They say that you can’t take your money with you when you go, but that doesn’t mean you don’t need your money after you pass on. Many people save their entire working lives in order to have a financial stable retirement, but what about afterwards? Unfortunately, not many people plan for their final estate expenses and this is a big financial mistake.
Why it’s important to plan your estate
As a financial planner I always advise clients to consider their final estate expenses when planning their retirement because the financial planning process doesn’t end at retirement. After we pass on our family is left behind to pick up the financial pieces. Many people don’t plan for their estate because they are not concerned with what happens after they are gone, but before you spend all of your savings – think about your family.
The average Canadian funeral costs approximately $10,000; does your family have that money available to spend?
How you can avoid the financial burden
Estate planning is not complicated; it is just like saving for any other personal goal. There are several ways that you can personally cover the costs of your final estate expenses: you can purchase an insurance policy to cover the costs of your final expenses, you can start saving at a younger age and save a little bit of money over time or you can prepay your funeral expenses to alleviate the financial burden from being passed on to your family.
Before you start saving for your final estate expenses you have to calculate approximately how much they will be. Your final expenses include the cost of your funeral, but they also include your final personal tax filing, your estate tax filing and the cost to repay any of your outstanding debts upon death.
You can also take some of the financial burden away from your family by always having life insurance on your credit products. This ensures that your debts will be paid upon your passing.
When family members don’t have to worry about getting into debt over your final expenses and paying your final estate taxes they can take the necessary time they need to mourn their loss.
Talk to your financial planner today and start planning your estate.
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Photo by SuzieT