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Many individuals assume that their estate will pass to their spouse without a Will. But the reality is - in Canada, if you don't have a Will, the laws in your province or territory will determine how your estate is divided.

This is an edited version of a Perspectives article, originally published on RBC Wealth Management website.

Among Canadians of all ages, almost half do not have a Will. For younger Canadians (aged 27 to 34), that jumps to 88 per cent.1 There are many reasons people may have put off making a Will: for example, assuming they are too young, pushing it aside for other priorities, or feeling uncomfortable looking ahead to their eventual passing. But the reality is — a Will is important for adults at every life stage.

Understanding Will basics

Generally speaking, Wills can be considered the guiding legal document in the administration of an estate, in which individuals express their wishes as to how property and possessions are to be distributed at death.

Many individuals make the assumption that without a Will, their estate would pass to their spouse. In fact, those who pass away without a Will are said to have died “intestate,” meaning their estate will be administered pursuant to the provincial or territorial intestate legislation based on where they resided at death. Each province and territory has its intestacy laws that define an estate’s beneficiaries and their estate settlement. In a situation where someone dies “intestate,” that could potentially leave a strain on family and loved ones.

8 key considerations in planning your Will

Beyond the basic drafting of a Will, here are some key considerations as part of Will planning and to ensure your Will accurately reflects your wishes.

  • Planning in advance to avoid potential oversights and urgency – Leaving the planning to the last minute often means there may not be time to consider all of your options. Planning well in advance can help eliminate many of the pressures associated with drafting a Will and helps to ensure you have the opportunity to examine all options.
  • Naming a guardian for minor children – When it comes to minor children, a Will provides the legal means for parents to identify whom they wish to be a guardian should the unexpected happen. In certain provinces, the guardianship appointment needs to be confirmed by the court. Without a valid Will outlining your decision, the government decides who will raise the children in accordance with provincial or territorial law.
  • Understanding the tax impact of certain approaches – While you may have certain decisions in mind, it’s important to consider what the potential tax consequences will be and how they may impact the estate. This is especially important to help ensure equality among beneficiaries. What may seem like an equal distribution may not end up that way once tax implications are factored in.
  • Ensuring executors and trustees are capable and co-operative The role of an executor (or liquidator in Quebec) is to administer your estate in accordance with your Will and/or the governing provincial or territorial legislation. Family members or close friends are commonly a preferred choice for these roles, but dynamics should be taken into consideration, especially when individuals opt for co-executors or co-trustees. When individuals can’t work well together, this may increase the likelihood of conflict, delays and unnecessary expenses in the estate administration process.
  • Factoring in your beneficiaries’ spouses – Everyone’s family circumstances are different. One may want to consider the potential that a gift to a child may end up going to a daughter- or son-in-law. For example, if an inheriting child were to pass away shortly after the parent’s death, the inheritance could pass to the child’s estate, which means the asset could pass to their surviving spouse. In this situation, a “survivor clause” in which the beneficiary must survive you for a specified time period in order to inherit may be an option to consider.
  • Considering assets that will pass outside of the estate – As part of putting together a Will, review which assets will pass outside of the estate. This is also a point to keep in mind for updating a Will — if you decide to transfer an asset during your lifetime or make changes (changing an account to a joint account with right of survivorship, for example) this would likely necessitate an update to your Will.
  • Leaving assets to the surviving spouse – In any situation where a surviving spouse has not been provided for in a Will, he or she may be entitled to make a claim against the estate for support. Even if this is done inadvertently, this oversight may mean the family and the estate could be exposed to the costs, delays and stress of taking legal action to address the situation.
  • Naming beneficiaries to receive the “residue” of the estate – Generally speaking, “residue of the estate” is the assets remaining after payment of debts, taxes and other expenses incurred in the administration of the estate and any gifts of specific assets or sums of cash. Much like not having a valid Will at all, if beneficiaries aren’t named to receive the remaining residue, the leftover assets could end up being distributed in accordance with the provincial or territorial rules.

Note: This list of considerations is non-exhaustive and may not necessarily apply to your individual circumstances. As such, it is crucial to consult with qualified legal, tax and estate professionals to ensure your situation and needs have been appropriately accounted for.

When to review and revise a Will

Once you’ve created a Will, it’s equally important to update it so it accurately reflects your wishes and intentions. A good rule of thumb is to review your Will every three to five years. Further to a routine review, however, the following are some situations and events that may impact a Will.

  • Marriage, divorce or re-marriage – A change in marital status marks one of the most important times to update or prepare a new Will. This is because, in many provinces and territories, marriage cancels previous Wills. If someone remarries and were to pass away before preparing a new Will, their estate would be treated as if they died intestate. Updating a Will after a divorce or separation is also crucial, as these events do not cancel existing Wills in many jurisdictions.
  • Changes to financial position – While mid-life is generally a good time to revisit your Will, shifts in your financial position should also be a catalyst for reviewing plans. If your net worth has increased significantly since drafting a Will, there may be new assets that need to be accounted for or opportunities to limit tax implications.
  • Death of a life partner, executor or beneficiary – The death of a spouse or life partner usually necessitates an update to an individual’s own Will. If your executor passes away, changing a Will as soon as possible is crucial. If one or more of your beneficiaries dies, the Will and any other estate-related documents should also be updated.
  • Acquisition of foreign property – When purchasing foreign property, a range of estate-related factors and their resulting consequences need to be considered. From a Will perspective, individuals need to determine if their Canadian Will (and Power of Attorney) is valid in the jurisdiction where the property is located. In some instances, a second Will may be needed.
  • Change in province or country of residence. Every jurisdiction has its own laws and requirements pertaining to Wills, so it’s crucial to consult with a qualified legal and tax advisor to ensure both your Will and estate plans are valid when you relocate either within or outside of Canada. Check also if the choice of executor and trustee are still valid.
  • Changes to legislation. Federal and provincial laws can have a significant effect on estates and taxation. Consult with a qualified tax and legal advisor to determine the impact of any legal changes on your Will.

Final thoughts

Individuals should always ensure executors and beneficiaries either have a copy of the Will or know where it is stored. Additionally, it is important to keep your executor up to date whenever there is a change to your Will to help avoid delays and prevent unnecessary confusion or stress when it comes time for them to fulfill their role.

1 Too many Canadians have no will,, 2020

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