Say "estate" and most people picture someone with substantial assets, or someone elderly, and put the subject off indefinitely. In truth, anyone who has assets, debts, or people they love has something to plan — and the answer to "when" is usually sooner than expected.
Why not wait until you are older
An estate plan exists for an event that does not choose an age. Without a plan, assets are divided among the statutory heirs under the law, which may not match your intentions, and the administration process can take a long time — precisely the period when the family most needs money to live on.
The moments to start or review the plan
- Acquiring your first significant asset: a home, a car, investments.
- Marriage, or the birth of a child.
- Taking on a large debt, such as a mortgage, that you do not want falling on your family.
- Running a business or having partners, where succession is more complex than for an individual.
- Your parents growing older, when you may be both a recipient and a planner at the same time.
The basic tools to know
- A will — the document stating which assets go to whom. It can be made in several forms under the law; study the correct form or consult someone knowledgeable so that it is fully valid.
- Naming beneficiaries on a life insurance policy — the sum insured goes directly to the named beneficiary and generally does not wait for estate administration, making it the family's first source of liquidity.
- A list of assets and debts — write down what exists, where it is, and how to access it, and keep it somewhere a trusted person knows about.
- Passing assets on during your lifetime — giving some assets in advance, which raises gift and inheritance tax considerations to be studied under the current rules [check the latest information].
Life insurance and the estate plan
Life insurance features often in estate planning because it creates a defined lump sum for the family immediately, under the policy conditions. It can clear outstanding debt, fund living expenses while other assets are being dealt with, or make it easier to divide assets that are hard to split — one house among several children, for example.
Start today in three steps
First, list your assets and debts to see the whole picture. Second, check the named beneficiaries on every policy against your current intentions. Third, look into making a will, or consult a specialist according to the complexity of your assets. A good estate plan is not about death — it is love, organised in advance.