Estate Planning: Protecting Large Purchases and Assets

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You might already know that having a will ensures there’s a plan in place to protect your loved ones if something were to happen to you. You might be surprised to hear that it’s also an important way to protect your most expensive assets and purchases.

Here are some ways you can use estate planning to protect those things you’ve worked so hard in life for:

Leaving Your Assets As Specific Gifts

In your will, you can name beneficiaries to receivespecific gifts. These are specific items or amounts of money left to a person, organization or charity. When it comes to important and expensive assets like your home, a car, or jewelry, you probably want to be the one to decide who they will be left to when you pass away. 

Specific gifts in your will allow you to do exactly that and formalize who you’d like to leave your assets to. The exception to this rule is jointly-owned assets that pass directly to the surviving owner. If you don’t have a will, your assets will likely be divided up based on the legislation in your province. The last thing you want is for your prized possessions you earmarked for a close friend to end up with your estranged sister instead.

Distributing Assets As Part Of Your Residual Estate

Your assets can also be passed on through your residual estate – everything you own after debts are paid and specific gifts are distributed. You can name one beneficiary to receive your entire residual estate or choose a number of beneficiaries to each receive a percentage of your residual estate. For added protection, it’s also a good idea to name backup beneficiaries to receive your estate if something were to happen to your primary beneficiaries. 

If you’ve forgotten to leave an important asset as a specific gift, you can feel at ease knowing it will be passed on to the person or people of your choice through your residual estate. 

Taking Care Of Assets In Medical Emergencies 

Your will is just one way you can protect large assets through estate planning. Once you own any assets of value, you should also get a power of attorney (POA) for property. A POA for property is a written, legal document that authorizes another person to act on your behalf and make financial and legal decisions if you were temporarily unable to do so due to illness or injury. This includes important tasks like paying your bills, managing your investments, collecting any bills owed to you, staying on top of maintenance or repairs to your home, and selling your home if necessary. 

Every adult should have a POA for property, but it’s especially important to make sure large assets like a home will be taken care of if you are suddenly unable to do so yourself. It provides peace of mind knowing that you aren’t at risk of your home falling into disrepair or being behind on your bills or mortgage payments.

There are a number of factors to consider when choosing someone to be your attorney. For example, whether they are trustworthy, responsible and organized enough to make critical decisions about your finances and assets during a tough time, and whether they live nearby.  There are many responsibilities for a power of attorney for property, so you want to make sure you’re choosing someone who can be contacted quickly to begin acting immediately in the event of an emergency. Legally, they also have to be a competent adult over the age of majority in your province.

Making Updates To Your Will 

Anytime you gain or sell a large asset, you should take a few minutes to update your will to reflect the change. For example, if you’ve left a specific item to a beneficiary in your will but recently moved and sold the item, it’s important to remove that gift from your will. If you don’t make the update, it becomes an adeemed gift which means that the beneficiary won’t receive it. 

Unfortunately it’s not always easy to determine whether a gift has adeemed which can lead to long court delays and added expenses as loved ones try to wrap up your estate. The easiest way to ensure that your assets are passed on exactly how you want them to is by keeping your estate plan up-to-date. 

Remember that anytime you update your will, you’ll need to print, sign, and witness it again to make it legally valid (except for British Columbia residents, who can complete this process digitally as of December 1st, 2021). With online platforms like Willful, you can easily update your will at any time for no additional cost.