How to Plan for Your Liabilities
There is no denying that Canadian families now more than ever are accumulating debt. Nearly one third of Canadians have said that they are finding it harder than before to pay down their debts with the current state of the economy and rising inflation rates. While we are quick to discuss our assets when it comes to our estate planning, it’s crucial that we also plan for our liabilities. Your future executor will be unable to administer your estate before paying off your debts and liabilities, and if they don’t know where to begin it can cause both lengthy and costly delays. Let’s look further into a few ways that you can properly plan for your debts.
1. Create a list
Start by creating a list of your liabilities with account numbers, the current balance, and how you pay them down (automatic withdrawal, online payment, etc...) By doing this, you are ensuring nothing is being forgotten, and it compiles all your debts in one easy-to-navigate location for your Executor when the time comes. Read it over once, twice, or even a third time to ensure you haven’t missed any!
2. Have the conversation with your Executor
As much as people dread these types of conversations, they need to be had. They won’t be able to properly administer your estate and handle your liabilities if they don’t know what debts you hold. While you don’t need to get into specifics, you can inform them as to where to locate the list and all the information they will need when the time comes. Again, your Executor cannot administer your estate before paying off your debts and liabilities!
3. Keep your list updated and organized
As things change over time, ensure you keep your list up to date. Have you paid any off or acquired any more loans that you need to include?
One of the most common struggles executors face when it comes time to act is not being aware of the deceased liabilities, and this often causes lengthy delays with the estate's administration. Picture yourself in the role of executor – you want to wrap up the estate and get the beneficiaries their share of the money, but you can’t nail down the one debt payment that’s coming out of the bank account because you don’t have any information to track it down. It’s a frustrating situation that can be easily avoided with a little bit of planning and preparation.
Do you have questions about the role of the Executor? Another great tool when it comes to your estate planning is our new online course called Executor Ready! Executor Ready does just that – gets your Executor ready for the role through ten easy to digest video modules led by our CEO and Founder Debbie Stanley. Click the link to learn more and to get your Executor Ready today!
This blog is not intended to be legal advice and should not be relied on as such. If you require legal advice, please contact a legal professional concerning your particular circumstances.