Expectedly, many people have an aversion towards wills. They are a heavy, complicated subject that comes with an array of other unexpected complications, frequently in the form of disagreements between family members during estate planning.
There is a common myth that without a will, you leave your possessions to the government, and that is not the case. The only thing that you leave to the government is the decision of how they will distribute the assets they owned.
While most people see wills as merely a document for splitting their assets after they pass away, there are other aspects of wills that are equally as important. A will can have a person’s last wishes in it, instructions on how to manage their possessions, even personal confessions, elements that can be of importance to family members and close friends after a person’s passing.
To help you get a better understanding of wills, their importance and special conditions you should consider, let’s go over what you should know about and include in your will.
Additional Reading for Smart Estate Planning
- Who needs a will? And why?
- 3 moments when you should review your estate plan
- Is creating a will online safe?
- What happens to your assets after you die?
- Who is responsible for your debt after you pass away?
- How much does it cost to die?
- Do families fight over estates?
- Are you planning a death dinner (to discuss your wishes after you're gone)?
- Can you protect your digital assets?
- Life insurance and estate planning in the age of COVID-19
- International property and the problem with multiple taxes after death
What terms are essential to know in a will?
- Will – A will is a legal document where you list how you want your property to be distributed upon your death.
- Dependent – Dependents are financially reliant on your support, such as minors.
- Estate – Your estate includes all assets you possess, which may include interests and holdings in land, investments, retirement savings, and business interests.
- Estate plan – Your estate plan includes how to manage and organize your wealth and assets to meet your needs during your life and distribute the remaining assets upon your death.
- Estate Trustee – The estate trustee is the person you give the power to administer your estate after you pass away.
- Trust – A trust is a legal relationship where a person called the holds legal title to the property for the benefit of another person under certain conditions.
- Power of Attorney – Power of attorney is the authorization you give to another person to make decisions about your estate or your health on your behalf under certain conditions while you’re alive.
- Executor – An executor is a person who has the legal responsibility to take care of the distribution of your estate and debt after your death.
- Probate – Probate refers to the legal process undertaken to confirm the validity of a Will and to name an Executor.
Why is having a will so important?
You have control over your assets
Did you know that if you don’t have a will, the government will name someone that will decide what will happen with your assets? Imagine leaving that much control in some unknown person’s hands. We’re talking about your close one’s future and as such, you will want someone who has your family’s best interest in mind.
Your family will get their share
When you don’t have a will, settling your estate can take a lot of time and money, money your heirs will have to pay, especially if you have some savings aside. Although the inheritance regulations vary from province to province, most of them apply different kinds of taxes and estate fees for property heirs. You can avoid this by simply writing a will and spare them from the whole administrative process and additional costs.
It will be easier for your loved ones
Not having a Last Will makes it more difficult for your close ones to get the money you left for them, and going through the whole process of splitting your estate can be very stressful for your close ones, especially your children. Having an estate plan will take off this burden off your close one’s shoulders because they can settle everything financially and legally by just writing a will.
Confirmation of your wishes
By leaving a will, you will know that your executor will accomplish what you’ve asked of them. Aside from being a respectful thing to do, the law even requires you to follow through with the deceased wishes.
However, making a will isn’t just a one-time thing. It’s essential to keep it up to date and recent so that all wishes you make in it are considered relevant. If you made your will a decade ago, the legal representatives and the court might not consider them as valid.
A lot of family disputes have started because of property division resulting from one person’s death without a will. Make sure your plan is straightforward and clear, so it’s easy to understand what you wanted. Using vague sentences like “my estate will be split equally” can be interpreted differently, leading to potential arguments between family members.
What should you include in your will?
A will can be as short or as lengthy as you choose. Everything depends on your assets, their complexity, and how many wishes you have after your death. However, at a minimum, make sure to include the following things:
- List of assets and debt – The estate and debt you have at the time of your death to distribute between beneficiaries.
- An executor – The person who will manage all of your tasks and deal with the financial side of debt and releasing money to beneficiaries is known as the executor.
- Beneficiaries – The person or people who will inherit your estate.
- Debt management – Your will should include instructions on how to deal with your debts, and who is responsible for repaying those debts.
- Trusts – If you’ve set up any trusts, what are the conditions to getting them, and who is the receiver of the trust?
Special conditions you should consider while creating a will
Certain circumstances need special consideration when writing a will and planning your estate. Some of those include, but are not limited to:
- Blended families
- Business interests
- Family and other trusts
- Dependents with special needs
- Recreational properties
- Charitable giving
- Taxation issues
- Investments and retirement savings
- Debts bigger than the inheritance
- Jointly owned properties with right of survivorship
When some of these situations exist, make sure to take them into account. For instance, if you are in a blended family, which spouse owns what, and what part of your share will the kids inherit? Some of these situations are regulated by law, so you can turn to your legal advisor if the issue you’re dealing with is more complicated.
Once you’ve decided on everything, it’s time to write your will. Most people think that for a will to be valid, it has to be created by a lawyer, when in fact, that’s not the case at all. Your will can be legally binding if it’s written by you and signed by two witnesses that have no benefits from the will and confirm you’ve written that will with your full mental capacity and sanity.
Only a mere half of the Canadian population has a will, and many of those that have one wrote it so long ago that it is now outdated. The person owned assets included in older wills before a significant event in their life took place. This means that so many people miss out on having their final words and wishes heard by their loved ones.
Although writing a will may seem complicated, take one step at a time. Writing a will ensures that your loved ones will be financially protected after you’re gone, making everything worth the effort.