10 Things You Might Not Know About Wills and Testamentsin Independent Living
Written by PARC Retirement Living
While most of us believe in having a will, getting around to making one and then keeping it up to date aren’t always a priority. In fact, an Angus Reid poll found that some 51 per cent of Canadians are without a will. Though older adults are more likely to have a will compared to other age groups, a Google Consumer survey revealed that one-fifth of seniors have an out-of-date will.
To underscore the importance of having a current will and testament, here are 10 points seniors might not already know.*
1. You don’t need a lawyer to make a will – but it’s a good idea
There are generally three ways to write a will. You can do it yourself with a low-cost will kit, but be aware that simple wills don’t usually account for unforeseen circumstances. (For example, your executor – appointed by you to carry out your will’s terms – becomes incapable of performing their role at the time of your passing.) You can instead fill in a more detailed, low-cost online will, similar to inputting taxes online. Or you can go the traditional route and hire a lawyer or notary public (rates vary but can be expensive). You aren’t required to obtain legal advice, but a lawyer can make sure all your documents are properly prepared, which is especially helpful with complex estates. Alternatively, you can have a lawyer review an online will.
2. A will is an evolving document
Assets and personal circumstances change throughout your life, and a will needs to be reviewed and updated accordingly. Acquiring a vacation property, selling a house, the birth of grandchildren or death of a spouse should all be accounted for to keep your will current and make sure your assets are passed on as you see fit today.
3. Ensure your wishes are carried out with a will
Even if your financial situation is straightforward, a will provides you with peace of mind by guaranteeing your property will be distributed as you desire and to beneficiaries of your choice – from adult children and grandchildren to charities and organizations. And by appointing an executor, someone you trust and know to be reliable and sympathetic, you can be assured your estate plan is in capable hands. Alternatively, an intestate estate, or one without a will, is distributed by the government, and likely not in a way that would align with your wishes.
4. Reduce hassle and heartache for those you love
You’re not legally required to have a will, but it can make things easier for those you leave behind. By spelling out how your assets are to be handled and who your beneficiaries and executor are, your family isn’t left spending time and fees on applying for a grant of administration in the midst of their grieving. Some taxes also stand to be deferred, debts can be dealt with earlier and potential family feuds avoided if a will is in place.
5. Don’t underestimate your wealth
As noted in Wills, Probate and Inheritance Tax for Dummies: “Insurers know from experience that people often underestimate their own worth . . . your home may only be the tip of the iceberg – don’t forget your cars, cash held in savings accounts, shares and pensions.” Add in life insurance payouts, real estate, business interests and other assets, and you have a sizeable legacy to pass on to your family. A will makes sure your wealth is distributed on your terms.
6. Designate others to make decisions on your behalf
In addition to a will, an estate plan ideally should contain documents addressing your future financial and health care management. These files can also save your family a potentially costly and time-consuming court process down the road:
• A power of attorney authorizes someone else to manage your legal and financial affairs in the event you become physically or mentally incapable;
• A representation agreement ensures a person of your choice will make decisions about your health care treatment should you become unable to decide for yourself. You can specify what should be considered and under what circumstances.
7. Other helpful documents
The passing of a loved one is a highly emotional and stressful time for those left behind. Outside of having an up-to-date will, you can help ease the pressure by preparing:
• A list of your funeral wishes, including items like cremation/burial choice, the cost of your funeral and who you’d like to attend;
• An inventory of your assets so your executor easily knows where everything is.
8. Keep an original copy of your will in a safe fireproof place
Speaking of keeping your executor in the loop, they’ll need an original copy of your current will to give to the probate registry. Store the original copy with your lawyer/notary public or in a safety deposit box at your bank.
9. Proper planning can help soften the tax hit
Capital gains from your assets can be taxed after you’re gone, leaving beneficiaries a smaller inheritance than what you might have envisioned. Fortunately, there are ways to help protect your estate from taxes, including:
• Gifting assets to beneficiaries while you’re alive (for example, contribute to a grandchild’s post-secondary education or donate to a favourite charity);
• Purchasing life insurance, with payout proceeds going towards estate taxes, funeral bills and other legal fees.
10. Talk about your plans with friends and family
It might be uncomfortable to talk about money, wills and final wishes with your family or friends. But if those close to you know where your legal documents are kept and who you’ve appointed as executor, it can make things easier after you’re gone. Explaining certain details of your will to beneficiaries can also help avoid surprises and impart clarity.
*This is meant to be a general guide to wills and testaments. Be sure to seek professional advice before making any decisions. And visit the B.C. government’s website section, Wills and Estate Planning, for more information.