What steps to take when making a will

#Family and finance

Start shaping your legacy by learning about estate planning

You spend a lifetime growing your estate so you can leave a lasting legacy to your loved ones. It’s important to complete a will that details what this legacy will look like.

Dying without a will means others will be making key financial decisions about your property that may not represent your wishes. This can also result in increased costs and the time it will take to divide your assets.

A better solution is to create a will – the legal document that outlines the assets your loved ones will receive. Although this can be a complicated process, working with professionals (such as lawyers, or notaries in Quebec, accountants, or financial advisors) can help to lower your estate’s taxes and outline exactly how you would like to divide your assets.

Why hire a professional?

Do-it-yourself will kits may seem like a bargain, but the risks can outweigh the benefits. Issues that seem minor, such as the wrong choice of wording, or a failure to adhere to exact legal processes, can derail the best-laid plans. And, the slightest error can result in legal challenges.

Hiring an experienced lawyer or notary for your estate planning doesn’t have to cost a lot and is a worthwhile investment in your estate’s legacy.* You can ask a trusted lawyer, friend or financial advisor for a referral, or you can contact a provincial law society Opens a new website in a new window – most have a referral service, which also provides a free 30-minute consultation to help you choose the right lawyer or notary for your situation. These professionals have the expertise to create a will that helps assure your wishes are carried out in a way that can reduce taxes at death and beyond to help support future generations. A financial security advisor can assist you in choosing products to help you reach your financial goals while living and help ensure the loved ones you choose receive these assets after death.

* Fees will vary based on the complexity of estate settlement.
 

Making it easier for your loved ones

Here are some simple steps to help make the probate (estate administration) process (where applicable) less stressful:

  • Create an itemized list of your assets and debts.
  • Create a will that details who will receive your assets, along with other instructions about how you’d like your estate to be divided.
  • Choose your executor (liquidator in Quebec) and make sure they know where the original copy of your will is located, as well as other important documents (such as a list of your financial accounts, any deeds and any benefits for those who are eligible), along with instructions about who to contact to access them.
  • Consider purchasing a life insurance policy that can give your executor access to cash to pay for end-of-life expenses, such as a funeral or hiring a lawyer or notary.
  • Update your will if your financial or personal situation changes.

 

Making a will does not have to be scary or expensive.
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Things to consider before making your will

  • A will may not include joint assets such as bank accounts or a house. If joint assets are held with someone other than your spouse, ask your lawyer about a suitable way for you to transfer ownership.
  • Life insurance and registered retirement savings plan (RRSP) assets are typically not included in a will since they have a named beneficiary other than the estate (this process is different in Quebec if the RRSP is not issued by an insurer). Also, by naming a beneficiary, the death benefit proceeds are paid directly to the beneficiary and do not pass through the estate.
  • Executors can hire lawyers and other experts as needed and bill the estate directly. Executors may also charge fees for their services. The executors are also responsible for paying outstanding debts and expenses, such as real estate commissions on sold properties, so it is important to choose one you trust – typically a family member or close friend.
  • Courts may charge probate fees, if any, determined by province, to confirm the will and its executor. You can work with a tax and/or legal advisor to lower the value of the estate and its taxes by transferring ownership of an asset, adding a joint ownership ahead of time, or by giving out your gifts prior to death. Keep in mind; this may incur tax consequences for the recipient.
  • This is also the time to consider making charitable donations to causes and organizations that are important to you. Legacy giving is vital to sustain some charities, especially those doing specialized work that doesn’t gain widespread public support.
  • Do you have children? If your children are under 18 or 19 (depending on the province you live in), you should name guardians (or a tutor in Quebec) in the event both parents pass away. If you’re separated, you can name a guardian who can make financial decisions on a minor’s behalf (not applicable in Quebec).

Everyone’s situation is different but creating a will helps you to shape your legacy and decide how your assets can best support the people and causes that matter to you.