Did you know that greater than half of adults in Ontario do not have legal Will? November is traditionally called “Make a Will Month”, with the goal of bringing awareness to the importance of having a Will, and of making a Will with the assistance of a lawyer.
Having a Will allows you to leave an organized estate for your loved ones. Having an organized estate means that you can ensure that your family members, friends or other important people in your life are taken care of when you die. Making a professionally prepared Will with an estates lawyer is an investment, but it is arguably one of the most valuable investments you can make. After all, it protects your loved ones and your assets.
All adults should, ideally, have a Will. However, there are a number of life events that often compel a person to make a Will. These include marriage, the birth of children, separation from a spouse, the acquisition of real property or other assets, ownership of a business, obtaining collectibles or valuable personal property, and receiving an inheritance.
When somebody dies without having a valid Will in Ontario, he or she is considered to be “intestate”, and his or her assets are distributed according to the laws of intestacy, which are set out in the Succession Law Reform Act (“SLRA”). The SLRA also sets out the rules for determining who is permitted to apply to administer the estate. These laws may not result in the distribution that a person assumes they will, and family members of persons who die intestate are often unpleasantly surprised to learn how an estate is distributed under such circumstances. This can cause family members additional stress during an already stressful time.
In terms of distribution, the SLRA legislates different scenarios based on the circumstances of the deceased’s family. For example, there are different scenarios for people with and without spouses, and with and without children. Many couples are taken aback when they learn that a spouse does not necessarily receive 100% of their partner’s estate. Where the couple has children, the estate is divided between the surviving spouse and the children, with the spouse receiving an extra amount representing a “preferential share” of the estate. This could result in children receiving a large inheritance at a very young age. Where a child is under the age of majority, the Office of the Children’s Lawyer needs to be notified, and that inheritance is required to be paid into a Court trust. This may not be ideal for either the child or for the surviving parent. A Will can allow a parent to control when and how a child receives his or her inheritance and appoint a trusted family member to manage the funds for the child.
The SLRA also sets out the persons who are entitled to apply to act as the deceased’s executor or “estate trustee”. Another benefit to having a properly drafted Will is that the testator may select the person they feel is best to handle the administration of their estate. In addition, an Ontario-resident executor named in a Will generally will not be required to post security in order to administer the assets of the estate. On the other hand, where a person dies without a Will, the court will often require an applicant for appointment as an estate trustee to post security in order to act. The process of appointment of an estate trustee without a will also generally takes longer and can be more costly.
Finally, a carefully considered Will plan created through consultation with a lawyer may also allow a person to structure their assets in manner that minimizes tax payments on their death.
If having a Will is important for ensuring that your family members are looked after following your death, Powers of Attorney are essential because they permit others to look after you during your lifetime, should you become unable to look after yourself. There are two Power of Attorney documents. The first is a Continuing Power of Attorney for Property. The person appointed to be your “attorney” under this document is able to make financial and legal decisions with respect to your property, if you cannot do so yourself. The second is a Power of Attorney for Personal Care. Your attorney for personal care is authorized to make care-related decisions on your behalf, including decisions regarding your medical treatment.
That’s great! Nothing makes us happier than to hear you’ve got a Will and Powers of Attorney in place.
In that case, please consider every November a good time to review your estate planning documents. Although time alone does not invalidate a Will, as time goes on and family situations and assets change, we recommend that you periodically review your documents to ensure that they still reflect your wishes.
In sum, it’s important to plan for tomorrow so you can live for today! If you would like to speak with someone about will planning, please contact one of our estates lawyers.
The foregoing should not be considered to be legal advice and should not be relied upon as such. Please consult a lawyer to get advice and an opinion on your unique circumstances.