9 steps to your estate plan

Estate planning doesn’t have to be done all at once. We break it down into steps.

Estate planning: A guide to protecting your legacy »

Step 1: Asset List

Go through your home (inside and out) and make a list of all items worth $100 or more. Then add the non-physical assets you own, such as bank accounts, investment accounts and insurance policies. This is your asset list.

Step 2: Debt List

Next, list all your outstanding debts, such as mortgages or auto loans, as well as all active credit cards or lines of credit without balances.

Step 3: Membership List

The next list is for all the organizations you are a member of: the CAA auto club, Costco, your health club and your college alumni association. Lawyers will charge $150 or more to notify each association or organization of your death: provide a list, however, and your family can do it for nothing. Moreover, some associations offer life insurance benefits to their members.

Step 4: Name Charities

List the specific charities close to your heart if you want donations made.

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Step 5: Name Your Beneficiaries

Naming beneficiaries on your registered accounts (such as RRSPs*) and insurance policies ensures the money will be distributed to your heirs directly, which avoids the delay and costs associated with probate. Also, when life events change, such as getting a divorce, remember to update your named beneficiaries.

Step 6: Big Questions

While you should have a professional draft your will, you can start the discussions before you visit your lawyer. Talk to your spouse about how you would like to distribute your estate. If you don’t know where to start, use free online will kits to frame the discussion. This is not about being precise as much as it’s about determining what you know and what you need to find out.

Step 7: Choose Responsible Family and Friends

One of the biggest—and most important—decisions in an estate plan is who will be named as your estate administrator (executor), your power of attorney and the guardian of your children. Pascoe advises his clients to consider appointing different people to different roles. “Appoint a sibling from both the husband’s family and from the wife’s family to be estate trustees—the people who look after the money. Then consider a different person—a natural caregiver—to be the custodian for your children.” The key is to pick competent, trustworthy people, and then to spread out the responsibility.

Step 8: Talk to the Pros

Now it’s time to call in the professionals. If you’re concerned you don’t have enough insurance, contact an insurance provider. To minimize estate taxes, make an appointment with your accountant. If you have no special concerns, an estate lawyer may be able to look after everything. A basic will can cost as little as $500, while a basic estate plan will set you back $1,500 to $2,500. (If your situation is more complicated—for example, you have a family business, or a child with special needs, or you’re remarried—the cost can climb to several thousand dollars.)

Step 9: Review and Update

The most vital components of your estate plan—your will, your powers of attorney, your health directive and your life insurance coverage—need to be reviewed every few years, or whenever you have a major life change.

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