Originally published in the September 2007 issue of Canadian Living Magazine, on newsstands or click here to purchase online.

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1. Will
A will lists basic details about how you'd like your assets to be divided. It should name an executor (the person who carries out your wishes), and a guardian if your kids are under the age of majority. There are three types of wills: formal, which is accepted in all provinces and usually drafted by a lawyer; holograph, which is handwritten and not accepted in all provinces; and notarial, which is valid in Quebec only and completed by a notary. Spouses should have separate wills.

TIP: A formal will can be drafted with a do-it-yourself kit, but make sure it suits your situation and is valid in your province. A trip to the local library will help you get started. Look for books written specifically for Canadians that offer step-by-step instructions and examples on how to customize your will.

Why you need one: Without a will, your assets will be sold and the proceeds divvied up according to provincial laws, and your estate can't be distributed until the court appoints an administrator (which means you've missed the chance to pass on special gifts to specific people). There will also likely be frustrating delays, extra paperwork and other costs and inconveniences, such as court appearances and legal fees.

What you may not know: Even if you have a will, you can't just distribute your finances as you wish. If your hubby died and forgot you and the kids in his will, family law courts in British Columbia and Ontario could step in and change his will to meet support obligations.

Many signed contracts, such as pensions and insurance policies, aren't included in your estate if you've already listed a beneficiary. These items could bypass your will altogether.

Joint property, such as the family home, usually goes to the surviving owner.

Ka-ching!: Costs vary from $400 for a basic will and powers of attorney (see below). If complex, a lawyer will charge by the hour, between $200 and $600, although the average cost is about $400. Do-it-yourself kits range from $10 to $150. If you're uncomfortable you may want to go to the pros.

The talk: You may want to divulge the details of your will to your immediate family in advance. Write down key points you want to go over, set a time and explain the subject of the meeting. Follow up to ensure everyone understands your wishes.

When to update: Every few years or earlier if your financial situation changes; the names of beneficiaries, executors or guardians change; or after any major life events, such as a birth or divorce.

2. Estate Plan
An estate plan is the umbrella under which every aspect of your estate falls -- will, powers of attorney, finances, insurance and taxes. “It can include personal-care preferences while you're alive, terminal-care wishes, organ donations and funeral arrangements,” says Marty Kobayashi, a financial adviser in Toronto. “It helps preserve money for your heirs by minimizing taxes and designates people to carry out various duties.”

Why you need one: “A good reason to plan with family, not in secret, is to avoid the horrific family-busting process that goes on when siblings are fighting over an estate,” says Peter Mogan, a corporate lawyer in British Columbia and author of Family Trusts for Estate and Tax Planning (Self-Counsel, 1996).

Ka-ching!: Estate-planning specialists (lawyers and financial planners) charge a flat rate or hourly fee from $150 to $600 (a small price to pay if they end up saving your heirs countless headaches and a whopping tax bill). Some lawyers include a simple estate plan with the price of a will (about $400). Banks, insurance companies and investment dealers will often coordinate your plan for free -- if you buy insurance or other products from them that pay commissions.
The talk: “It's better to have frank discussions with your family about your wishes before anything happens to you rather than leave decisions to others in a time of crisis,” says Ian Shulman, a clinical psychologist in Oakville, Ont.

When to update: If you're making any revisions to your will, powers of attorney and insurance policies, update your estate plan, too. Otherwise, check every few years to be sure the details reflect your current situation and wishes.

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