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The Companion Advisor: Insurance
Preparing for your death

We often hear stories of people who die and leave financial problems for their families to settle. Sometimes it's these stories that make us stop and think. Who will take care of my family? What kind of choices will my family have without my income?

Preparing for your own death is part of any well-made financial plan. There are two elements that you must discuss with your financial advisor. The first is life insurance. The second is preparing a will. This is true whether you are the major breadwinner, working part-time or staying at home with children.

The recovery process to cope with death can be long and difficult. Emotions, decisions and details can be overwhelming and confusing. In case of your death, you need to protect the people you care about by making some provision to replace your income or the value you have to your family as a caregiver.

Obtaining life insurance and writing a will

Life insurance is about alleviating financial stress during a highly emotional and difficult time. A life insurance policy can provide financial security and stability. Proceeds from the policy can go towards mortgage payments, the creation of an income stream, or anything that will make coping with the loss of a loved one easier. With financial concerns no longer an issue, family members can focus on piecing their lives back together. The grieving process is made easier when you family's financial future is secure.

Having a written will that spells out the disposition of your estate and names your executors will also make the process easier for your family. Instead of trying to guess what your wishes might have been, your family can follow clear instructions that you have worked out after careful consideration. Your advisor cannot prepare a will for you - that is the job of a lawyer - but he or she can help you undertake the financial planning that goes into writing a will.

If you die without a will, provincial law determines how your assets will be disposed. The rules vary from one province to the next. Some say the spouse should get half the matrimonial assets, or assets acquired during a marriage, and then assigns a portion to children, parents and other living relatives. But some may just assign a flat amount to your spouse, without regard to whether it is enough to live on.

In your will you should decide who will inherit the following:

Real estate
Business assets
Family heirlooms
Life insurance policies
Retirement savings
Dependent children

Avoiding probate costs

A will can help protect your estate from probate costs. Probate is a fee levied by the province to settle the terms of an estate. Unless you write a will, anything you own exclusively is part of "probate" property and must pass through a meticulous legal process to get from your name to those of your loved ones. If you have made a will, the language in that document controls who gets what. If you don't have a will, the province makes the decisions, while your family has to push your estate through a complex legal process.

There are so many uncertainties if you should die unexpectedly and it's too late to change things after you're gone. Put your mind at ease about your own family's future by settling your insurance needs and writing your will. Contact a qualified insurance or financial advisor, such as Fiscal Agents to help you create a comprehensive plan that includes insurance along with your other financial planning needs. Fiscal Agents is a member of the Canadian Association of Insurance and Financial Advisors (CAIFA) and has the training and experience that is essential to help you make the right choices.

This article is reprinted with permission from the Canadian Association of Insurance and Financial Advisors (CAIFA),

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