Creating a will and other elements of a strong estate plan are critical when preparing for the future. Having an effective plan in place gives people peace of mind, allowing them to relax and enjoy the remainder of their lives. However, planning for one’s death can be uncomfortable for some, causing them to put off this important task.
Another thing that can be off-putting for British Columbia residents is the massive amount of unfamiliar terminology associated with making a will. Many are afraid they will make a terrible mistake simply because they did not grasp the correct meaning of one or more terms. A lawyer can help, of course, provided you are not afraid to ask questions about even the most seemingly simple term. Another way you can feel better about the process is learning some of the associated terminology on your own. Below are brief definitions of some of the most commonly-used estate planning terms.
— Assets: Any money, property, personal possessions, investments or land you own.
— Beneficiaries: The people you name in your will or trust to receive shares of your assets.
— Power of attorney: An important legal document in which you appoint a trusted individual to make legal and financial decisions for you.
— Will: The document containing instructions regarding your assets and obligations upon your death.
— Estate: The entire sum of the property you own individually including homes, personal belongings and other items.
— Residue: Whatever assets are left after an executor pays your debts and distributes specific items.
— Executor: The person you choose to manage your affairs and complete any instructions contained in your will after you die.
This addresses only a few of the terms you will hear during estate planning. As mentioned before, the lawyer you choose will be more than willing to answer questions about other confusing terms.
Source: People’s Law School, “Writing Your Will,” accessed May 27, 2016