5 Estate Planning Strategies Your Executor Will Thank You For

Take a good look around you – your home, your assets, your belongings.  As much as we don’t like to think about it, we’re not going to live forever.  At some point in the future someone is going to have to deal with all our stuff.

Could your loved ones figure out your finances?  Would they know how to distribute your possessions?

The more you can do to prepare your executor ahead of time, the better.

Related:  You’ve Been Asked to be an Executor – Now What

I have been an executor three times now. Twice the process was fairly easy and straightforward. The wills were clear as to intentions and documents were easy to find. The other one – well let’s just say if I never have to deal with that kind of administration hell again, not to mention the disgruntled beneficiaries, it will be too soon.

Attempting to carry out someone’s wishes when they have passed away can be difficult when they are anything but clear. That’s why I have decided on the following steps to make things easier for those who must someday do the same for me.

1.  Have an estate plan

Many people think if they have a will (you do have one, don’t you?), their estate plan is complete, but there is more to it than that.

A good plan should be designed is such a way to:

  • Avoid the costs of probate. Many types of property, or forms of ownership, do not go through probate, e.g. jointly owned property, life insurance proceeds, assets with named beneficiaries, trusts.
  • Minimize estate taxes.
  • Make the will very clear with a detailed distribution strategy.

Related:  How to Minimize Probate Fees

2.  Prepay funeral expenses

It sounds a bit morbid to plan your own funeral, but it’s a kind thing to do for your next of kin. It doesn’t seem that common any more to pre-pay funerals but one reason to pre-pay for a burial plot or urn storage and the service now is that – if long years pass – there might not be enough money for a funeral, which leaves heirs in the position of having to pay for it themselves.

Since I’m a no-nonsense frugal type of person, I can make price comparisons and shop wisely – and, yes, cheap out. Heirs may not be emotionally ready or have the time to do this. Plus, I don’t want them to be upsold into paying for a more lavish send-off than I would have wanted.

At the very least, express your preferences in writing.  It will make things much easier and head off any family disputes, which can be brutal.

Before my father-in-law died, he told me he wanted to be cremated. When the arrangements were all but complete, his daughter insisted that he had wanted a full burial. This disagreement caused bad feelings within the family that lasted for many years.

If you want to be an organ donor, put this in writing too.

3.  Consider passing wealth to the next generation during your lifetime

It’s very likely I will spend and enjoy what I have accumulated, but once I have a clearer idea of how this retirement thing will pan out, I would like to assist my grandchildren financially in some way.

I could possibly assist with education costs or help them buy their first home. Or, maybe smaller gifts such as a trip, or start them on the road to investing.

I would like to be able to see them enjoy it. I don’t want it to be too late to be of any real use to them once I’m gone.

Why make your favourite charities wait to receive the support you’d like to give them?  Consider making your charitable gifts while you’re still alive – and save on tax at the same time.

4.  Downsize your possessions

I have heard of people who hid items of value such as cash or jewelry and forgot where they were hidden. Even if they are not hidden, sorting through a lifetime’s worth of possessions is a huge burden on heirs.

Some heirs simply use an estate sale service and let them deal with it. The risk here is that valuable items might get sold for less than they are worth, or keepsakes thrown away with old paperwork and household items.

It would be a wonderful idea to gift any items of high value such as jewelry to family members while you are still alive.

I plan to keep my belongings pared-down and organized as much as possible.

5.  Make all pertinent information easy to find

It’s a good idea to have a letter of guidance or wishes attached to the will to help your executor gather the information needed to fulfill his or her role in the best and most efficient way.  After all, you won’t be around to ask.

A typical executor spends a lot of time searching. I’m pretty organized.  I have a binder and a file cabinet drawer that holds all pertinent account information together with who to contact. 

It contains:

  • Where I do my day-to-day banking.
  • Documents and information about my home.
  • Types of assets I have and where they are held.
  • Who the beneficiaries are of life insurance policies, RRSPs, TFSAs. (Make sure to keep these up to date.)
  • The addresses of my beneficiaries.

No private or personal information needs to be revealed if you don’t want to let your executor know these details too far ahead of time.   You don’t need account numbers or bank balances, but you do need to advise where these are held.

Other things to consider putting in your letter of direction are:

  • Where your safety deposit box is held.  Give a brief description of what it contains and where the keys are kept.
  • Where the keys and codes are to home alarm systems, mailboxes, gates, locked boxes, drawers, and cabinets.
  • Who gets items with sentimental value that may not be specifically included in the will?  Write out a list.  Family fights erupt over the smallest things.
  • Think about your social media sites, online accounts and download destinations such as Amazon and Netflix.  Make a list including how to access them and find a safe place to store it.
The bottom line

You are handing your executor a lot of work. Wrapping up an estate is a time-consuming process that requires a lot of attention to detail. The best present you can give your executor is a set of documents that reflects your wishes.

Plan in advance by keeping your records organized and up to date and making sure the appropriate people know how to find and access them.

Remember – the key is to make life easy for your survivors.

You family will thank you for it.

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