Estate planning is always important, and the Will is typically at the centre of an estate plan because it’s designed to protect your loved ones and your assets.
A Will is a legally binding document that expresses a person’s wishes for how they want their assets distributed to their beneficiaries after the person passes away, and how they want their dependents cared for. Since your estate is composed of certain assets you own and any debts you may have, the Will is a key component of any estate plan.
The Will is also used to designate an executor who is responsible for managing your estate affairs after you pass away, until all assets and property have been distributed and the estate is considered legally settled. As well, you may assign powers of attorney to address issues like your financial or personal care if you become incapacitated.
Having a Will helps you build a sensible estate planning strategy. It’s also important because it provides you and your loved ones with clarity and peace of mind.
Who needs a Will?
Some may think a Will is only for the wealthy or the elderly. However, everybody who has at least some assets to pass along should have a Will. A Will ensures your assets (big or small) and personal belongings will be distributed to your family or designated beneficiaries. If you own a business, a Will helps ensure a smooth transition of your assets. The executor will keep your business operating in the same manner as you do now, and will seek fair payment for the business on behalf of your beneficiaries.
Keep your Will updated as circumstances change (e.g., marriage, divorce, children, property/business ownership). Having an up-to-date Will ensures your current wishes are reflected. If you die without a Will (known as dying “intestate”), the courts determine how your estate will be distributed and who will care for your dependents, and their decisions may not match your wishes. Also, this may add burden and stress to your family, who now must guess what your wishes would be.
Five purposes of a Will
If you’re still undecided about the value of a Will, here are five good reasons to create one:
- Establish guardianship. Parents want to ensure that minor children or other dependents (e.g., those living with a disability) are well taken care. In your Will, you can name a guardian for your children and provide guidelines on how you want them to be cared for. Discuss the details with your chosen guardian(s) upon their acceptance of this responsibility.
- Define how your estate is distributed. Assets for distribution may include cash, investments, vehicles, jewelry, art, heirlooms, collections or other items. Property for distribution may include your primary home, a winter home (e.g., “snowbirds”), family cottage, rental units or any commercial or industrial real estate you own. Think about family dynamics before drafting your property distribution plan in the Will. For instance, which heir is most likely to use the family cottage? Who needs it most? Who can afford to maintain it?
- Appoint your executor. To ensure your estate affairs are sorted and wishes are carried out by a trusted party, an executor should be appointed in your Will. By appointing an executor to administer your estate, you will have peace of mind knowing your estate will be managed according to your wishes. It’s a good idea to appoint a backup (or two) in case your executor cannot fulfill their duties.
- Reduce family disputes. A clear, properly drafted Will designates your heirs, beneficiaries and how your assets will be distributed. Additionally, a Will could help initiate conversations with your heirs about your objectives and wishes. For example: who will receive certain assets or property, and why; whom you’ve chosen as executor to carry out your final wishes; and who has powers of attorney. Holding such conversations achieves mutual understanding, avoids unpleasant surprises and alleviates confusion.
- Speed up estate settlement. A Will that formally identifies the estate’s executor allows for faster court approval (i.e., probate process) so the estate can be administered and distributed in a timely fashion without unnecessary delays.
Ask for our “Will Companion”
Are you ready to create or update your Will? Our comprehensive record-keeping document helps you track essential components of your Will for future reference. In one convenient spot, the Will Companion captures personal and financial-related details (including contact information and account numbers), lists your assets/properties and debts, and contains important information related to your estate plan.
As your Advisor, I can help you complete the Will Companion. Getting this document to your executor will help save time and effort for the administration of your estate and for the distribution of assets to your loved ones and favourite charities.
Contact our office to learn more about creating a Will as part of your estate plan.