POSTED December 1, 2022
5 reasons you need a Will (including when to get professional help)
Have you put preparing a Will on your “to-do” list but not made it a priority? You are not alone. Yet, planning early is the best thing you can do for your family and beneficiaries. To help motivate you, we have compiled a list of five reasons you need a Will (or need to update an existing one).
1. You can appoint an appropriate executor of your estate
Having a Will allows you to name the person or people most suited to be executor(s) of your estate. The executor is responsible for handling all aspects of your estate — from funeral arrangements to paying debts, liabilities and taxes, communicating with beneficiaries and distributing estate assets.
Making it clear who the executor (or alternate) is can avoid potential disputes and disagreements among your loved ones about who should assume the responsibility. If you do not know anyone suitable for the role, you can consider naming a trust company.
2. Reduce or defer taxes
You have likely heard the saying “nothing is certain in life except death and taxes.” Having a Will helps you address both. Generally, estate planning focuses on efficient and effective tax planning to ensure your beneficiaries receive as much of your estate as possible.
There are various ways to reduce and defer income tax and reduce (sometimes eliminate) probate fees (which are payable in some, but not all, provinces).
If you are a U.S. person, own property outside of the province you live or have beneficiaries located outside the country, it is important to work with an estate planning advisor. The advisor will address potential tax issues (both Canadian taxes and taxes in the jurisdiction where the property and/or beneficiary is located).
3. Determine who benefits from your estate
Having a Will allows you to define who will benefit from your estate. This can include family members, charities, friends, et cetera.
When someone dies without a Will, their estate is distributed according to the rules of intestacy set out in the province’s relevant legislation. Generally, the legislation is arbitrary and inflexible. Since it is pre-determined, it has the potential to benefit the wrong people, at the wrong time.
When someone dies without a Will, the administration of the estate is often more costly and time-consuming than when there is a properly drafted Will (even if the affairs and family situation are fairly uncomplicated).
4. Plan for minor beneficiaries
Not surprisingly, many people want their young children or grandchildren to benefit from their estate. However, gifting to a young person can be complicated. Preparing a Will with a lawyer allows the testator (a person who dies with a Will) to carefully direct money to a minor, particularly through a trust established within the Will.
Without a Will, the minor’s inheritance is usually paid into court and released when he/she reaches the age of majority. Most people think the age of majority in their province is too young for someone to receive a significant inheritance.
For parents of young children, a Will allows you to appoint temporary guardians and set out specific wishes or directions about the children’s upbringing. In some provinces, this can only be achieved through a Will.
5. Provide for charitable giving
Many people wish to include charitable giving in their estate plan. Charitable giving on your death is only possible if you plan ahead.
Charitable giving as part of a properly structured and executed estate plan can allow you to optimize income taxes triggered on death and ensure your preferred organizations and causes benefit.
It is important to have an updated, properly structured and executed estate plan to ensure your final wishes are carried out — and to simplify administration of your affairs after your death.
Did you miss the Ask a lawyer estate planning webinar led by Lucy and Lori? It is not too late to learn more from these experts. Watch the recording from the Children Believe virtual event now.
ABOUT CHILDREN BELIEVE:
Children Believe works globally to empower children to dream fearlessly, stand up for what they believe in — and be heard. For 60+ years, we’ve brought together brave young dreamers, caring supporters and partners, and unabashed idealists. Together, we’re driven by a common belief: creating access to education — inside and outside of classrooms — is the most powerful tool children can use to change their world.
About ChildFund Alliance:
A member of ChildFund Alliance, Children Believe is part of a global network of child-focused development organizations working to create opportunities for children and youth, their families and communities. ChildFund helps nearly 23-million children and their families in 70 countries overcome poverty and underlying conditions that prevent children from achieving their full potential. We work to end violence against children; provide expertise in emergencies and disasters to ease the harmful impact on children and their communities; and engage children and youth to create lasting change and elevate their voices in decisions that affect their lives.