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The 10 Essential Documents You Should Have. Part Two. Estate Plan, Letter of Instruction.

The 10 Essential Documents:

Now, let’s talk about money! The next things are quite important regarding your assets.

Estate Plan / Letter of Instruction

This is how your assets will be MANAGED and DISTRIBUTED. Not necessarily who will get it (which is the Will). You could also decide to create a trust within this. A basic Will is cheap at $700 or so, but a Will with a Trust from an Estate Plan (as I understood it), can get pricey from $2000 – $4000 depending on how complex you want to make it.

The Estate Plan is the legal document, the Letter of Instruction is an extra layer to it I guess. Honestly, my notary was confused when I mentioned both, but the gist of it, is that it is included in the Estate Plan, when written correctly.

Even if you do not think you have assets – you do. If you have money in a bank account over $40,0000 or any assets totalling above that amount (that is the threshold in Canada before the government gets involved), you are considered to have assets.

I know it sounds like a will but it isn’t because as it was explained to me, this Estate Plan can have things like a trust in place.

For instance, Little Bun is a minor. If I passed today, he would inherit everything of mine without a Will or Estate Plan. The assets would go into the guardianship of my partner, and when he turns 18 he gets full control of it.

Now the annoying part is… for my partner to be able to release the assets for whatever reason, he would have to go to the courts each time to obtain a dispensation to do so. EACH TIME. Just because I did not have a Will or Estate Plan created, and that’s kind of annoying.

But I digress.

Consider a Trust

You could plan for asset distribution in a Trust as well. A Trust is basically like a corporation. It acts independently in the interests that you have dictated out in the Trust. For instance, protects your assets from creditors:

In a trust, the use of the property is separated from legal ownership. Effectively, you are allowed to transfer beneficiary ownership of your property, to your family members without giving them control over those assets. (Source)

I do not yet know quite enough to talk about this, but a trust allows you to transfer assets while you are still alive, without the probate costs. The trust also kicks into place only upon your death, and obviously there are costs associated with the trust to be able to manage your wishes in the trust.

In the trust, I could say that Little Bun only gets the income from my estate and not be able to touch the capital until he turns 50. Or it can say that it is distributed out evenly at each decade (20, 30, 40, 60) until it is completely gone.

Or it could say that he gets it all at 40. Whatever it is, it is what you decide it to be, the Trust and the Estate Plan follows the guidelines of what you have laid out.

You can’t really predict the future. Maybe your children will take the money and end up spending everything at 18, or maybe they will not. Whatever it is, it is based on what you know of your children and your best intentions for them when you are gone, for the assets you have. Especially if it is significant amounts, such as $750K or higher.

What does it cost?


Estate Plan includes Letter of Instruction (basic one) but not a Trust.

Trust would be another separate animal. TBD on costs.

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