Financial Planning - Tax Planning - Estate Planning - Life Planning - what is it and when does it all start . . .
by Doug Cumpson
(Hamilton, Ontario, Canada)
There is a lot more to the story on getting your taxes done - and it starts with edification on tax law- especially in business where the issues are even more complex
While many people in their twenties may think it’s too early to think about estate planning, trusts and estates - there several compelling reasons for having an estate plan in place.
“Perhaps the term ‘estate planning’ needs to be rebranded as ‘life planning,’
“Many people assume you have a will because you want to determine where your assets will go when you die, and that’s true . . .
However, another equally important reason for having a will is that you get to appoint an executor to administer your estate.”
If you die without a will, the Succession Law Reform Act will dictate where your assets go, she says. You may not like where the statute says those assets should go . . . the intestacy rules do not provide a hierarchy. It doesn't say if you die with a spouse, your spouse becomes your executor.
There's a practise that it should be the closest next of kin who has priority, but there's no legislation that sets out the order.
People in their 20s may not think they have any noteworthy assets but most people have a bank account and many have RRSPs, own cars and have digital assets like computers and laptops.
People accumulate things so having a will is important and you get to decide who is going to deal with
administering your estate, another reason why people in their 20s may avoid estate planning is because thinking about death or capacity issues can be uncomfortable or may seem like something that won’t happen until you’re much older.
The reality is that you never know what’s going to happen, and as a result choosing a power of attorney is another important component of “life planning.” For example, if you don’t appoint a power of attorney and you come from a large family or a family with two sets of parents, there could be potential disputes over your care.
Everyone should have a power of attorney no matter what your age because you never know what's going to happen, you could get injured in a car accident and you need to think about things like who you want dealing with the doctors on your behalf.
Powers of Attorney should be prepared as soon as reaching the age of majority. Regarding the preparation of a Will it makes sense to prepare a Will only when you have some form of assets. That can be in your 20's or even earlier. Another reason why even the very young should buy a minimum monthly life insurance policy and have a complete Will with Power of Attorney etc.
GB Taxes & Accounting
Serving South Central Ontario