The new year is upon us, and for many, that means a time for resolutions. If finally getting around to making a Will is one of those resolutions, you’re certainly not alone. Nearly half of all Canadians do not have a Will despite the numerous negative consequences that result; these can range from the question of who raises your minor children to a total loss of control over who inherits your estate.
Here are some Do’s and Don’ts of Will planning:
Don’t make the common mistake of assuming that if you die your spouse simply handles things.
You may assume that your spouse can just simply access your assets, pay your bills (like the mortgage, credit card bills, utilities etc.) and transfer the assets (like the house) to themselves.
This is not the case – without a Will appointing them as executor, your spouse has no legal authority to deal with your assets. The only way for your spouse to be recognized as the representative of your estate is for your spouse to apply to the Court to be appointed the “Administrator”. This is costly and can take several months, meaning less for your beneficiaries and further delays on when they receive it.
Don’t leave your children out, either.
If you have children under the age of 19, it’s crucial to prepare a Will. In your Will, you can appoint a guardian (as well as an alternate) to take care of your children if you die while they are still minors. If you die without a Will and consequently without appointing a guardian, the provincial government will step in and act as guardian and manage their money (they charge a fee for this management). In order for a guardian to be chosen, any close friend or family member who has involvement in the children’s lives may apply to the Court to become the legal guardian. Apart from potentially creating turmoil and family conflict, this is also a time consuming and expensive option. Most importantly, the decision on who will raise your children is out of your hands and at the discretion of the Court.
Don’t leave the question of who inherits from you to the Government.
If you die without a Will, you are said to have died intestate and with intestacy comes a loss of control over who inherits your estate, and when.
The intestacy laws in B.C. determine beneficiaries of an estate based on a hierarchy of the next of kin. It starts with a spouse, then children, then parents, then siblings and so forth.
The importance of a Will is significant if this hierarchy does not work for you. For example: Sally dies without a Will, and leaves no spouse or children behind, but both her biological parents are alive. Sally was raised by her mother and has never met her biological father. Regardless of this estranged relationship, according to B.C. law, Sally’s mother would only receive half of her estate while the other half goes to her father.
Further, the intestacy laws do not include step-children which means if you die without a Will, your step-children whom you may have raised and consider to be your own, will not inherit a dime from your estate.
Also, note that if you die without a Will your spouse is only entitled to a portion of your estate and the remainder is to be split with your children. The children must be given their share, which could mean that your spouse has to sell your family home in order to do so.
Do set your spouse or next of kin up to avoid experiencing unnecessary hassle, stress, delays and expense.
If you would like to check this New Year’s resolution off your list, we can help. Contact our Wills & Estates team to get started on your estate planning.