Do you have a will yet? If the answer is no, then you’re amongst the many Canadians (about half of the adult population) who have yet to start estate planning.
Estate planning is something everyone must do at some point, and shouldn’t be left until the last minute. An estate plan comprises several key documents that outline your end-of-life wishes, including your healthcare decisions. In this post, we’ll focus on the last will and testament.
What is a last will and testament?
Simply put, a last will and testament is a legal document that provides instructions as to how your property and assets will be distributed amongst your loved ones after you die.
Regardless of age, it’s important to ensure your assets and property are distributed the way you want should you pass away unexpectedly.
What to put in a will
A last will addresses many important matters. You can use it to:
- Appoint an executor to carry out your instructions and wrap up your estate.
- Decide who receives your money and property. Common gifts include sums of money, real estate, and items of monetary or sentimental value.
- Give a gift to a charity or non-profit organization of your choosing.
- Name a guardian for any minor children.
- Give your executor instructions to hold any gifts in trust for your children until they reach the age of majority.
- Appoint a caretaker for your pet.
When should I make a will?
Many people think that writing a will is a task to be done later in life, when in fact you should create a last will and testament once you’ve accumulated any significant assets and property, including real estate, a vehicle, savings, or investments.
Your will is a living document, meaning it should be continually updated. Whenever you go through a major life change, such as getting married (or divorced), having children, purchasing property, or starting a business, you should update your will to reflect your new circumstances. For instance, if you get married, you may want to make your spouse your main beneficiary. If you experience a major windfall, you can ensure the money goes to someone of your choosing.
What happens if I don’t have a will?
If you die intestate, which means to die without a last will, the government decides how your estate will be divided—which should be added incentive to write your will sooner rather than later.
Without a will, your assets and property will be distributed according to the succession laws of your province. The general outcomes are:
- If you have a spouse and no children, your spouse inherits everything in all provinces except Quebec. However, it’s important to know that provincial intestacy laws define “spouse” differently. For instance, in Ontario, a married spouse will automatically inherit, but a common-law spouse will not.
- If you have a spouse and children, the succession laws differ widely from province to province. In some jurisdictions, your spouse inherits a specific share of your estate, with the remainder being divided between your spouse and children. In other provinces, your spouse might inherit everything or split your entire estate with the children.
- If you have children but no spouse, they will likely receive your entire estate.
- If you’re single (no spouse or children), your estate generally goes to your parents. If your parents are no longer living, your estate would go to any siblings, followed by nieces and nephews, followed by any other surviving relatives.
if you have no spouse, children, or living family members, your estate normally goes to the government. While that might not sound so bad, don’t disregard estate planning just yet, because there are other people in your life who might benefit from an inheritance. Do you have a domestic partner? Close friends? A godchild? Alternatively, do you have a favourite charitable organization? Charities and nonprofits also depend on legacy gifts to keep their operations up and running.
Estate planning essentials
The process of estate planning can bring you uncomfortably close to your own mortality, making it easy to leave at the bottom of your to-do list. But life is unpredictable, and the distribution of your estate should be up to you, not the government. A last will and testament allows you to determine what will happen to your assets and property should you pass away and can ensure your loved ones are taken care of.
Jessica Kalmar is a marketing writer at LawDepot, a leading publisher of online DIY legal documents.
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Flickr: Ken Mayer