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Key functions of an estate plan

The key function of an estate plan is to provide financial security for your family. But a good estate plan does much more than that. It looks at the bigger picture: the choices, challenges and options your spouse or partner and children would have if something happened to you.

Yes, these are emotional decisions that can be tougher than financial ones. And there’s no magic formula that works for everyone; your choices are deeply personal. But it’s important that you make these decisions now in order to avoid leaving the burden to your grieving family.

So think about your personal values and how these best reflect your wishes for your family’s emotional, physical, intellectual, social and financial well-being. For example:

• Naming a guardian. If both you and your spouse/partner were gone, who would care for your children? When choosing a guardian or tutor, first discuss your priorities. For instance, if you want your children to be able to grow up with their cousins, you might name your sibling as guardian. If you want them to be able to stay in the same community, you might choose a neighbour who is close to your children. Discuss your intentions with the potential guardians you have in mind to make sure they are comfortable with your plans.
• Providing for your family. If you predecease your spouse/partner, what support will be available to him (or her) as a suddenly single parent? Would your spouse need to hire a caregiver or, alternatively, stop working to stay home for several months or years? Would the mortgage need to be paid off after your death? Based on your choices, you can use insurance to see that your wishes are carried out.
• Planning for future goals. You and your spouse also need to discuss how the insurance proceeds and other assets should be managed. For example, you may want funds set aside for your children’s higher education or even for their first home.
• Choosing an executor. Your executor, estate trustee or liquidator is responsible for carrying out the terms of your will. You need to choose someone trustworthy for this challenging and time-consuming job. Many people name their spouse. But if your spouse will be busy caring for children, a better choice might be a relative or a close friend. If your estate is complex, consider naming a trusted professional, such as a chartered accountant, legal advisor or corporate executor.
• Naming powers of attorney. When selecting a representative under a mandate or continuing power of attorney for property, choose someone you trust who can also handle your finances responsibly. Similarly, a power of attorney for personal care should be someone you consider to have sound judgment and who also understands your personal values concerning health and long-term care.

Passing on your wishes

Your and your spouse/partner’s wills, bequests, insurance policies and trust arrangements are all key elements of your overall plan. With professional advice, you can design a complete estate plan that reflects your values and meets your goals.