Estate Planning
Why it’s important to have a will
Good financial planning is all about providing for you and your family. And while nobody likes to dwell on it, that means ensuring your loved ones are taken care of after you die.
To ensure that your assets are dispersed to your family according to your wishes, you need a will. A will is a document that contains explicit instructions on how the various elements of your estate will be distributed to your beneficiaries. Dying without a will (known in legal circles as ‘intestate’) can cause considerable complications and may result in your assets being distributed against your wishes.
Without a will, provincial law will govern how your assets will be distributed. Rules vary from province to province, but no matter where you live, the law’s interpretation of where assets should go may not match yours.
Your lawyer should prepare your will, since it’s important that it be legally sound. But before talking to your lawyer, consult with a qualified financial consultant about how to best structure your assets to achieve your objectives and minimize taxes. You can also explore ways of reducing provincial probate fees, which are based on the value of your estate.
Here are some items to consider when formulating your will:
You are able to specify exact cash amounts, individual property or percentages of the value of your estate that should go to each beneficiary. Beneficiaries to consider could include your spouse, children, grandchildren and other relatives. You might also want to leave assets or money to charities, friends and associates. Include provisions for treasured possessions such as jewelry, art, fine furniture or other collectibles that you want to leave to specific individuals.
If you plan to leave your entire estate to your spouse, include instructions for distribution of your wealth should you and your spouse die at the same time.
Specify who you want to take care of your young children. Of course, this should be thoroughly discussed with your designated guardian(s) before drawing up the will. Appoint an executor (liquidator in Quebec). This is the person who will act on your behalf to settle the financial aspects of your estate. You can appoint family members, close associates or a professional executor such as a trust company or your lawyer.
If you own a business, the planning process will be more complex and will often require consultation with your accountant and other parties involved in the business. Your ability to dispose of your interest in the business my be restricted by agreements entered into with your partners or other shareholders.