Do you have kids or maybe have one on the way? Most of my friends who are married with kids think that if they die without a will, their spouse will get everything. My friends are always surprised to find out that their kids would inherit more of their estate than their spouse, under the default rules in Quebec. And there are similar provisions in other provinces, depending on the size of your estate. To make matters worse, the Curateur Public in Quebec gets involved any time a child under age 18 inherits more than $25K directly.

I hope that by now I’ve convinced you that if you don’t have a proper will yet, you should move this to the top of your to-do list.

You probably already have a general sense that it’s important to document how you want your finances to be handled when you’re not around. Especially when there are others counting on you to be there for them. But what does it take to get that done? I’m Peter Guay of PWL Capital, and in today’s “Do It Together” segment, I’m going to get you started on the why, what and how of having a will.

First, some good news: It’s not as complicated as you might think … at least it doesn’t have to be.

I get it. Odds are, you’ll raise your children and eventually babysit their< children. That means you’ve already got a million things on your mind related to your kids’ upbringing: daycare, school, figuring out when to give them their own cell phone, and so on.

On top of that, it’s never fun to contemplate your own mortality. But there’s one thing I can guarantee: It’s a lot easier to plan for your death when you’re alive!

I’ve chosen this topic as the first one I want to cover in my new “Do It Together” financial planning series because it’s just that important. Almost everyone I know tends to procrastinate on getting it done. And yet, the stakes are so high. No matter how carefully you’ve otherwise secured your family’s future, it can all come undone in the blink of an eye if you die “intestate,” or in other words: without a will.

First, let me repeat the good news: I think one of the reasons so many families put off creating their will is that they actually overthink it. Of course there are circumstances that call for more complex estate planning. But if you’re a typical family with a house, maybe a cottage, and a few investment accounts, you don’t have to build a palatial pile of legal paperwork. A few basic documents cover it. Specifically, I recommend parents each establish a will, a power of attorney and a mandate (or living will) to ensure that your intentions are respected and your critical responsibilities can continue to be managed, no matter what happens to you.

Essentially, you’ve got three tasks in front of you

First, you need to be of sound mind when you create these legal documents. While this can and does come into play for the elderly or infirm, hopefully you’ve already got this one covered. By the way, this is another reason to take care of things today, so your loved ones will have one less awful thing to worry about if you are unexpectedly incapacitated.

Next, you want to answer these three questions:

1. Who should get your assets?

These are your beneficiaries. How much will each receive and when? What are the tax implications of giving to your spouse, or your kids. If you’re giving to your kids, should they get it all right away, or after a certain age? God forbid the whole family dies in a plane or car crash, then what? These are all the sort of questions you might want to discuss with your financial advisor before sitting down with your lawyer or notary.

2. Who will administer your estate?

This is called your Executor (or in Quebec, your Liquidator.) Ensuring that your estate is liquidated and distributed according to your wishes, and managed appropriately until the distributions are completed is a big responsibility. Be sure the people you designate are comfortable with the role. They should ideally have a financial or legal background … or at least be in a position to hire this sort of competent counsel. No one expects your executor to know all the ins and outs of settling an estate, but you need to know that they’ll turn to the right professionals for help in getting it done. And make sure to talk to them about it before just assigning them the responsibility. As I said, it’s a big one!

3. Who will take care of your kids and the assets you leave behind for them?

You don’t have to choose the same person or people to do both these roles. As with the administrator of your estate, talk to the people you‘re thinking of delegating these roles, to ensure they’re comfortable with the responsibility.

As you’re thinking through these three key questions, you’ll get going on your third task, which is reflecting your answers within those three documents I mentioned earlier: your will, your power of attorney, and a mandate, or living will. These combine to take care of your loved ones should you pass, and to take care of you and your varied interests should you become incapacitated or otherwise unable to manage your routine affairs or living arrangements.

 

Next up, I’ll take a look at closer look at those three documents. How they fit together, the purpose for each, and why you want to work on them as a matched set.