Adding a new member to your family is a wonderful and exciting time. It is one of the largest milestones in your life. There are so many things to think about when growing your family it can be overwhelming. Here is a helpful little checklist of some of the things people often overlook.
| NEW FAMILY CHECKLIST |
|---|
| ▢ Wills |
| ▢ Registered Eduacation Savings Plan (RESP) |
| ▢ Power of Attorney Documents |
| ▢ Life Insurance |
| ▢ Name Your Trustee(s) |
| ▢ Juvenile Insurance |
| ▢ Benefits |
Wills
A will is a legal document that details how you want your estate (your stuff) to be divided and distributed after your death. Your estate includes your assets (what you own) and your liabilities (what you owe). Your will should also name your executor/executrix or estate trustee; this is the person that will carry out your wishes and it gives them the right to manage your estate including your funeral expenses/wishes. If you have dependent children it is a good idea to name a guardian in case both you and your spouse or partner die at the same time. Keeping an up-to-date will is highly recommended. You are not legally required to prepare a will. If you do not have a will, the laws in your province or territory will determine how your estate is divided. If you have a complex estate it is a good idea to get professional legal help when you make a will. This helps you make sure all your documents are properly prepared and witnessed. If you have a more straightforward and simple estate there are more quick, inexpensive and easy online options to help you create your will.
Registered Education Savings Plan (RESP)
RESPs are tax-sheltered investments that can help you save for your children’s post secondary education. It is wise to invest in RESPs as well to take advantage of the free money the government provides in the form of a Canadian Education Savings Grant (CESG) where they will match a percentage of your contributions and deposit it directly into the RESP. Speak to your financial advisor about your child’s RESPs.
Power of Attorney Documents
Every adult should create power of attorney documents sooner rather than later in life. It is something you hope will never have to come into effect, but it will help protect you if you were to become incapacitated. A power of attorney (POA) is a legal document that gives someone you trust the authority to make decisions on your behalf about your property, finances, personal life and medical care if you were to become unable to yourself.
Life Insurance
Life insurance is one of the building blocks in financial planning. It can help you protect and preserve the wealth you have earned. The death benefit provides a tax-free lump sum of money to your beneficiaries and depending on the type of insurance, your life insurance policy can also act as an investment tool to provide you a return after a certain time period. If a parent were to pass away, life insurance gives the surviving parent the ability to care for their children without having to worry about making ends meet.
Name Your Trustee(s)
As part of estate planning people are encouraged to include one or more trusts to ensure that if they die prematurely, their assets are set aside to pay for their children’s health and education. A “minor trust” puts the assets in a trustee’s care and it is the trustee’s sole discretion to distribute the assets for the child’s health, education, maintenance and support until the child reaches a specified age (eg. 25 or 30 years old). Careful consideration should be given to whom you choose for this important role and it should be re-visited periodically as family and financial circumstances change.
Juvenile Insurance
Purchasing a life insurance policy and/or critical illness insurance for your child or children can provide funds in the unfortunate circumstance of their death or severe illness. Some of the benefits of buying juvenile life insurance are locking in and guaranteeing future insurability and lower rates/premiums.
Speak to your insurance advisor to determine if these products are appropriate for you and your child/children.
Benefits
You should know what benefits you have through your workplace plan as well as your individual plans. Knowing what you have in terms of disability, health and dental, travel, accident and sickness, critical illness and life insurance will allow you to see what your may need or not need to protect your finances if you were to get sick or injured or die. Your insurance advisor can help you go over and understand your existing benefits and make sure you have suitable coverage for your needs.
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