Family

Getting the best out of life with your partner, kids and parents

Five important considerations when writing a will

By Sheila Avari, BrighterLife.ca

Comments (2)

They’re called the “accumulation years,” the 20, 30 or 40 years we work and earn money. During this time we buy a home, own a small business, volunteer, donate to charities, dabble in stocks, buy life insurance. Whatever our assets and interests, we want them protected and passed down to good hands.

Image of a couple meeting writing a will.The solution is to create a will and keep it updated — not the most enjoyable of life’s tasks, but one of the most important. Yet about half of us don’t have a will or a power of attorney document, says Karen Anne Platten, an Edmonton-based attorney and the chair of the Canadian Bar Association’s National Wills, Estates and Trusts Section.

A power of attorney authorizes someone to act on your behalf. There are two types. One addresses your property and the other addresses your personal care and health-related decisions in case you become mentally or physically incapacitated. A will, on the other hand, addresses your estate on your death. If you do not have a will, the law — not you or your family — decides who can apply to be the estate administrator and how your estate will be divided. This means the distribution of your estate may not be what you want. For example, in most instances, a preferential share goes to the spouse and then the balance is divided among the spouse and descendants. A clear outline of your wishes, set out in a will, can help avoid family disputes.

There are five important issues to carefully consider when writing your will:

1. Who will you ask to care for your “stuff” and for your children?

The executor is responsible for everything after your death, overseeing who gets what and making sure all your debts are paid. Most people appoint their spouse as executor and list a family member or close friend as a back-up. The will may state an amount to be paid to the executor as a fee, usually based on the size and complexity of the estate.

A will is meant to handle all aspects of your property. It’s also normal to appoint guardians for minor children and a trust for their support in your will. But, since children are not property, while what you state about them in your will is given significant weight by the courts, it isn’t binding.

2. Are there specific circumstances that should be addressed?

Wills are as simple or as complex as your life. Business owners and people who own shares of private corporations require special treatment in a will. Complicated family issues such as distributing an estate when there is a second marriage also need careful consideration. Platten says one of the biggest mistakes people make is not telling their lawyers their entire family stories.

3. How are the assets held?

Believe it or not, says Platten, people don’t always own what they think they own. You may have divested a property or transferred a portion of your business years before and forgotten about it. “This is important,” she says, “because when you are giving assets away you have to make sure you actually own them.” Assets can be held in a variety of ways, including jointly with right of survivorship, held as tenants-in-common where two people each have a half-interest or held with beneficiary designation.

4.  How do you want your assets distributed?

Dealing with children or other dependants fairly does not always mean dealing with them equally. “I’m seeing less equal distribution these days,” says Platten. “One of my clients had three kids. The life insurance proceeds went to the two younger kids because the eldest had finished university and started working.”

Ken McNaughton, a financial advisor in Victoria, B.C. does not draft wills but advises his clients to divide their estates using percentages rather than fixed dollar amounts, because an estate’s value changes over the years. If you wish to leave an additional amount to someone privately, McNaughton and Platten suggest using an insurance company contract, either life insurance or an investment account, which can name a designated beneficiary.

The death benefit paid under a life insurance contract and certain non-insurance plans does not form part of the estate, and will remain private when paid out to the named beneficiary. Note, however, that in some Canadian provinces, if a testator has not adequately provided for his or her dependants, a court can order that all or part of the insurance money be paid to the estate or specific dependants.

5.  When should you change your will?

It’s important to keep your will current. Any time there is a change in your life your will needs to change, too. Marriage, re-marriage, separation, divorce, birth or adoption, the death of a spouse or of an executor are all reasons to make changes to your will. Patten advises reviewing your will at least every three to five years.

Financial planning Check out more financial planning tips and tools.

Image of thw Sun Life whimsical sun - Money for Life Are you on track to meet your financial and retirement planning goals?
Having a plan to protect your family and build your savings now can help ensure you will have enough money to last through retirement, so you can live your retirement your way. Learn about Money for Life.™

Need help managing your money? Meeting with a financial advisor can help determine if you’re on track to meet your financial goals. Don’t have a financial advisor? Visit Sun Life Financial’s Advisor Match to help you find one in your area.

Stay connected

Get more tips and tools to help you live brighter.

Enter your email address below:

Learn more

Looking for more ways to protect your family?

Find out how critical illness and life insurance work together to protect your family with with insurance solutions from Sun Life Financial.

Take action

Get advice on your personal situation

Connect with an advisor in your area to learn more about how health insurance can fit into your plan.

Visit Talk to an Advisor.

melody brown on

I like what you said about keeping your will current. My grandma left her house to my uncle when she died, but she wanted to change it and leave her house to my other uncle. He needed a steady place to live for awhile and she knew that the other uncle didn’t need it at all. Unfortunately, she didn’t change it in time and the uncle that needed it more didn’t receive it.

Alexander Lao on

Hi, does a will need to be drafted by a lawyer? Can we draft a will ourselves and not use a lawyer?
Thanks

Alex

Add a new comment:

Note: Please be sure to read our commenting policy and terms and conditions for this site. We reserve the right to delete any comments that we view to be in violation of our policy. The name you provide will appear next to your comment. Thank you!

Your email address will not be published. Required fields are marked *

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Free financial review - Start now!
Get the Money for Life newsletter

Connect to your Brighter Life