5 must-have estate planning conversations

Emily Purcha has been a financial planner for TD for over seven years. She fosters strong relationships with her clients to help them achieve personal and financial goals. Emily has a business degree as well as a political science degree from Brock University. She previously worked in TD retail banking and TD Direct Investing prior to becoming a financial planner. Here, she talks about the importance of having a will or estate plan and how to talk about it with family and others. If you would like to view the webinar on this subject please click here.

This article and webinar informs you about the five must-have estate planning conversations. “Often women are the catalysts for these money conversations and at TD we're dedicated to empowering women to take care of themselves and their loved ones through education about important wealth planning topics,” said Emily. 

"You're not alone"
Purcha’s goal is to help you better understand the steps you need to take to help protect and pass on your wealth, and how an advisor like herself can help throughout this whole process. “If you don’t have a will or estate plan, don’t worry, you are not alone. In one survey, only 35% of Canadians said they had a will in place that was up to date, and many said that they don't even have a will at all. Women are actually less likely to have a will in place than men,” added Emily. This is particularly worrisome as women statistically live longer than men and often are left managing their finances alone. Having a proper estate plan in place will protect your estate and your wishes for it. 

Estate planning is an important aspect of financial planning that often gets overlooked. It involves designating who will receive your assets and handle your responsibilities when you pass. It also ensures that your wishes are carried out even after you are gone. “The value of a good estate plan cannot be understated, as it brings comfort knowing that your assets will be inherited by the people, charities, or even pets, you want it to be,” said Purcha.

Dying without an estate plan means that provincial legislation will make decisions for you, not your family. This could lead to negative tax consequences, less wealth being passed on to your beneficiaries, and forfeiture of control over your estate and legacy.

Planning pays off
Betty White is a great example of being proactive with her estate planning. She had a written will that expressed her wishes and the legacy she wanted to leave behind, including a $5 million gift to her pets for their care and comfort. This is a great example of how an estate plan can honour your values and transfer your assets to the people and causes you love.

“It's easy to put off an estate plan because realistically who actually wants to talk about their death?,” said Emily. “But not having a good estate plan in place when you die can be a disaster for your family.” Purcha gave Aretha Franklin as a prime example. The famous soul singer died at 76 without an estate plan. She was worth an estimated US$80million.

The danger of not having a will
The absence of a written estate plan resulted in Franklin's four sons and her managers fighting in court for over three years without seeing any of the inheritance money. "My guess is that Aretha didn't want her family to be engaged in a prolonged family conflict, pay high legal fees and lose a sizable portion of their inheritance to the government," said Purcha.

“Do you really want provincial legislation to decide your funeral arrangements and who executes your will? Realistically the best way to avoid this situation is proactively creating an estate plan and reviewing it periodically,” added Emily.

The hardest part of the estate planning process according to Emily is communicating your wishes to your family. Around 70% of wealth transfers fail due to breakdown in family communication and trust. It is not usually the technical side of the estate planning that fails, but rather families not having open and honest money talks.

Here are the five must-have estate planning conversations Emily  recommends having sooner rather than later.

• Take time to reflect on your financial goals and emotionally connect with your future self to better understand how you want to divide up your estate.
• Ask yourself some tough financial questions to start a dialogue with yourself and figure out how you’d like your wealth to be distributed when you pass. To family, charities, friends, pets etc.

• Discuss your financial goals and plans for the future with your partner. Doing this gradually and calmly will help as both parties will often disagree on how to split up their estate.
• Be diligent and continue talking about your estate plan until both parties are on the same page
• Consider naming each other as executor and power of attorney.

• Educate your children on financial planning and estate planning.
• Discuss your estate plan and ensure that your children are aware of your wishes.
• Name a guardian for your children if you die while they are minors.

• Discuss your estate plan with your family members and ensure they are aware of your wishes
• Address any potential conflicts or misunderstandings to avoid breakdown in family communication and trust.

• Seek the advice of a professional financial advisor to ensure that your estate plan is in order and that all aspects of your financial life are being taken into consideration
• Work with your advisor to review your estate plan periodically and make any necessary changes to avoid unwanted outcomes for your family/friends after you pass.

If you would like Emily Purcha to talk you through this subject on our webinar please click here.

Wondering what comes next or need more advice? Download our Guide for Loved Ones to learn more.