Peter Galbraith
March 10, 2023
Financial literacy Weekly updateThe Weekly Take March 10th, 2023 - Estates Part 1: Why you need a will
Searching Google for "famous Williams"gives a dramatically different set of results than searching for "famous Wills". The former lists William Shakespeare, WIlliam Shatner, William Wallace, and Prince William; while the latter lists Michael Jackson, John F Kennedy Jr, Aretha Franklin, and Abraham Lincoln. As you can probably guess, famous wills refers to famous "last wills and testaments", or the lack thereof.
Dying without a proper will in place can leave an immensely challenging problem for loved ones, at what may be one of the most challenging moments of their lives. Whether you have $100 or $100,000,000, a will is one of the most valuable documents you can create. Without a will, your estate can be tied up for years. In spite of that, many, many Canadians do not have a will in place.
At its most basic, a will stipulates how you would like everything that you have accumulated in your life to be distributed after you pass away. This includes bank accounts, investment accounts, debt, property, your dog, your social media accounts, and even your favourite t-shirt if you'd like. Some parts are incredibly essential to include and others are simply a way to share your feelings or recognize important people in your life. Regardless of how you choose to distribute things, we do recommend that you take time to consider various possibilities, and consider how your heirs will feel.
What happens if you die without a will? The formal term is "dying intestate" and the simplest way to think about it is that you have chosen to let the province write your will. Without any specific direction your estate will be distributed according to the intestacy laws of the province where you live. In Ontario that is the Succession Law Reform Act which generally distributes assets to a spouse and closest next-of-kin. Perhaps most interesting is that common law spouses do not inherit anything if their partner dies without a will - though there may be some ways for the surviving common law spouse to receive something from the estate.
For some people, it's entirely possible that the Succession Law Reform Act is exactly how you want your assets to be distributed. But we would still highly, highly recommend that you write a will so that there is no question about how you want your estate to be distributed, and that your family doesn't have to go to court against someone else to receive their share.
How do I start the process of writing a legal will.
1) Ask. We have a number of lawyers that we and our clients have worked with in the past to create a will, and our happy to refer to them. Alternatively, ask your friends, colleagues, and family members if they have worked with someone to draft a will. You might even do them a favour and be the spark that reminds them to create or update their own will.
2) Think. Write out in your own words how you would like your assets to be distributed and make sure to include as much as you can about as much as your can. Accounts, debts, personal property, cars, businesses, clothing, furniture, charitable donations, etc. You can lump things together or seperate out individual items as much as you'd like. Also include preferences about your funeral.
3) Act. Call a lawyer, book a meeting, and share the list in step 2. They should be asking you a number of questions to better understand you and your goals to make sure they have a total picture before drafting the will.
4) Read and sign. Your lawyer will take your requests and present you with a draft. Make sure you understand it and look back at your own list to make sure everything is accounted for. Ask questions if you don't understand anything. Sign it when you're sure that it meets your desires.
5) Store safely. Many lawyers will offer to hold the original or a notarized copy of the will for you, but you should also have the original or notarized copy for yourself and stored in a safe space away from the likelihood of water or fire damage (a fireproof safe is probably your best bet).
6) Talk. Let your executor (the person who you choose to execute the will) know where the will is, as well as any close family members.
7) Revisit. For many people the will matches their wishes for long periods of time without any need to be updated. Major life changes like the births of children, or the passing of family members often require an update to a will. At a minimum we suggest reading your wills every 3-5 years so that you know it continues to match your desires.
Don't feel bad if wills, estates, or executorships seem scary to you. Unless you're in the legal profession, or have been involved in the distribution of an estate, you probably haven't been exposed to the process and don't understand the amount of work required.
Asking for help is the first step and we are happy to start that conversation with you.
Connect with us today!
Peter Galbraith - Investment Advisor, CFP
613-531-2922
peter.galbraith@cibc.com