Common examples of why you need a Will.
The point of having a Will is to make life simpler for those left behind. A Will gives your loved ones the authority to wrap up your estate. Most Personal Representatives (Executors) have far fewer problems dealing with banks or the CRA when a Will exists versus when there isn’t a Will.
When you have a Will, you typically name one or two people to act as your Personal Representative(s) (also known as Executor(s)). You can also arrange for a trust company to act as your Personal Representative. The idea is to name someone that is responsible, organized, and can communicate effectively with your beneficiaries.
Example 1: Say you have a spouse that you love dearly, but paperwork intimidates them and they tend to rely on you for completing administrative tasks like doing their personal taxes and paying household bills. Therefore, your spouse may not be an ideal candidate to act as your Personal Representative. However, your adult son, who happens to be chartered professional accountant, is more than qualified to act your behalf. So you can name your son as the Personal Representative and your spouse as the beneficiary. If you don’t have a Will, the first right to apply to be your Personal Representative goes to your spouse...and maybe your spouse is too proud to ask for help and the estate ends up incurring tax penalties because your spouse doesn’t file your tax returns correctly and/or on time.
Example 2: Maybe you are widowed or divorced and therefore it would be up to your 5 adult children to administer the Estate if you don’t have a Will. Maybe there is one adult child that will hold up dealing with the estate, either intentionally or not. Maybe your children tend to fight or disagree, or maybe several of them live in another province or country which could trigger tax issues. Having a Will allows you to make the decisions about who is in charge and aims to eliminate fighting between siblings that would fight to be in charge.
Example 3: If your children are under the age of 18, you should name guardians in your Will. While a court will award guardianship on the basis of what is in the best interest of a minor child, naming guardians in a Will helps guide the Court’s ultimate decision should a custody battle erupt.
Example 4: If you have given one of your adult children several large monetary gifts over their lifetime but have not given monetary gifts to your other adult children, you may want to include greater gifts to those other children in your Will to ensure all your children are treated equally upon your death. If you pass away without a Will directing that the other children are to receive a larger portion of the estate than the one that benefited from your generosity during your lifetime, the law says that each of your children get an equal share of the estate. This may breed resentment between your children after you are gone if you don’t have a Will that tops up the inheritance to the other adult children.
Example 5: If you have children under the age of 18, have you considered that if you do not have a Will that these children will receive the entirety of their share when they turn 18. What if the amount that they will inherit is rather large (especially if you have a sizeable life insurance policy)? If you have a Will you can control the age at which your children receive their inheritance and even stagger the distribution so they get paid out at the ages you think are appropriate.
Example 6: Maybe one of your beneficiaries has a spending problem or an addiction and you want to control how much money they receive after you pass (i.e. monthly installments rather than a big lump sum). Maybe a monthly trust payment or an annuity should be set up to ensure that your inheritance will benefit that person over many years as opposed them receiving everything and spending it in short order.
If you think that any of these situations may apply to you, I encourage you to book a consultation today to discuss your Will.