Protecting your Family
This website is all about managing your finances more effectively and building your wealth. But nothing is more valuable than your family.
That's why an important part of your financial plan is to make sure it includes protection against the unexpected. This can include life insurance, home and auto insurance as well as Wills and Powers of Attorney for you and your spouse.
Insurance provides financial protection
Insurance allows you to protect your property and your family from the financial consequences of unexpected events. The following are some of the main types of insurance that should be a part of your “just in case” plan.
Property insurance protects your home from fire or other damage, and replaces stolen, lost or damaged possessions. It also provides liability coverage in case a visitor to your home is injured. If you own your home, you are required by law to purchase either Homeowners Insurance or Condo Unit Owners Insurance. If you rent your home, you can purchase Renters Insurance to protect your personal possessions.
Auto insurance is required by law if a motor vehicle that you own or lease is to be operated. It provides financial protection against specified losses relating to the operation and ownership of your vehicle. Depending on the type of auto insurance you purchase, it may cover damage to the car, medical costs if someone is injured, lost wages and legal costs.
Personal accident insurance provides an alternative source of income in case you have a serious accident and are unable to work.
Life insurance provides a tax-free, lump-sum amount (that can support your family) in the event of your death, give a legacy to grown children or pay the taxes that can arise at the time of death. Depending on the type of life insurance you choose, it may also provide a savings and investment vehicle.
A Will sets out your legacy
Your Will is an important legal document that leaves instructions about how your possessions and assets ("your estate") should be managed in the event of your death. It also makes arrangements for your children in the event that both you and your spouse pass away.
If you die without a Will in Canada, the provincial courts become responsible for distributing your estate. This can be a lengthy process, and it may not provide the most cost-efficient way to handle your assets.
While it's possible to write your Will with forms that are available online or at many stationery stores, it's a good idea to work with a lawyer instead. A lawyer can help you write a Will that's clear and can be enforced, so that you can be confident that your assets will be divided the way you want them to be. You may also want to consult a tax or financial advisor.
It's important to review your Will regularly (preferably once a year) and any time your life changes significantly — for example, if you have a child or get married. Regular reviews will help ensure that your Will accurately reflects your current situation and intentions.
Why you also need a Power of Attorney
A continuing Power of Attorney (known in Quebec as a mandate in case of incapacity) enables you to make an advance appointment of someone you trust to manage your property and make financial decisions for you if you become unable to do so — for example, if you become seriously ill . Without this document, your family might have to apply to the Courts before any decisions could be made regarding your property.
You can also have a Power of Attorney for personal care, which appoints someone to make decisions on your behalf regarding your personal and health care.
A Power of Attorney is a powerful document best made with the advice of a lawyer. In addition, the laws regarding Powers of Attorney and the terminology vary from one province to another. With professional advice, you can feel confident that your documentation accurately reflects your wishes and will be able to achieve your goals.
 Learn more about Estate Planning
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