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Do you have a will? You should - especially if you have kids

Sleeping baby.

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Recently I was recounting to a successful Bay Street financial professional the story of a young family who had procrastinated with setting up their wills, powers of attorney, and life insurance. Their oldest child was seven and they knew they had to get their butts in gear.

I was surprised to learn that the person I was telling the story to admitted that he too was guilty of procrastinating with his family's estate plan. It was the recent planning of a big family trip overseas that motivated him to act. But once the seed was planted, his sense of urgency escalated quickly.

Most people use the milestone of the birth of their first child as the impetus for buying life insurance and setting up their wills. Up until that point, many dual income couples probably subconsciously figure that since they had survived without their partner financially before they started dating, they could manage financially if they died. But a baby changes things. Now there is a true dependent.

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When people visit a lawyer's office to set up their wills, they usually will be prompted to address their powers of attorney at the same time. In other words, if something bad happens to you but you don't die, who will make decisions for you if you are incapacitated? You can assign financial decisions and medical decisions to different people. On the low end, a simple estate's will and powers of attorney might cost $400. Venture to a downtown lawyer with a more complex estate and it could run into the thousands.

If you die without a will, the courts will appoint someone to administer your estate. This may or may not be done according to what you would have preferred. If you're single with no dependents and have a simple estate, it's probably not the end of the world. But once you have a major life event such as having a baby, or getting re-married, it moves up the list in terms of your priorities really fast.

If you don't have your wills, powers of attorney and life insurance in order, or up to date, book a meeting with a lawyer, insurance agent, or a financial planner to get the ball rolling. If you know you've been procrastinating with these to-do items, consider this the seed being planted into your head.

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About the Author
Personal Finance columnist

Preet Banerjee is a consultant to the financial services industry. You can follow him on twitter at  @PreetBanerjee. You can find his conflict of interest disclosure on his website. More

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