End-of-life planning can be an emotional process — and something that many people put off. Though it may be tempting to push end-of-life planning to the bottom of your to-do list, delaying it may lead to a heavy burden for loved ones after you’re gone.
If you’re still in the process of getting your estate in order, you’re not alone. More than half of Canadians don’t have a will, according to a 2023 survey by Angus Reid Institute. But that statistic gets even more interesting when age is factored in: while 71 per cent of Canadians aged 65 and up have an up-to-date will, only 49 per cent of those in the 55 to 64 age bracket do. In the 35 to 44 age bracket, only 23 per cent have an up-to-date will in place. And, among those who did have a will in place, one in eight said their wills were out of date.
With this in mind, Yahoo Canada spoke to an expert about the biggest mistakes people make when it comes to end-of-life planning, and what Canadians should do instead when it comes to wills, estate planning and more.
Mistake no. 1: Not making time to create a plan
“Estate planning is a difficult conversation,” said Adam Mamdani, vice president of RBC Insurance. “We don’t like to think about end-of-life or about planning for your passing. We kind of live for today and in the moment.”
Of course, not having anything in place is the biggest mistake of all: “Not having a will, not having power of attorneys, not having named beneficiaries, not having an executor, those are the biggest mistakes,” Mamdani said.
That’s why it’s important to get your ducks in a row when it comes to your estate, your assets and your legacy. “If you don’t have a plan in place, it’s going to be very difficult for people who have survived you — it’ll cause a lot of hardship for them” when it comes to end-of-life care, he added.
We don’t like to think about end-of-life or about planning for your passing. We kind of live for today and in the moment.
Adam Mamdani, vice president of RBC Insurance
Ideally, Canadians should be proactive and carve out time for end-of-life planning. “It’s real. It happens to everybody, and you have to set aside the time,” Mamdani said.
Mistake no. 2: Not planning soon enough
“We have too many Canadians that are passing away without a will,” said Mamdani. “We have too many people who have not put plans in place, and it becomes very messy after the fact.” That’s why it’s important to prioritize end-of-life planning as soon as you start accumulating assets or property, or when your life circumstances change, such as when you get married, divorced or have children.
Creating a will, naming a power of attorney, assigning beneficiaries and organizing your documents are all crucial, Mamdani said, and while you don’t have to do it all at once, it’s important to start. “I always say you’re never too young to plan,” Mamdani said.
Regardless of your age, it’s a good idea to update your will and other documents when you get married, divorced or have children. (Getty Images)
(sturti via Getty Images)Mistake no. 3: Not considering your legacy
End-of-life planning isn’t just about who gets your stuff when you’re gone. It’s also about what kind of legacy you want to leave behind. “You’ve got to make sure your documents — will, power of attorney and named beneficiaries — are considering all your goals,” said Mamdani.
For example, do you want to set up a charitable part of your estate, or pass down money to your children or grandchildren, nieces or nephews? Whether you’re passing on your estate from one generation to the next, or to a charity, it’s essential to factor in tax planning. “There are tax implications when an estate moves to that next generation, and you want to make sure that you’ve taken care of that from a tax perspective,” he said.
Mistake no. 4: Overlooking the administrative burden
When someone passes, the executor of the will is faced with an administrative burden. As the person responsible for carrying out the deceased’s wishes — including managing and distributing the estate and representing the estate in probate court, among other considerations — it is an important duty. The executor does not have to be someone you’re related to, and sometimes, it might be better that it’s a third party. “You may want to consider having an organization or company named executor,” Mamdani said. “They can help with paperwork, closing off bank accounts, paying off debt, filing last income tax returns [and] maintaining property or assets until they’re sold.”
Mistake no. 5: Underestimating estate fees
“Look at ways to reduce your estate fees through insurance,” Mamdani said. “Life insurance in particular is a very important planning tool that can be used to help provide tax-free benefits to families so they’re not faced with high tax costs upon passing.” The money that comes from life insurance policies, for example, could be used to pay down debts, assets, maintain properties, or purchase anything your family may need. “It can be used as an income replacement tool in the event you’re no longer there,” he said.
Look for ways to reduce estate fees — such as life insurance policies. (Getty Images)
(d3sign via Getty Images)Mistake no. 6: Not seeking advice from an expert
Planning for the end of your life can be overwhelming — but you don’t have to do it alone. Mamdani suggests you get advice from an adviser who understands you. “Take the time to interview a couple of advisers – don’t just pick the one person you’ve spoken to,” he said. “You have to find someone you trust and who you can work with.” This adviser will have your best interest at heart and help you to navigate your financial affairs. “These affairs are private, so you should find someone who you’re comfortable with,” he adds.
You’ve got to make sure your documents — will, power of attorney and named beneficiaries — are considering all your goals.
Adam Mamdani
if you don’t have a plan guided by a person who is well-versed in this area, it can cause issues within your family or problems with your spouse. “A lot of people don’t know where to start if they don’t have a professional by their side,” Mamdani said.
“I always tell our clients that it’s important to interview two or three financial professionals. Find someone who you think would be the right fit for you, who will gel well with your family, who understands you and your situation, and who you think you can trust long-term.”
The bottom line
Wills, estate planning and other end-of-life topics don’t have to be scary. While it may be uncomfortable to think about what things will be like when you’re gone, making sure you have a solid plan in place can help your friends and family avoid issues after you pass on.
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