Estate planning 101: prepare a will and renew it
February 12, 2015
A will is your final instruction on how your wealth will be distributed after you die. It is the best way for you to reflect your values. Beware you do not make any technical mistakes.
The devil is in the details because any one of many potential technical errors could mean your will is not valid, thereby making your wishes not legally binding. Even the most minor error could invalidate your final wishes.
This information came from a presentation made by Oakville lawyer Sharon Davis last week. In a talk titled Estate Planning 101 she explained the law governing wills and gave examples of how small mistakes have been made which invalidates a will.
If you die without a will, a formula determines how your assets will be distributed. If you have a spouse and no children your estate goes to your spouse. If you have children but no spouse the children share equally in your estate.
If there is no spouse or children then the priority of heirs is in the order of parents, siblings, nephews or nieces and next of kin. If there is no family member, then your estate goes to the crown.
If your will can not be found then your estate is divided as if you do not have one. Having a will is one thing, but it is critical your family can locate this important document.
Your will has several key considerations. It is governed by legislation and must meet the legal formalities.
You must have two independent people witness your signature and both must be present when you sign your will. If one witness was called in after you signed the will, then you have not followed protocol and this could be a reason for the entire will to be disallowed.
If you only have one witness then your will may be determined to not be legally binding. The same is true if one of the witnesses is not independent; for example, a witness cannot be a beneficiary.
If you marry, your current will is revoked. You should, therefore, complete a new will.
Completing a will and discussing it with your family can be very emotional. Not many want to do or discuss something that only takes effect after their death.
That is understandable. However, death is not unique to anyone; it is inevitable. It is part of life. Another part of life is taking care of your loved ones. A will does that in several ways.
First, from an administrative perspective, your assets will be passed on to someone after you are gone. Much better to make that decision than rely on the standard asset distribution formula when there is not a will.
It is easier from an emotional perspective for beneficiaries to receive assets as a result of your specific wishes. Those beneficiaries are the ones that you love and what better way to acknowledge that by your effort to complete your will.
As your life changes, both with family and others you want to include in your will as well as your financial situation, you may wish to change your will or make an entirely new will. A new one automatically replaces any previous will.
One consideration when deciding whether to have a will is the cost. There are several options. The best advice would be to consult a lawyer that has estate planning as part of their practice.
Alternatively there are online will kits, or you could attempt to write a will yourself. The saying “you get what you pay for” applies here. Yes, you can save money by avoiding a lawyer, but what is the risk of not having a valid will that allows your final wishes to be implemented with the distribution of you wealth.
We strongly recommend you have a current will that involves the professional input of a lawyer. It is what every adult should have. Review your will periodically and adjust your will or re-do your will when needed.
To see Sharon’s presentation: Estate Planning 101: Are you prepared? click here.