Let’s start with the basics: What is estate planning? Simply put, estate planning is the process of deciding how your assets will be distributed after your death.

While the word “estate” may sound grand and not for someone who has a modest amount of money in the bank and a small family home, it in common parlance, refers to any assets, including bank accounts, property, investments, and personal possessions, regardless of the value, and quantity. If you want to be in control of where your stuff goes after your death, then an estate plan, with its various components, is a good idea.

When should estate planning start?

Since estate planning is the distribution of assets after your death, it is a good idea to begin estate planning as soon as you have any assets that would need distributing. If you have a bank account, any investments, a TFSA or even basic items like a car or a coin collection, you should consider estate planning to ensure these items end up where you them to be after you are gone. Some people also start to think about estate planning when they have a major life event such as getting married, having a child, or purchasing a home.

What are the key components of an estate plan?

There are many tools you can access when it comes to estate planning. Two of the most common are:

• A Last Will and Testament – A will ensures that distribution of your assets is carried out according to your wishes
• A Life Insurance Policy – A life insurance policy ensures that after you are gone, your loved ones are provided for financially

Depending on where you are in life, the death benefit from a life insurance policy can provide money to fund, for example, post-secondary education for your children, or help ensure a comfortable retirement for your surviving spouse.

What happens if you don’t have an estate plan?

Without the components of an estate plan in place, where your asset go will be decided by the courts. Who gets what will be determined by a series of laws specific to where you live rather than according to your wishes. These laws may prioritize people who meet “legal” criteria such as a spouse or a child, without considering the specific relationship you had with that person.

Estate planning is about putting you in control. With a thoughtful estate plan, which can include things like a will and life insurance, you can help ensure that your hard-earned assets end up where you want them to be and not where a court decides they should be.

A life insurance advisor (among others) can help direct you to the professionals who can put together an estate plan that meets your specific wishes.