As the colder months begin to set in, many people are already starting to think about and plan their winter holidays. Before jetting off, whether it be for a multi-month stay to escape the snow or a week-long holiday in the sun, it is important to ensure that you have your affairs in order before you leave. Taking the time to properly review and amend your estate plan before leaving is a great way to give yourself peace of mind that should something happen while you’re away, your assets and health care decisions will be managed in accordance with your wishes.
We’ve highlighted some of the key reasons why you should review your estate plan before traveling this winter.
Draft or Review & Update Estate Plan
If you’ve been meaning to either start working on an estate plan or amend a current one, use your trip as a deadline to get it done. There are three key elements of a basic estate plan that you should focus on: a will, a power of attorney, and a representation agreement. In your will, you can name an executor, a guardian of your children, and determine how your assets will be allocated amongst beneficiaries. Power of attorney and representation agreements allow you to grant one or more people the authority to manage your financial affairs and health care decisions in the event you lose capacity. It’s important to remember that if you haven’t specifically appointed someone as an attorney or representative, then a court application is required to grant someone the ability to make financial and healthcare decisions on your behalf.
Review RRSP & Insurance Beneficiary Designations
You’ll also want to take some time to review any RRIF, RRSP, TFSA and insurance beneficiary designations. You may find that your beneficiaries will need to be updated if your relationships have changed or if the person you designated has passed away. If a beneficiary that you’ve listed is incapacitated or is a minor, review whether the beneficiary designation includes appropriate trust terms.
Review Asset Ownership
It’s also important to confirm how you own investments, bank accounts, and land. In whose name is the asset registered? Are you a sole owner or a joint owner? If you are a joint owner, do you intend the asset to go to the surviving joint owner on your death or form part of your estate? It is a good idea to document your intention for how jointly owned assets are to transfer on death. If there are two names on the title to land, clarify whether the ownership is ‘joint’ or tenants in common. How the property is registered on title will affect how it transfers on your death.
Organize Important Documents
Taking the time to organize your financial and personal documents before leaving on your trip is essential, as it can make it easier for an attorney or executor to manage your affairs. With so much being done online now, it is important to have your digital assets organized. Start by making a list of your online accounts along with any login information that might be required. Don’t forget to include social media profiles such as LinkedIn, Facebook or Instagram, as well as blogs.
Discuss Your Plan with Your Children or Those You Have Appointed
Once you’ve gotten your estate plan in place and your documents organized it’s important to take the time to discuss your plan with your children or those whom you have appointed as your executor, attorney, or representative. It’s not necessary to go through all your financial statements and bank details, but it is important that they know that you’ve put a plan in place and that they know where to obtain more detail should something happen to you. Taking the time to help them understand your estate plan can help them be better prepared for what will need to be done down the road.
It is always a good idea to be prepared for the unexpected, so reviewing and updating your estate plan before traveling is a great way to ensure that you have everything you need in order, should something happen while you are away.