Step 2: Your Will
If you tuned in yesterday to our blog, you noticed that this entire week is devoted to a discussion of a "5-Step Estate Plan". Today I will be considering your last Will and Testament - commonly described as the foundation of any estate plan. Often clients, even after they have made an appointment to draw up a Will, will inquire "Why do I need a Will, and what's wrong with simply using an on-line or DIY will kit?".
In a nutshell, if you don't have a Will you cannot select who will be the executor of your estate (also known as the estate trustee) and a Court will be required to appoint this person. Provincial laws will determine who will inherit your estate (and no, your spouse will not always "get it all" as you may expect), children's shares of your estate will be paid into Court and held until they attain the age of 18 (leaving no flexibility for trusts when they are over the age of 18 or for children with special needs), and your estate will undoubtedly be subject to greater tax liability following your death.
One of the most important advantages to drafting your Will is naming your executor and trustee. If there are trusts established under the terms of your Will, this may affect your decision relating to whom to appoint in this regard. Alternate trustees should be considered and a discussion with your lawyer should include whether you think such person (or persons) have the proper judgment and business sense. Where an immediate distribution of your estate is not always in the best interests of your beneficiaries, a properly structured Will can also provide for a testamentary trust or trusts for children and/or a spouse.
Some of the issues that may arise when a lawyer is not involved include neglecting to make provision for outliving your heirs, partial intestacies, and the possibility that a gift provided for in your Will no longer exists at the time of your death. When these types of issues are not effectively addressed they can lead to a much greater likelihood of disputes and family strife after your death.
Other interesting issues to ponder at the Will drafting stage are RESP's for children, loyalty point clauses, and ethical considerations as mentioned by Ian Hull and Suzana Popovic-Montag in a recent Hull and Hull podcast and in another interesting article here.
Sarah Hyndman Fitzpatrick
