Protecting your loved ones - Why make a will?

Estate planning is a critical piece of your overall financial plan and the cornerstone of your estate plan is your will.  While it is an emotional document and one many of us avoid, put off or just never get around to doing it is essential for you and your loved ones.  A will is simply a legal document which outlines your wishes following your death. On a financial basis a will tells your heirs, the government and any other interested party where you want your assets to go.  On a more personal level a will designates who will act as a guardian to any under-age children.  If an individual dies without a will, the administration of their estate is handled by a government appointee who determines how the estate will be divided among its’ legal heirs.

What type of information is contained in a will?

• Names the individual or individuals who are responsible for settling your estate.  This is referred to as the executor. 
• Names who you want your assets to go to and how they are to be distributed.  Those receiving your assets (individuals, charities or businesses) are the beneficiaries.

By completing a will you are able to determine financial strategies in advance which preserve the value of your assets for your heirs by minimizing income tax and probate fees. 

A living will is a similar type of legal document detailing your health care preferences should you become ill or incapacitated.  In the course of preparing a living will it is important to also set up powers of attorney for financial and health related decisions should you become unable to make these decisions yourself.   When deciding who your power of attorney or attorneys will be it is very important you have frank discussions and document your choices as it relates to your financial interests and your health care choices.  These individuals will act on your behalf so it is best to give them as much guidance as possible in advance.

Over the course of your lifetime your will needs to be reviewed and perhaps revised as circumstances change.  These circumstances can be related to changes in financial holdings, additional children, marital breakdown or any other number of circumstances. 

Many individuals complete a will on their own which can be legally binding.  However, it is best to speak with a professional to ensure all of your interests are covered and your estate is protected from additional taxes and fees.