It may be one of those things that you and your spouse or partner have been meaning to get to – collating and organizing all the important paperwork and financial information should the unexpected occur and one of you passes away prematurely.
As Advisors, we see the full gamut of organization styles – from couples who’ve yet to establish a system related to all the key paperwork, to those who have well-organized files. We’ve also encountered different levels of engagement with some couples being mutually informed about their joint and individual financial affairs to couples in which money matters fall to just one party. Regardless, we can work together with you to organize all your key financial information through our Estate Record Keeper. That includes inputting all your key legal, banking, investment, property, insurance and tax information. This confidential information remains secure and can be accessed as your circumstances dictate.
As a couple, it’s never too early to arrange your wills. In fact, it is critical to be prepared for the unexpected – a move that will ensure your surviving spouse or partner and any dependents are well taken care of. The alternative – no will – can leave your surviving spouse in a far more vulnerable position.
We work with a specialist team experienced in will and estate planning to help ensure that your will is developed in the most tax-efficient manner. And we believe the cost will be returned many times over through tax savings, protection of your spouse and beneficiaries, and peace of mind.
In the event that you die without a will, which is referred to as Intestacy, the government immediately steps in to “help”. While you may want all your assets to go to your spouse, the legislation often splits the assets between your spouse and children. This could leave your spouse with insufficient assets to maintain their lifestyle while giving a large portion of the estate to children who may not require the funds. If the assets pass to the children, your spouse as the surviving parent may not be able to access those assets for the benefit of the children while they are minors. Before you decide you don’t need a will, make sure you understand what will happen to your estate without one.
It’s important as a couple to discuss and determine how much life insurance you need. The Canadian Life and Health Insurance Association (CLHIA) says a ballpark measure that is sometimes used is between five and seven times current net income. Better still, as your Advisor, my team and I can undertake a financial needs analysis, which can help provide a more complete picture of the capital you may need as a widowed spouse or partner. This analysis outlines the assets that would be available, liabilities you would have to deal with and your widow/widower’s continuing needs for income.
Remember to keep your overall plan on track by reviewing and updating key documents like your will and insurance policies.