Common Mistakes to Avoid When Planning your Estate in British Columbia

Estate planning is something that can be done at any time of your life. There's no need to wait until you're retired before beginning to do so. After all, the unexpected can happen at any time and it's better to have a plan of action in place and avoid complications for your loved ones after you've gone.

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What are Some Common Mistakes People Make When Planning Their Estate?

Estate planning is a complex process that many people avoid for understandable reasons. It can be unpleasant to focus on the thought of you not being around someday, but doing so is essential. The following points are some of the most common things that people in British Columbia overlook when making an estate plan.

• Creating an Accurate Will - Arguably the most common of these estate planning errors is failing to maintain an accurate will. Estate assets and wishes can change rather frequently, and failing to have a valid and up-to-date will can cause problems for your estate executor. A good rule of thumb is to revise your will every five years or so, and after any major life event such as marriages, deaths, or births.
  
• Failing to Update an Inventory of Estate Assets - Big-ticket items, such as cars, houses, and jewelry, will always be top of the list. Financial accounts, including digital banking accounts, savings accounts, and retirement accounts are also commonplace. But what about things like family heirlooms or newer digital assets such as cryptocurrency? Without a comprehensive list, things may get left behind, leaving your estate executor in the lurch as they try to play detective and find hidden assets. It's important to include joint accounts in this inventory as well, as the contents of these are immediately passed over to the remaining asset holder in the event of your death.
  
• Making a List of Debts (And Paying Off High-Interest Debt) - Recording debt is extremely important, especially when it comes to high-interest debts like credit cards. Recording a list of all debt you have, including your loans and mortgage, is essential for getting the most from your estate assets and ensuring your loved ones aren’t caught by surprise when half of their inheritance is used to pay off your estate’s debt during probate.
  
• Keeping Their Estate Unnecessarily Complicated - Various financial accounts, real estate spread across the world, or different enterprises and investments—all of these things can complicate an estate and make the settlement process long-winded, expensive, and difficult. A smart estate plan ensures that accounts and as many assets as possible are jointly-held, that retirement accounts name clear beneficiaries, and that estates are kept small through living inheritances—ie., gifting assets during your lifetime.

How Can These Pitfalls be Avoided?

With a little effort from yourself, these drawbacks can be avoided, thereby making the probate process as smooth as possible. These three tips can help you avoid causing problems for your estate executor and instead make things as stress-free as they can be at an already difficult time.

• Keep all important documents within a safe in your home. This will help ensure information regarding any debt or financial accounts you hold can be easily found. Also, consider keeping them on a USB drive or with a lawyer or your estate executor for an extra layer of security.
  
• Choose a trustworthy and competent estate executor. By getting someone who is up to the task, you'll make sure the entire process is straightforward. You should choose someone you know and that you believe will be able to handle the pressure of the role while grieving your loss. Make sure they know all there is to know about your estate assets and your wishes.
  
• Constantly update your will. While this usually only needs to happen after major events in your life, it's best to do it every few years at the least. This will help make the probate process easier and eliminate the chances that things end up where you don't want them to. Your will is arguably the most important document in relation to estate planning, so you should do your utmost to keep it as an accurate and timely reflection of your assets and your wishes.
  
• Name beneficiaries and create joint accounts whenever possible. By naming beneficiaries for retirement accounts such as TFSAs and RRSPs, as well as holding real estate and financial accounts jointly, you can ensure that these assets skip the probate process and go directly to their intended beneficiaries.

Clear Estate, Your Estate Planning Experts

As we've already mentioned, estate planning is complex, challenging, and can be pretty uncomfortable. With the help of our experts, estate planning in British Columbia has never been easier. We also offer expert assistance with estate settlement in British Columbia. If you're in need of either of these services you can schedule a free consultation with us. We'll be more than happy to help.