Updated: Nov 10, 2022
These estate planning myths may just be getting in the way of planning for your future. We debunk four common misconceptions about life and legacy planning.
There are a lot of tasks that you may be putting off because they don’t seem important today, even if they will provide a huge benefit to you and your loved ones in the future. Things like planning for retirement by contributing to your RRSP and TFSA accounts and yes, estate planning are easy to put aside.
Luckily, it's never too late to start planning for the future.
EstateBox’s mission is centred around not just preparing you for the future, but also better equipping you to live in the present moment. Nothing could be more helpful in setting you on that path than dismantling some of the systemic myths that keep people from starting life and legacy planning.
Here are four of the most common estate planning myths.
Estate planning myth 1: It’s only for the wealthy
Everyone stands to benefit from estate planning. There is no minimum amount of money or other assets you should have in your possession to plan for the future. Likewise, you don’t have to be a certain age to begin life and legacy planning.
If you have a bank account, car, home, investments, or other assets, you have the makings of an estate. And if you have a family (spouse, partner, children, or other dependents), life and legacy planning is a great way to ensure that you protect their interests and future needs.
Estate planning myth 2: A will is all you need
The first thing that probably comes to mind when you hear life and legacy planning or estate planning is a will.
You’re not legally required to prepare a will, but it’s strongly advised that you have one if you want to control who receives your remaining assets. If you don’t have a will, the laws in your province or territory are left to determine how your estate is divided.
While your will should speak to a large portion of your assets, it won’t encompass everything in your life. Things like life insurance policies, or qualified retirement accounts that have a beneficiary designation, transfer directly to the named beneficiaries and are not subject to probate.
It’s also important to have other documents in place like a power of attorney, advance healthcare directive, and letter of instruction. Uploading all these documents and information to your EstateBox ensures that they’re always easy to access.
Estate planning myth 3: Once set in stone, a plan doesn’t need to be revisited
Life rarely stays the same for long. With that being said, there is a widespread idea that a life and legacy plan doesn’t have to be revisited after it's created. However, when you think about how much change happens over the course of your lifetime, coupled with how much changes in the world around you, it’s inevitable that your life and legacy plan will have to change with you.
Here are just a few life changes that may necessitate a change to your life and legacy plan:
A change in your relationship status (marriage, common-law, divorce)
The death of an executor
A change in your relationship with an executor
Moving to another province, territory, or country
Adoption or birth of a child
EstateBox makes it easy to keep your life and legacy plan up to date, giving you the peace of mind to enjoy your life as it comes.
Estate planning myth #4: Probate is extremely costly and needs to be avoided
Probate is the legal process where the Court confirms the validity of a will after someone has died. Once probate is granted, the executor can then administer the estate. There’s a common assumption that it’s extremely costly and will make a serious dent in an estate. However, it’s not always as costly as some people assume and fees vary by province and territory. Take Manitoba for example. Probate fees in the province were eliminated entirely in late 2020. Other provinces and territories have various methods to calculate payment amounts. Some have flat fees for different estate amounts and others have formulas to calculate fees. In the Yukon, the most someone will pay is $140, if the estate is worth more than $25,000. Doing excessive planning, only to save $140 may not be worth the time and energy. Speak with an estate planning professional to see if probate is something you need to consider where you live.
Estate planning with EstateBox
Life and legacy planning can feel overwhelming, especially when you don’t know where to begin — or if you even need an estate plan. Remember, regardless of what you may have been told, estate planning isn’t just for the wealthy. Everyone has an estate.
An easy way to start your estate plan is to create an EstateBox. Our digital life and legacy planning platform is designed to guide you through uploading and organizing your most important documents in an easy-to-use, intuitive interface. With your important documents stored in one safe, secure location, you can grant edit or view access to your loved ones, executor, and financial advisors as needed.
Create your account today and enjoy a 60-day free trial (no credit card or code required) to help you get started on your life and legacy plan.
While we’re passionate about all things estate planning, we’re not professionals. We recommend speaking with your lawyer or financial advisor when putting together an estate plan.