More than half of adult Canadians (56%) do not have a signed will.1 If you fall into this category, you should understand the importance of getting this task checked off your to-do list. While it may involve difficult conversations about your end-of-life plans, planning your estate and writing a will doesn’t have to be as daunting as it seems.
This article will explore what considerations you need to take, why these steps are so important, and how to get started today.
Why Estate Planning Is So Important
Estate planning is an all-encompassing term for what will happen to your belongings and assets once you die or if you become incapacitated. This includes many things, depending on how many assets, businesses, or properties you have. Estate planning involves writing a will, selecting a power of attorney, assigning trusts if applicable, choosing a trustee or executor for your will, buying life insurance, naming a guardian for your children, and can even include funeral arrangements.
Planning your estate will ensure that your belongings and assets are assigned in the way you wish when you pass. It will also help transfer your assets in a timely and tax-efficient manner.
Three main reasons to plan your estate are:
- You can choose who you wish to leave what to – if you don’t leave a will, the courts get to decide who gets what. This includes child custody should both parents die.
- By making these decisions, it makes things easier on your loved ones – this can help avoid arguments, costly legal appointments, and additional stress on your family members. It will also help to speed up the time it takes for your loved ones to receive your assets.
- This gives you a chance to implement tax-savings strategies – if you plan ahead and meet with professionals to write your will and plan your estate, they can help you and your loved ones avoid certain taxes through trusts, life insurance, and other avenues.
What Is A Will?
A will is a written document that allows a person to make decisions on how their property will be managed and distributed after death. Writing a will ensures that your final wishes are carried out.
How To Write A Valid Will
For a will to be valid in Canada, it must:
- Be written by a legal adult who is of sound mind
- Be a paper document signed in ink by the author of the will
- Be witnessed and signed by two people who will not benefit from the will writer’s estate
There are three main ways to write a legal will, all with their own list of pros and cons.
A Holograph
A holograph is a homemade will that you write yourself by hand. You do not need witnesses’ signatures in this case because the will is in your own handwriting. This route is free, but unless you know exactly what you are doing and what language to use, this type of will is likely to cause massive problems for your heirs when the time comes.
Do-It-Yourself Will Kits/Online Will Services
This is a popular choice for many, as it is quite low-cost. These options use fill-in-the-blank templates that allow you to input your assets and distribution. In this case, much of the crucial terminology is included in it already, but you still need a decent understanding of legalese to ensure it’s filled in correctly. It can also be difficult to add any customization to these templates.
There are also websites that can guide you through the process of writing your own will online. For someone with simple assets and limited property, this avenue can work well, as long as you make sure you are using a reputable online business to do so. Once you have completed the will online, you need to print it out, sign it in front of two witnesses, and put it somewhere safe. With this method, it can be easy to go back later and change/update your will.
Hire An Estate Lawyer
This is the most fool-proof method. It can be pricier than the other two options, but it’s not too expensive and worth the peace of mind it brings. Especially in the cases of complex estate planning, or when multiple properties, businesses, or children are involved. An experienced team of estate lawyers, like De Rose Lawyers, can help walk you through all your options and make sure you have considered all the variables. Additionally, they can help you organize your assets in a way that will make transferring them to your loved ones easier and potentially less taxed.
Why It’s Important To Have A Lawyer Draft Your Will
Oftentimes, home-drawn wills seem like a cost and time-effective way to ensure your wishes are written down. But why rush something so important? Sometimes, flimsy home-drawn wills aren’t valid and can lead to years of costly litigation and beneficiary stress. Consulting with a law firm like De Rose Lawyers can minimize potential infighting between family members over the validity of your will. Additionally, a law firm can also answer your most pressing questions too, including:
- What if one of my estate beneficiaries is a minor?
- What if one of my estate beneficiaries receives government benefits like ODSP?
- How can I exclude a family member from my estate?
- What if one of my estate beneficiaries passes away before me?
