As we welcome each New Year, many of us make resolutions in a tradition that dates back to Ancient Rome. As we all know, some of those New Year’s resolutions are too lofty to be achievable and so many fail. However, one which is easily achieved is to make or update your Will.
A properly drafted Will is the cornerstone of every estate plan. Two of the most important functions of a Will are to appoint an executor and direct how and to whom your assets are to be distributed. However, in addition, your Will can implement wise tax planning, name a guardian for your minor children, make charitable donations, hold real estate and other assets in trust for specific beneficiaries, forgive or call in loans, and manage assets for disabled beneficiaries such that their government funding is not negatively impacted. If you have private corporate assets, you may need two Wills: one for your “probatable assets” and one for your “non-probatable” assets. Usually called primary and supplementary Wills, this type of Will planning plays an important role in minimizing estate taxes triggered by death. (details to follow in a later blog!)
If you die without a valid Will, the Succession Law Reform Act sets out a plan of distribution. While this may suffice, it usually adds extra costs and delay to the estate administration process. Further, the provincial distribution scheme may not align with your wishes, and may have unintended consequences: your common law spouse or step-child may be left out in the cold, because they’re not beneficiaries for the purposes of intestacy law.
Death and taxes are two certainties for all of us. If you’re going to keep just one of your New Year’s resolutions, it should be to make or update your Will. A properly drafted Will can reduce the delays and costs involved in wrapping up your affairs, and provide you with peace of mind. Contact your lawyer this month to get the ball rolling.
All the best for 2017.