Why you need to talk about estate planning.

Alright, let’s tackle a topic that doesn’t get nearly enough attention in the HENRY (High Earners, Not Rich Yet) community – estate planning. If you’re a HENRY or aspire to be one, you probably have more assets under your belt than you realize. So, let’s break it down.

What’s in Your Estate?

Your estate isn’t just about the big bucks and fancy cars. It’s a bit more…eclectic:

Your Stuff: 

Your gadgets, jewelry, that collection of vintage video games, even your compass pass – it’s all part of the deal. In many parts of Canada, if you don’t have a spouse and meet your maker, everything reverts to your folks. So, yeah, your parents could end up with your Nintendo Switch.

Retirement Accounts:

That RRSP, TFSA, or LIRA and any other retirement stash you’ve got going – they’re all part of your estate.

Life Insurance Policies:

Whether you’ve got personal life insurance or the one your employer threw in, it’s part of the package.

Pets:

Yep, even Fido and Whiskers are on the list. You can designate a caretaker for your fur babies and set up a fund for their care in your estate plan. Because let’s face it, you don’t want your pets going to the wrong hands, right?

Kids:

If you’ve got little ones, naming guardians is a must. You can also create a trust to manage their finances, just in case. After all, you wouldn’t want your kids to inherit everything when they reach adulthood, right?

Digital Assets:

Think about all those embarrassing messages and files you’ve sent over the years. You probably don’t want your parents or family digging through your Instagram messages if something happens to you. Include your online accounts and passwords securely in your estate planning.

Sentimental Stuff:

Those items that mean the world to you but might not have a high dollar value. They matter, and you should decide what happens to them when you’re not around to make that call.

Don’t Rely on Defaults

Here’s a kicker – there are defaults in place if you don’t have your estate plan sorted out. In many cases, if you’re single and something happens to you, your assets go straight to your parents. Some people might be okay with that, but it’s not for everyone.

Partners, Significant Others, and Spouses

Don’t wait until you tie the knot to think about estate planning. Many millennials are opting for committed relationships without the traditional marriage paperwork. If that’s you, make sure you’ve got the right documents in place, granting each other access and decision-making power.

Prenups might not sound romantic, but they’re like an insurance policy for your future. It’s better to have one and not need it than the other way around. You’ve gotta love yourself before you can love someone else, and getting a prenup? Well, that’s the most romantic thing you can do for yourself.

Your Other Partner

We’re talking about business partners, this isn’t Love Island. Business succession planning is a bit like having a solid bench in sports. It’s not just about the star players; it’s about who takes over when the MVP retires. In the business world, that means having a plan in place for the future, ensuring a smooth transition and continued success. Whether you’re the owner of a small startup or a major corporation, remember, it’s not just about the game today; it’s about securing the dynasty.

Making Plans for the Worst

Now that you’re sold on the idea of estate planning, let’s get practical. Here’s what you need to do:

Enduring or continuing Power of Attorney (POA) and Living Will and Healthcare Proxy:

These are your lifelines if you can’t make decisions for yourself. The POA lets someone manage your finances, the Living Will expresses your health and end-of-life care wishes, and the Healthcare Proxy designates someone to make medical decisions for you.

Last Will and Testament:

You probably know about this one. It decides where your assets go after you’re gone. It might seem a bit early to be thinking about a will in your 20s or 30s, but it’s better to be prepared than to leave your loved ones guessing.

Beneficiaries:

Your bank accounts, life insurance, and retirement accounts all have beneficiaries. Make sure they’re up to date. You don’t want an ex as the beneficiary of your RRSP from your first job, trust me.

Business agreements:

Things like having a funded Buy-Sell agreement with your partners. Your spouse may have zero interest in taking over your butcher shop.

So there you have it, folks. Estate planning might not be the most exciting topic, but it’s essential. Don’t wait for life to throw you a curveball; get your financial game plan in order now. You’ll thank yourself later, and so will your loved ones.