What Happens If You Die Without A Will In Place
When a person dies without a valid will, Ontario’s Succession Law Reform Act dictates how an estate will be divided up. This process is called Interstate Succession. Ultimately, most people want to distribute their properties differently from how the state would. Writing a will, ensures your possessions, financial or not, are passed down to the individuals and organizations of your choosing. It’s worth noting, Interstate Succession doesn’t allow for any personal assets to be handed to friends, girlfriends, boyfriends, schools, or charitable organizations.
When To Change/Update Your Will
If you already have a will in place, it’s important to review it every couple of years. This is because your life circumstances can change. Things like births, deaths, adoption, marriage, second marriage, divorce, and your financial situation can all affect your will, thus calling for an update. Essentially, the best way to proceed with changes is to contact a law firm like De Rose Lawyers.
What Is A Power Of Attorney?
A Power of Attorney (POA) is a legal document that gives an individual, called an attorney, the ability and right to make decisions on your behalf. This individual should be completely trustworthy while knowing and understanding all your wishes and needs.
There are two types of Power of Attorney in Ontario. The first is a Power of Attorney for Personal Care and the second is a Continuing Power of Attorney for Property.
Power Of Attorney For Personal Care
This gives your attorney authority over your health, security, and hygiene. Not only that but it gives you a chance to state the type of care you want too. This type of Power of Attorney only takes effect when you become mentally incapable of making your own decisions.
Continuing Power Of Attorney For Property
Taking effect as soon as you sign it, this POA gives your attorney authority over some or all of your finances and property. However, it excludes the authority to make a will on your behalf. This type of Power of Attorney allows for the management of your finances and property on your behalf while you are still mentally capable of managing personal affairs. However, it also lets your attorney continue acting on your behalf if you become mentally incapable too. Moreover, this POA can be “specific” or “limited” too. In other words, your attorney can perform a task like selling a house or you can give them authority for a specified period of time. In some cases, this POA can come into effect only when you become mentally incapable of managing your finances and property. However, this must be specified up front in the document.
Ultimately, it’s your decision how much or how little authority your attorney has. Importantly, you always need to outline the parameters of their power. Remember, when a Power of Attorney is agreed upon, your attorney can do, on your behalf, almost everything with your finances and property that you could. In conclusion, careful planning is always a necessity.
What Factors To Consider When Planning Your Estate
Before reaching out to professionals to help you plan your estate, you must complete a couple of tasks.
You must look at all of your assets, including cash assets (bank accounts, stocks, investments, TFSAs, and RRSPs), non-cash assets (businesses, properties, vehicles, boats, jewelry, heirlooms, etc.), and insurance policies.
You need to decide who you want to receive your assets and when. If you are leaving money to your children, many people choose to put that money in a trust so your children cannot quickly spend it all. It’s also important to note that you don’t have to leave all or any of your money to people. You can also choose to donate your assets to charitable organizations.
If your children are minors, it’s important to decide who you want to become a legal guardian of them should both you and your spouse pass. This is not a small decision, and it’s important to have a conversation with the person you want to select, so this decision is not a shock to them later on. Additionally, if you have any pets, you should list out exactly who you want to take care of your pets should you pass before them.
You need to decide who will be the executor of your will. This person will be responsible for filing your final tax return and ensuring your heirs receive their assets according to your will and wishes. It’s also important to decide who will be your Power of Attorney who can make financial or health decisions for you if you are unable.
Why Choose De Rose Lawyers?
Navigating the family law system can be complicated and overwhelming. Writing wills and choosing individuals to act on your behalf is very important too. Rest assured, De Rose Lawyers provides the help and support you need so you can move forward. Our team always pays attention to the intricacies of your situation with a great deal of thought and consideration.
We work tirelessly and passionately with every one of our clients, giving us a shining reputation among the legal community. We empower our clients by providing them with flexible appointments, affordable legal fees, valuable tools, and information every step of the way.
Sources: