Estate Planning Mistakes to Avoid in Alberta
When it comes to estate planning, many people in Alberta overlook important steps that can lead to unnecessary complications after they pass away. An effective estate plan should not only reflect your wishes but also ensure that your assets are distributed smoothly, and that your family is protected. Unfortunately, there are several common mistakes people make during the estate planning process that can lead to delays, confusion, and additional costs.
In this blog, we’ll walk you through the most common estate planning mistakes in Alberta and explain how to avoid them. With the right guidance, you can create an estate plan that ensures your wishes are fulfilled and your loved ones are taken care of.
1. Not Having a Will or an Outdated Will
A will is the cornerstone of any estate plan. Yet, many people either neglect to write one or fail to update it as their lives change. If you pass away without a valid will, Alberta's default laws will determine how your estate is distributed—often in ways that don’t reflect your intentions.
Even if you already have a will, it’s important to review and update it regularly. Major life events, such as marriage, the birth of children, or the sale of property, can all affect how your estate should be divided. Failing to update your will after such events could result in your assets being distributed in a way you didn’t intend.
How to avoid this mistake: Schedule regular reviews of your will with a trusted legal professional. Book a wills & estates consult with our team to ensure your will reflects your current wishes.
2. Failing to Plan for Digital Assets
In today’s digital age, your online accounts and digital assets can have significant value—both monetary and sentimental. From social media profiles to cryptocurrency and online banking accounts, these assets require special attention when planning your estate.
Many people overlook their digital assets, leaving executors in the dark about how to access them. This oversight can result in a lengthy process of recovering accounts, missing financial information, or even lost personal memories.
How to avoid this mistake: Include your digital assets in your estate plan. Create a list of your online accounts, passwords, and digital investments, and provide clear instructions for your executor. You can learn more about this in our guide on Digital Assets in Alberta: Do They Belong in Your Will?.
3. Choosing the Wrong Executor
The role of executor is crucial. They will be responsible for ensuring your will is followed, paying any debts, and distributing your assets. Choosing the wrong person for thisrole can lead to delays, disputes, and even legal challenges.
Many people opt for a family member or close friend as their executor, but it’s important to consider whether they have the necessary skills to handle financial and legal matters. Additionally, choosing someone who is emotionally involved in your estate can lead to conflicts.
How to avoid this mistake: Choose an executor who is organized, trustworthy, and capable of handling the responsibilities of estate administration. If you’re unsure who to appoint, a lawyer can help you make the right choice. To learn more about what an executor does, check out our article on Estate Administration: Executor Duties in Alberta.
4. Not Addressing Estate Taxes and Probate Fees
Many people underestimate the tax implications of their estate or the costs associated with the probate process. While Alberta does not impose an estate tax, your estate may still face probate fees, which are calculated based on the value of the estate. These fees can add up, especially if you have significant assets.
Additionally, your beneficiaries may be required to pay taxes on certain assets, such as capital gains from property or investments. Failing to plan for these expenses can reduce the amount your loved ones receive.
How to avoid this mistake: Work with an experienced estate planning lawyer to understand the tax and probate implications of your estate. You can also consider strategies to minimize these costs, such as joint ownership of property or naming beneficiaries directly on financial accounts. For more details on probate, read our article on Probate Fees in Alberta: What to Expect.
5. Not Including an Enduring Power of Attorney and Personal Directive
Estate planning is about more than just what happens when you pass away—it’s also about what happens if you become incapacitated. An Enduring Power of Attorney (EPOA) allows someone you trust to manage your financial affairs if you are unable to do so. A Personal Directive, also known as a living will, enables someone to make personal and medical decisions on your behalf if you are incapacitated.
Without these documents, your family may need to go to court to appoint a guardian or trustee, which can be time-consuming and costly.
How to avoid this mistake: Ensure you have both an Enduring Power of Attorney and a Personal Directive in place. Book a wills & estates consult to make sure all aspects of your estate plan are covered, including your health care and financial decisions in case of incapacity.
6. Failing to Plan for Minor Children
If you have minor children, your estate plan should include provisions for their care. Without a will, the courts will decide who will be responsible for your children, which might not align with your wishes. It’s essential to name a guardian for your children in your will and ensure they are financially supported.
How to avoid this mistake: Appoint a guardian for your minor children and set up a trust to provide for their financial needs. This ensures your children will be cared for according to your wishes.
7. Not Communicating Your Estate Plan
One of the most important parts of estate planning is ensuring your loved ones are aware of your plans. While a will is a private document, keeping your family and executor informed about your intentions can help prevent confusion and disputes after your death. This is especially true if you have a complex estate or specific wishes regarding your assets.
How to avoid this mistake: Have an open discussion with your family and executor about your estate plan. Make sure they know where your will is stored and how to contact your lawyer if needed.
Final Thoughts
Estate planning is an essential part of ensuring that your wishes are carried out and that your loved ones are protected. By avoiding these common mistakes, you can create a comprehensive estate plan that will minimize complications and provide peace of mind.
If you haven’t yet created or updated your estate plan, it’s time to act. At Libra Law, our experienced Wills & Estates team is here to guide you through every step of the process. Book a wills & estates consult today to get started.
Disclaimer:
This article is for general informational purposes only and does not constitute legal advice. To obtain advice specific to your situation, please consult a lawyer or qualified professional.
