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Keep your will current and don't forget powers of attorney

Nobody likes to make plans for an untimely death, particularly for it striking tragically at a young or middle age.

But taking the time to put together a proper will is an essential part of sound financial planning, as well as being considerate to your loved ones, says Sara Plant, vice-president of wealth services at BMO Harris Private Banking.

"You want to make sure you are not leaving your family members in a mess," she says. "People need to think of their children and all of the beneficiaries in their family that would have to deal with their money and their property if something were to happen to them."

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Not having a will can trigger higher costs, avoidable delays and even potential squabbling among family members as to who gets which parts of the estate. If people have small children, it is essential for them to have an updated estate plan that chooses a guardian for them, as well as instructions on how and when they want their inheritance passed along.

Ms. Plant also provided these estate planning tips:

1 Have a will prepared. Even if you think you only have debt to give away, having a will makes it far easier for your loved ones to deal with your estate.

2 Keep your will current. Life has a way of turning corners every seven to 10 years - the things you own change, the people in your life change and your goals change. To be effective, your will needs to reflect your current circumstances.

3 Have powers of attorney in place. In some ways, these documents may be more important than wills as you are relying on others to make decisions for you while you are still alive.

4 Make sure you have guardians appointed for your children. They are needed right up until your child reaches age of majority. Appointing guardians in your will gives you some control over the outcome if the guardian is ever needed.

5 If you move, make sure you have new wills and powers of attorney prepared that apply in your new location.

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6 Talk to your family members about your "contingency plans" to deter disputes and misunderstandings that can happen when you are no longer here.

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About the Author
Personal Finance Web Editor

Roma Luciw is the Globe and Mail’s personal finance editor. She has worked at the Globe as a business journalist since 2001, covering stock markets, breaking news, and most recently anything that helps regular Canadians manage their own money. More

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