What Should I be Thinking About When I Make a Will?
By Jenna Lalani, BC Family Lawyer
A Last Will and Testament is a legal document that outlines your intentions in the event of your death, setting out what happens to your assets and how they will be allocated to your chosen beneficiaries. It covers many decisions including your funeral wishes, body remains, guardianship of your children, and what to do with any assets like businesses, property, and even digital assets like pictures saved through social media or on your computer.
If you die without a will, your property will be divided according to the specific laws and regulations in the province or territory where you primarily reside. It is important to understand that administering your estate without a will is often more expensive, with any extra costs being deducted directly from your estate. The government not only gets to enjoy a percentage of your estate (which may be a large amount when there isn’t a will in place), but they also decide what happens with your property. Having a will in place prevents an unfair distribution of assets, which are predetermined by the law.
This Make-a-Will week is the perfect opportunity to either prepare or update your will. There are several stages in life when it is a good idea to prepare your will – not just at old age – such as:
- Becoming a homeowner
- Having assets in your name
- Managing or owning a business
- Coming into an inheritance
- Getting married
- Having children
- Upon separation or divorce
- If you are named as a guardian tasked with the duty of caring for minor children
Who Should I Name as the Executor of My Will?
Choosing an executor is an important task as they will be responsible to carry out the instructions you have laid out in your will. Essentially, your executor serves as your proxy, managing your affairs as you would have. It is a big responsibility, and you want to ensure that your chosen executor is up for the task!
Your executor should be someone you trust to manage and distribute your assets and carry out your wishes as provided in your will. When choosing an executor, you want to be mindful of the following:
- Are they good with making decisions about money and assets?
- Do they have a business mindset or the ability to make choices that will benefit your estate?
- Do they have the capacity to manage your estate?
- Is this a burdening task on your chosen Executor?
What if My Spouse and I Disagree on a Guardian?
As a guardian of your children, you are responsible to appoint someone who will step in as their guardian, assuming the responsibility of raising your children should you pass away. If you and the other parent do not agree on a guardian, you can choose to have different guardians in your respective Wills and whoever is the last one standing will have the final say.
However, if the other parent has passed away or if you have sole guardianship, the choice of guardian is entirely in your hands. If the other parent predeceases you, their will takes effect, typically naming you as the guardian for your children. In this case, you would also have the authority to designate a new guardian in the event of your own passing.
While it might be tempting to surprise your chosen guardian with your decision, keep in mind that your children will need stability. An uninformed guardian might not be prepared to act quickly, leaving the children in a state of uncertainty. Communicating your choice of guardian ahead of time allows for better planning and smoother transitions.
What if I Am Named as a Guardian in a Will?
If you're named as a guardian in a will, it's up to you to decide whether you're prepared to take on this responsibility. Being designated doesn't mean you're obligated to accept. Usually, parents list alternative guardians in their will. So, if you decline for whatever reason, the next person on the list could step in.
If you do accept this responsibility, it is now your job to ensure that the children are properly taken care of - including establishing your own will, specifying a substitute guardian for the children in case something happens to you. Parents usually make provisions for their children's financial well-being, but these funds are often not accessible until the children reach legal age (usually 18 or 19 depending on the province in which you primarily reside). As a guardian, you may have limited access to the estate for the children's immediate needs. As parents appointing a guardian for their children, it's crucial to have a well-drafted will that includes explicit guidelines for the guardian's role and access to the estate.
Should I Name a Successor for My Business in my Will?
Understanding your business's articles of incorporation is essential when drafting your will. Consulting with a business lawyer will assist you in knowing how to structure your will effectively. If you have a business partner, you’ll need to decide whether they should inherit your share of the business or if it should go to your estate.
It would be beneficial to think about preparing a will when you are starting your business. This includes working alongside professionals to ensure the best tax result for your business as well as a smooth transition if something were to happen to you.
What if I Don’t Want to Leave Anything to My Spouse?
If you die without a will, your spouse and dependents automatically become the default beneficiaries. Excluding your spouse from your will is possible, but they can still make a claim to your estate under the Wills, Estates and Succession Act. Such claims can delay the process of probating your estate and can tie up your money until resolved.
If you wish to exclude your spouse from your will, it is important to specifically mention this exclusion and explain the reason. However, this is not guaranteed and remains up to a judge to decide. The best way to protect your estate is through a formal agreement like a pre-nuptial agreement or post-nuptial/marriage agreement, which can include a clause waiving your spouse’s right to your estate. Make sure any such agreement is drafted and signed with a lawyer to ensure your spouse fully understands the rights they are waiving.
Creating or updating a Last Will and Testament isn't just a task for 'one day' — it's a pivotal step in securing your legacy and safeguarding your loved ones. From choosing the right executor to designating guardians for your children and planning for your business, a comprehensive will can serve as your final act of care and responsibility. Don't let uncertainty cast a shadow over your estate or put your family's future at risk. This Make-a-Will week, seize the moment to gain professional advice and solidify your intentions. Schedule a complimentary 20-minute consultation with a Crossroads Law estate planning lawyer today and rest assured, knowing that you've done everything possible to avoid future legal complexities.
