If you own property of any kind, you need a will to set out your wishes with respect to how your property should be distributed when you pass on. A will is a key legal document ensuring your wishes are carried out.
Without a will, your estate (upon death) may be in limbo until either the government or a person (not necessarily someone you would choose) is appointed as estate trustee to look after your assets. This may result in delays, further expenses and/or other complications. A Will can also set out your wishes for your children/dependants instead of leaving that decision solely to the court's discretion.
WILL vs. ESTATE PLANNING
When wills are being done in our law office, we focus strictly on methods of distribution of whatever assets you own at the time of death.
No one can predict the future regarding whether one might end up (at the time of death) with $1Million or $1 in net assets. An example of a typical formula for distribution of assets by a husband and wife (married for the first time) with 2 children would be that each spouse leaves everything to the other spouse, but if both die (for example, in a common accident), all assets are left to children in equal shares to be held in trust for such children until they reach an age specified by you (we normally recommend age 21). Until such age, the trustee(s) (named by you) can use funds for the education, health and welfare of children.
Note : Of course, you can develop your own formula for distribution of assets since the above-mentioned formula is only an example. Wills can be changed any time (before death, of course).
PROTECTION AT A MINIMAL COST
You should consider preparing a will. It is normal for people to delay in preparing a will; however, the fee (charged by our law office) is very small in comparison to the additional costs that can be incurred in administering an estate where there is no will. When doing a will, it is usual that one should also sign a Power of Attorney to deal with a mental or physical incapacity in case of a serious illness or accident for such Power of Attorney.
WILL NOTES (beware!)
- A will that has been totally handwritten and signed by the deceased (no typed or pre-printed sections or paragraphs) is valid in Ontario.
- A will done by way of a video is NOT valid in Ontario.
- A surviving spouse (if there is no will) in Ontario is entitled to the first $200,000.00 of estate assets and any amount over $200,000.00 is shared equally between surviving spouse and surviving children.
- A common law spouse (including same sex partner) does not have the same rights to share in the assets of the deceased (where there was no will) as a married spouse (under note 3 above). To make sure that a common law spouse (or unmarried same sex partner) receives property after death, a will must exist.
- A power of attorney (given prior to death) is useless garbage after death since the power of attorney automatically terminates upon death. A will only becomes effective upon death, at which time an existing will replaces any power of attorney.
- Naming a spouse or children as a beneficiary on an insurance policy or RRSP can save probate costs and taxes.
- Joint ownership of property to avoid probate costs is not always advisable if one loses control over dealing with the asset during one's lifetime. Current probate costs are only ½ of 1% on the first $50,000.00 of the estate and 1.5% on the balance ($1,500.00 probate cost for each $100,000.00 of estate assets over the first $50,000.00).
- While a divorce or separation will not affect the validity of a will, a marriage (after a will was made) will invalidate any will made prior to the marriage (unless the will specifically states that the will was made in contemplation of the future marriage). Once separated or divorced, unless a will is revised, a separated or former spouse can still receive estate assets if the will (which existed prior to the divorce or separation) was not changed.
- A properly witnessed Will requires both witnesses to be present AT THE SAME TIME when the deceased signed the will. The two witnesses cannot be individually witnessing the signature of the deceased at different times.
TO REQUEST A WILL AND/OR POWER OF ATTORNEY