Preparing for your Estate Planning Meeting
"I say to you: Make Perfect Your Will. I say: Take no thought of the harvest. But only of the proper sowing". T.S. Eliot, Choruses from the Rock.
These words, written a century ago, still resonate today. Careful estate planning can ensure the most effective transfer of wealth to the next generation. Yesterday I blogged on the emotional toll of estate planning and the reluctance many clients feel when thinking about, and planning for, their own demise. Once you've decided to draw up a will and other estate planning documents, are there ways to prepare for your estate planning meeting with a lawyer to make the process run more smoothly?
It helps to think about the big picture of what you hope to achieve and the reasons for preparing your estate plan. In his book "Advising Families on Succession Planning: The High Price of Not Talking", Ian Hull considers what an estate plan should accomplish. First, you want to ensure your assets go the the people you intend; second, you want to reduce your estate tax bill; and third, you want to protect your assets if you become disabled.
To ensure the assets go the the people you intend, your lawyer at the initial estate planning meeting will ask about the nature and extent of your assets. Although exact figures are not required, approximate values are essential and the manner of ownership must be determined. You will be asked questions such as where any real estate is located, and whether it is held jointly or as tenants in common. Life insurance policies, RRSP's and RIF's will be considered and beneficiary designations will be addressed. You will also need to think about whom you wish to appoint as the estate trustee (also known as the executor) of your estate, the guardians of your minor children, and the attorney(s) for your powers of attorney. The lawyer will assist you with selecting appropriate persons or entities to act in this capacity and will canvass the pros and cons of appointing more than one person in certain situations. Individual family dynamics are critical to discuss with your lawyer. Appointing alternate executors and attorneys in the event the first named one is unable or unwilling to act is often advisable as well. Although many clients have an idea of where they want their assets to go (i.e. to my wife and then to my children), they are often not prepared for questions pertaining to alternate beneficiaries in the event all of the immediate family passes away in a common accident.
In the event charities are named it helps to be as specific as possible in naming the charity and allowing for a general charitable intent in the event such charitable organization is no longer in existence at the time of your death.
Many lawyers will also send out questionnaires to new clients, to assist with the preparation for the estate planning process and to provide the client with ample time to consider their wishes.
Sarah Hyndman Fitzpatrick
