Many people think of a will as a document that gives your assets away when you die. But a will is more about the people involved than about the assets themselves.
Thinking about what happens to our loved ones after we’re gone is difficult, and having a will in place can provide you and your loved ones with relief, confidence and financial protection. Perhaps the best part of having a will is peace of mind. I know from my experience helping families with their estate planning, the relief that people experience when they complete their will. It feels great to check it off your to-do list!
Another benefit is the confidence you’ll feel knowing that your loved ones are not going to be left with an administrative and legal mess to manage while they grieve your passing. Your loved ones will know that you did the best you could to make it easier for them.
Your will, by its very name, is a binding expression of your intentions for the future of your loved ones. The ability to ensure their protection and leave a lasting legacy is the essence of a will.
What happens if you die without a will?
If you pass away without a will, the law directs what happens to your assets. Your assets do not become government property, instead provincial laws govern how they are distributed to your closest relatives, such as your married spouse and your biological children. There are strict rules around this process, some of which can lead to problems.
Here are just a few examples:
- Rules around spousal inheritance vary by province. In Ontario, common law spouses do not inherit anything, but legally married spouses do.
- Children over 18 get their entire inheritance immediately. It’s important to think about how an 18-year-old may handle their inheritance.
- Inheritances for children are held by the Court until they turn 18. Accessing money for them can be difficult. The Court, with help from the government, decides how much they can receive.
- All assets must be sold. There is no flexibility to leave specific assets (like a cottage or heirloom) to particular people.
- People you might not want to receive assets could still get them. For example, if siblings are your closest relatives, they will all receive an equal share.
What about decision makers if you don’t have a will?
- No one has authority to administer your estate. Someone has to apply to the Court to be appointed as the administrator. In many cases, this means no access to any funds and no authority to deal with issues until the Court appoints someone.
- If you have young children, you can’t choose the right person to look after them. The Court decides.
“But I’m not rich…”
You don’t need to be wealthy to need a will. If you own any assets and you have any loved ones, creating a will can provide relief, confidence and protection.
“It’s going to be hard…”
Making a will is easier than ever. Good lawyers make the process easy and efficient, and can make you feel confident that your loved ones are properly protected. Do-it-yourself wills are another option that is gaining popularity. While many of us think our situation is simple, consider getting guidance and advice from professionals who know the ins and outs of wills.
Here are a few situations where professional advice may be important:
- You have young children.
- You have a pension plan.
- You have registered investment accounts (e.g., RRSP, TFSA, LIRA).
- You are in a second marriage/common law relationship.
- You have potential beneficiaries under 25.
- You own assets in another country.
- Your beneficiary has financial management issues or a disability.
- You have a cottage or other secondary property.
- You want to give money to charity.
- You have a pet.
- You are a U.S. citizen, or you have beneficiaries who are U.S. citizens or residents.
Beyond the will: Beneficiaries and spousal pensions If you have a pension plan, registered investment accounts, or life insurance, you can designate beneficiaries to receive those funds directly. If a beneficiary is named, those assets are handled separately from your will and excluded from probate fees. When preparing your will, it’s important to think about any beneficiaries you have in place, and to avoid inadvertently cancelling or changing those designations through your will. If you are a HOOPP member, survivor benefits are a valuable feature of your pension. Your spouse, if you have one, has priority to receive any survivor benefits. The pension rules about who qualifies as a spouse are different from estate law and can override your will or your beneficiary designation. Understanding these differences and seeking professional advice about your personal situation can help you make informed decisions.
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Final thoughts
Putting a will in place takes a little time, and maybe even a bit of courage. But when it’s done, you’ll feel not only relief and confidence, but pride in knowing that you’ve taken a meaningful step to protect the people who matter most.
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