It’s easy to postpone writing a will. So that your loved ones don’t end up with problems and disappointments, here are some things to consider and advice to follow to ensure peace of mind.
Yes. The process is not only essential for planning your estate in the event of death, but also to protect yourself in the event of incapacity, providing for the division of your assets, covering funeral costs, ensuring your wishes are respected, taking advantage of the best tax strategies for your heirs and making sure your death doesn’t become a source of conflict.
If you don’t have a will, the courts will determine who your heirs are and what portion of your assets and money they will inherit. Because the legal system doesn’t distinguish between your life situation and that of other citizens, the rules are the same for everyone. Only a will can guarantee that your specific wishes are carried out. Many people put significant effort into building up their personal estates—yet less than half of Canadians have a will.
Without children, your partner will inherit nothing—neither property nor money, no matter how many years you’ve been living together. Your family members—brothers, sisters, parents—are the ones who will automatically inherit all your worldly possessions.
If you have children together but no will, according to the law, your partner will only inherit a third of your wealth. The rest—your assets, the value of your home and investments, and RRSPs—will be divided among your children.
If you don’t have any children, your entire estate will go to your partner. However, if one or both of your parents are still alive, your partner will only inherit two thirds of your estate, and the rest will be divided equally between your parents. If you have children, your partner will inherit one third and your children two thirds.
According to the law, without a will, no matter the reason or how many years you’ve been separated, your ex-partner will inherit everything. By the letter of the law, you are still married to this person—they will even take precedence over any children you have together.
There are three types of wills recognized by law. When it comes to planning, a will drafted by a notary is the most ironclad way to cover all the scenarios that could arise after your death. For instance, what happens to your dependent children if you die in a car accident with the rest of your family members? It can be a difficult and complex process, but with a notary’s expertise, your heirs can avoid many problems.
The two other options to consider are a holograph will, written by hand, and a witnessed will. Just be aware that the most economical option may not be the best option, as certain details might be overlooked.
To avoid potentially painful family conflicts in the event that you are no longer able to make decisions for yourself, it’s a good idea to designate a person (a mandatory) to act in your interests during the execution of your will with a notary. A protection mandate is crucial if your health deteriorates to the point that you can no longer manage your estate, including your finances, bill payments, bank transfers and other day-to-day obligations.
As such, power of attorney is also an interesting avenue to explore. It allows a third party to carry out your banking transactions. You can write it yourself or have a legal professional prepare it for you. You can modify or cancel it at any time, so long as you are capable.
An executor is the person you designate to settle the terms of your estate and will, according to your wishes and applicable laws. It’s also a good idea to know the different options and solutions available to you, such as a personal or family trust, which provides tax advantages in addition to protecting certain assets.
Everyone wants their loved ones to have peace of mind, so it’s best to put your wishes down in a will—sooner than later. As your situation evolves, you’ll simply need to revise the document, for instance, in the event of a separation.
In terms of strategic planning, properly managing your estate and the distribution of your wealth could be one of the best investments you’ll ever make.
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