Whenever our team begins serving a new client, one of the first questions we ask is if they have an up-to-date will. While most people we work with do have a will, you would be surprised how many people do not, so if you are one among them you are not alone.
There are also many people who have wills that haven’t been updated in some time, or that do not take into account the complexities of the dynamics of their families and/or the assets they have accumulated over time. Contemplating death and the ramifications and realities of one’s passing is extremely difficult for many people. But rest assured, once you commit to creating a will for yourself and your family, every step forward takes you closer to completion, and soon enough you find that it’s not as difficult as you had imagined.
And once you have a will in place, keeping it updated every 3-5 years becomes easier and easier. Soon, knowing that your will is done may well become a comfort in your life.
Here are some thoughts about wills to help you get your estate planning process underway.
1. No will? No way!
- When someone dies without a valid will in Canada, it is called intestacy. Each province and territory has laws that govern how the estate is distributed, which may or may not be aligned with your wishes.
- To state the obvious, without a will, your estate is vulnerable to disputes and legal delays.
- Take the time to create a clear will that outlines your wishes, especially if you have a complex family situation.
2. Backup plans are a must
- Wills should have provisions for what happens if a primary executor cannot accept the appointment or passes away first.
- Alternate executors help to ensure your estate is administered in accordance with your wishes.
3. Think about working with an estate planning professional
- Do-it-yourself wills can lead to errors, such as incorrect tax handling or unclear instructions for asset distribution.
- Work with an estate planning professional to ensure your will is legally sound and tailored to your needs.
4. Select an appropriate executor
- Choose someone who has the right skill sets and who will be available to do the work necessary to administer your estate.
- Your executor should be reliable, ideally live in Canada, reside close to you, and have the capacity to handle the responsibility. They also should know they are named in your will.
5. Update your will when necessary
- Life events such as marriage, divorce, the birth of a child or the death of a beneficiary often require changes to your estate plan.
- Regularly revisit your will to ensure it aligns with your current circumstances and relationships. Every 3-5 years is recommended or following a life event like marriage or divorce.
6. Don’t overlook sentimental possessions
- Family disagreements often arise over personal items with emotional connections, like mom’s favourite tea set.
- Create a clear inventory of sentimental belongings and designate who should receive each one.
7. Put thought into shared properties
- Properties like cottages can lead to disputes if one heir wants to keep it while others do not.
- Discuss these assets with your family and clearly outline inheritance terms in your will. Provide this list to your estate planning professional.
8. Don’t ignore tax responsibilities
- Unaddressed taxes on investments or capital gains can force heirs to sell assets to cover costs. Designation of registered plans should be considered in your estate.
- Consult with advisors to estimate tax liabilities and explore options like life insurance to cover these expenses.
9. Don’t include unrealistic requirements
- Setting impractical conditions for inheritance, such as lifestyle restrictions, can cause legal issues and costly litigation.
- Try to avoid terms that are difficult to enforce and focus on realistic, clear directives.
Careful planning and collaboration with estate professionals can help you avoid these common mistakes, ensuring your will effectively supports your loved ones and secures your legacy.
