Do you know what happens to your debt when you die?
A majority of Canadian adults either do not know the answer to this question, or are misinformed about how their debt will be treated upon their passing, according to a report by the Lawyers’ Professional Indemnity Company (LawPRO.)
This revelation comes from the same institution that reported a survey in May 2012, finding that more than one half of Canadians do not have a signed will and 71 per cent of Canadian adults do not have a signed power of authority.
The combined impact of these studies may reveal a wide-spread problem in the area of estate planning across the country. Wills and powers of attorney are legal documents that help ensure your wishes are carried out upon becoming incapacitated and ultimately passing. These documents are crucial to the protection of your interests and need to be carefully thought out and prepared. That such a high number of adults haven’t taken the time to do so is alarming given the possible repercussions.
Some people tend to think about the future and take steps, like drafting a will, upon the occurrence of certain milestones in life, such as the birth of children, changes in martial status or the purchase of a home.
Age and cost are often cited as the reasons for not preparing testamentary documents. However, many of the milestone decisions cited are generally made when people are in the early stages of their adult life and the cost of preparing a will is not as expensive as many might think. Having a lawyer assist with the drafting significantly reduces risk, especially in complicated family situations.
Although often uncomfortable, talking about what will happen after your death is important, especially if one of your goals is to help provide your family with financial comfort.
If your goal is not financially related, such as leaving beloved possessions to specific individuals, it is still important to discuss your wishes for the future and to plan ahead. Becoming informed about your options and the accompanying consequences, such as how your debt will be treated, is the first step in the right direction.
Have a wonderful day,