In the realm of personal finance, certain activities are well within the capability of intelligent do-it-yourselfers. Those with the time and inclination are welcome to try their luck picking their own stocks or ETFs and implementing the trades at a discount brokerage – although even then I think a fee-only financial planner or money coach would be a worthwhile investment as a “sober source of second thought.”
Another subset of personal finance well-suited to knowledgeable do-it-yourselfers is tax, at least if you’re a salaried employee with a relatively simple tax situation: RRSPs, a few taxable investments, charitable receipts, T-4 slips and the like. Millions of Canadians fit this profile and the major tax software packages can handle them. Even then, though, every 5th year or so you should probably check in with a tax professional. If you’re an incorporated business owner, go to an accountant.
However, estate planning is not in my opinion one of the personal finance specialties that’s at all well-suited to do-it-yourselfers. I’d recommend that you get thee to an expert: a professional specialist in estate planning and/or wills and estate law.
Unlike investing, which can happen every few weeks, or preparing taxes, which occurs every April, estate planning is a relatively infrequent occurrence. It’s not going to happen so often that you can afford to wing it and hope for the best, then learn by experience.
Generally, when it comes to wills and estates, the first time around is when as a young or not-so-young adult you come face to face with the imminent mortality of your own parents. If they have any wealth at all, odds are this is mostly out of your hands anyway: they’ve probably already availed themselves of the services of an estate planner. You may have had “the talk” once or twice with them about what will happen one day in the far future when they pass away. If you have siblings, you probably have a good idea of who will get what but beyond being a potential beneficiary, the planning aspect of your parents’ estate is probably in the hands of other people: your parents and the professionals they’ve engaged (if they’re wise).
However, upon the death of your first parent or as this event approaches in the case of non-sudden illness, you will likely find yourself more involved with issues surrounding the estate and its’ ultimate disposition. Indeed, when your second parent also passes on, you’ll probably become well familiar with the basics of estate planning. You’ll get called in to the offices of a wills and estates lawyer, along with any siblings. Together, you will experience the bittersweet phenomenon of a will and possible inheritance. Bitter because after all, wouldn’t you rather still have mum and dad around to share the good times with? Sweet in part, because there may be a pot of money for you that will be a good head start on your own retirement.
The second time around for estate planning is typically a few decades after that first experience. You are by now (technically) a middle-aged orphan, having buried your parents. (For simplicity here we’ll assume no remarriage, that they’re the “till death do us part” types.) Odds are you’re married and have children of your own now and slowly it dawns on you that you and your spouse are not going to live forever either.
If you’re old enough to be considering retirement in the not-too-distant future, you’re also old enough to start thinking about your estate and the legacy you leave the world at large. In short, it’s time to think about how to divide your worldly possessions, the house, a cottage if applicable, and whatever financial wealth you have accumulated. The latter may perhaps include some of the money you inherited when you first experienced the phenomenon of intergenerational wealth transfer.
To reiterate, estate planning is not for amateurs. There are many estate-planning books on the market and most contain horror stories of the internecine squabbles that can result when misunderstandings arise from hastily drawn do-it-yourself will kits. You don’t want to be a case study in the next edition of such books, so do yourself and your heirs a favour and do it right in the first place.