An Estate Plan—Do You Really Need One?

Three years ago, a friend, Cam, told me about how his dad didn't see death coming. He didn't know that a truck would take him out while he was out doing errands for his wife.

He had no idea he was not going to return home. It was almost six months to the day since his mother had had a major stroke while she was in California.

His parents didn't have any insurance. So, they had to stabilize his mother to get her back home. That event essentially bankrupted them.

By the time all eight children came together, his mom had not seen her husband for five days. She looked around the room for him, and when they told her, she was crushed.

Because of her condition, she was never able to tell them if there was a Will somewhere.

Cam's mom lived for another five years after her massive stroke. During that time, everyone searched the family home to find a copy of a Will.

No one found anything, and this created a unique problem. Cam admitted his dad and mom should have written a Will to let everyone know what their wishes were.

Cam said, "There would not have been the breakdown in the family like there is today if my parents had said: on our death, sell the cottage, or if they had something else lined up. But they had nothing." He went on to say.

If you've got any wealth, even a car, and you die, make sure somebody knows who is going to get the car. If you've got any assets, do the right thing, and get a lawyer involved to handle it all so there are no questions.

The pandemic has affected how we will be living our lives going forward. For many, it probably means having to think about death for the first time.

At the same time, while the pandemic has driven many people to have conversations about estate and legacy planning, there's a gap between talking about it and actually doing something.

This could be due to avoiding, procrastinating or for many, they just don't care what happens to their family if an emergency happens. It is a fact most Canadians do not have a Will or estate plan. Men are more likely to have a Will than women.

Some of the factors holding back many Canadians from getting a Will could include cost, no time or not knowing how to get started. 

The other problem is families bury their heads in the sand and do nothing. Or they believe that since everyone gets along, there is no need to talk about the subject.

Without Wills or an estate plan, adult children are faced with the reality that they will have the responsibility for handling their parent's end-of-life wishes when the time comes. Unfortunately, intensive care is no place to find out there is no Will.

Plus, adult children are also faced with their own mortality. The pandemic has made generations step into the role of the sandwich generation and find themselves handling their parents' financial affairs as well as their own. They will probably be expected to be the executors, yet they have absolutely no idea what to do or where to start.

Have the conversation (with family); it's uncomfortable but get the conversation over and done with. Put it out in the open and make a file with your Will in it, visible so somebody could trip over it.

This includes your digital assets. This means if you have an email address, social media accounts, bank online or have information stored in the cloud, you must make sure that your family or executor knows where all logins and passwords are kept.

As everyone's online presence is so common today, digital assets are everything you have ever created, purchased or done online. You must be aware of criminals who will often target the deceased.

Think about what kind of legacy you want to leave behind.

Or do you want to leave a legacy and a mess?

It's an opportunity for theft and fraud. For example, passcodes, such as a mother's maiden name, may be printed in the obituary in the local newspaper.

For those without a conscience, it may be too easy to resist. The most common method of committing online fraud is for the criminal to obtain sufficient information to be able to impersonate the deceased.

Even if the person is deceased, if accounts are active, there is nothing to prevent them from withdrawing funds, making purchases, and even placing substantial mortgages against the property.

When people die, it's traumatic, and you're not going to find a folder in the middle of trauma if it's hidden somewhere. It's got to be easy to find by the right people.

The file must contain the information your executor is going to need because you don't want people hunting down things. Make sure people know they're going to see all this information, including digital information, in this folder. 

Cam said to me," If you want your kids to have friendships and family after your passing, do the right thing. Make a Will and make sure you have a Power of Attorney for your health as well. Do those things, and you will help your family more than you helped them with their diaper changes."

Having an up-to-date estate plan with a valid Will helps to ensure that your dependents and heirs will be provided for according to your wishes.

Why it is important to have an estate plan:

•In case of emergency, to provide for your spouse and dependents.

•To allow your executor to distribute your assets according to your wishes, not the courts.

•You are the one to choose the guardian for minor children and their care, not the courts.

Over coffee one day, my friend Danielle made me understand why having an estate plan was so important to her.

As a single mother with two small children, she has named her longtime friend Rachel as executor, and Rachel knew where the Will was kept and the other important documents. She also has Power of Attorney in case of incapacity.

Danielle wanted to make sure she did not repeat her parents' mistakes when her future was decided in the parking lot of a funeral home when she was a child. 

Her mother died when Danielle was age 5. Her father died at age 39 when Danielle was 12. When her dad passed away with no Will, the family decided in the parking lot of the funeral home that one aunt and uncle would take her, while another aunt and uncle took her brother. 

Danielle credits her aunt and uncle for making her the strong, confident woman she is today. She has memories of a happy childhood. She felt she never missed out on anything.

Though it was extremely time-consuming and, at times, painful for them, since there was no Will, the state was in control of the money. Every time her aunt and uncle needed money for her care, they had to go to court and explain what every dollar was being used for.

Parents of children under 18 are even less likely to have Wills; without an estate plan, the state will decide the future of your children. You do need an estate plan to avoid the breakdown of family relationships.

Parents with minor children should agree on what they are looking for in a guardian named in their Wills. Is your chosen guardian willing act as guardian? What is their age and health? What is their financial situation? Where will the children live? 

The biggest dangers and problems that cause stress:

•You have not taken the time to prepare for the unexpected.  Avoiding talking about death will not make the issue go away.

•You do not have a Will.

•You have not done all you can to protect your family.

The steps you need to take and where to get the help:

•Find and meet with an estate lawyer.

•Work with them to prepare an estate plan, which includes a Will.

•Make health care directives, including Power of Attorney for personal care (including whether you want life-saving measures)

•Make a financial Power of Attorney.

Let your family know where this important information is kept, and you can rest easy knowing you have prepared your family in case an unexpected event occurs.

Think about what kind of legacy you want to leave behind. Or do you want to leave a legacy and a mess?

David E. Edey is a Certified Executor Advisor and the author of   Executor Help – How to Settle an Estate,  Pick an Executor and Avoid Family Fights. www.davidedey.com