities
- Looking after estate tax returns being filed
- Making funeral arrangements
Estate planning can be complicated. Accordingly, many find it beneficial to work with a lawyer, who has a track record of helping other individuals in the same or similar situation.