Many Canadians die without expressing their wishes in a Will, and this can tie up the administration of their estate and cause unnecessary grief for family members at an already stressful time. Making a Will is not expensive or difficult. Below are some things to consider.
Name an executor
A Will allows an individual to name an appropriate executor and trustee (estate trustee in Ontario). Being an executor is a serious commitment and unfortunately, executors often accept the appointment without fully understanding the role. When considering whom to name as executor, ask yourself: Is the person you are considering familiar with the duties and responsibilities of an executor? Have they previously served as an executor? Do they have the time? Can they remain impartial if there is a dispute? Are they aware there is the potential for personal liability? In many cases, it may be more advisable to engage a corporate executor such as Concentra Trust.
Name a guardian for minor children
The Will maker is able to name a guardian for their minor children. This is often an obstacle, as parents hesitate to decide who is best suited to care for their children. The role of the guardian appointed in a Will includes the supervision, care, control and custody of the child, but does not provide the guardian with the power to manage the child’s property. Although all guardianship appointments must be ratified by the court, parent’s wishes are taken into account and given strong consideration. When a guardianship appointment does not exist, the court will appoint the guardian.
Name your beneficiaries
The Will maker can determine who will benefit from their estate, the amount of the bequest and when the beneficiaries will receive their gift. Will the gift be released outright or held in trust? Who will receive their personal effects and collections? Which beneficiary receives what piece of real estate? Alternatively, will all assets be disposed of and the cash distributed amongst family members or charities? Moreover, it is important to ensure beneficiary designations on registered plans and insurance policies are not in conflict with the intentions set out in the Will.
Establish trusts
A Will is one method of establishing a trust, as the Will maker may be concerned about caring for a spouse, a dependant child, a disabled beneficiary, a family member with addiction or spendthrift issues, safeguarding assets for future generations or providing ongoing funding to a favorite charity or educational institution. A well-constructed trust is a useful and powerful estate-planning tool.
Work with professionals
Working with a reputable estates and trusts lawyer and an accountant can provide greater opportunities to minimize taxes on your death. Writing one’s own Will or using a Will kit may work for some people, but caution is necessary. If there is any question about whether to write one’s own Will or use a Will kit, individuals should err on the side of caution, see an estate and trust professional for estate planning and an estate lawyer to draft the Will. The money saved by writing one’s own Will or using a Will kit can potentially be offset by the legal fees and family disharmony incurred if the Will has to be interpreted by the Court.
Charitable giving
Canadians are known as a giving population and a Will lets them continue their support for a favourite charity or educational institution. Bequests to charities can take many forms. Cash is common (as either a set dollar amount or percentage of the estate under the Will) although other options include shares, works of art, etc. Other ways of benefiting a charity include establishing a charitable annuity, trust or foundation, or funding the gift through life insurance. It is important to use the charity’s full legal name and charitable registration number. The Will can specify how funds may be used, and what is to become of the gift if the charitable organization has changed its name, or is no longer in existence.
Reduce the likelihood of family disputes
A Will, prepared by a reputable estates and trusts lawyer, lessens the possibility of Will challenges and family disputes, especially if Will makers take the next step by being forthright with the beneficiaries as to how the estate will be distributed, and why. This alleviates a great deal of stress when the time comes and the terms of the Will become known to the family.
People’s lives and their personal situation evolves over time. Having an up-to-date Will ensures their Will reflects their life changes, whether it is because of birth, death, new relationships or relationships that end.
Successor Holder vs. Designated Beneficiary on a TFSA
Similar to RRIF, there is a difference between appointing a spouse/CLP as successor holder vs. designating them as a beneficiary. As successor holder the spouse/CLP assumes ownership of the TFSA on death and the tax-sheltered status of those funds is maintained. The TFSA contract continues in the name of the surviving spouse/CLP, subject to the same terms and conditions as before the original holder’s death. The amounts held in the TFSA will not affect the contribution room of the surviving spouse.
Whether you are planning your own estate or dealing with a loved one’s death, we offer a wide range of solutions for the effective planning and transfer of assets to the next generation. Contact us today to learn more.