Avoid the default estate distribution
If you don’t have a will, every province and territory has laws that set out who will inherit your assets. “If you die without a will, your estate will be administered in accordance with these laws. This essentially leaves crucial aspects of your estate to be dealt with based on what was decided by the government,” says Jamie Golombek, Managing Director, Tax and Estate Planning, CIBC Private Wealth Management.
Typically, the distribution of your estate ends up being based on family ties and may not be what you wanted. This might create tension in your family and expose your estate to litigation, which might tie it up for years.
Set it, but don’t forget it
If you’ve made your will, that’s great. However setting it and forgetting it isn’t the best strategy. Throughout your life, you’ll experience events that may give you a reason to rethink your goals for your estate. For instance, the birth of a child, a marriage or a large windfall are all examples of life-changing events that may require you to rethink your will. Changes to your assets, outstanding liabilities or relocating to another province or country are other factors that you may need to reflect in your will.
In a lot of ways, your will is simply a snapshot of your assets and wishes at a point in time. Years after drafting one, you may have named beneficiaries on insurance policies and registered assets that conflict with your will.
You can update your will by adding an amending document called a codicil or preparing a new will, if necessary. Typically, a codicil is used to make minor changes to an existing will, such as naming a new executor. On the other hand, major changes may require the preparation of a new will.
Your priorities may change over time, so check in on your will occasionally to identify potential complications and ensure your named estate representative and beneficiaries still match your wishes.
Did you know?
As a result of COVID-19 and social distancing measures, changes were recently introduced to make it easier to execute documents. For instance, virtual witnessing is now available for wills and powers of attorney (POAs) in Ontario and on POAs in Saskatchewan. Check with you lawyer to sign these documents in this manner. These changes are only in effect during the COVID-19 emergency period.