Nobody wants to speak about death, especially with your own family. We all know that death is inevitable, yet many tip-toe around reality. This is understandable, as death can be a daunting stage in life. Planning is very important regarding the end of your life.
Unfortunately, life doesn’t wait for anyone, and we cannot always plan for the picture perfect future. This is why a will is so crucial. You may avoid this subject, as it’s not always the most positive area. However, those who fail to make a Will, can put their loved ones at financial risk.
There have been multiple surveys conducted, which yield some shocking results. Within one survey, it was found that 56% of Canadians do not have a Will. Of these individuals, 29% said they do not have a will because they don’t know how to start one, or think they can’t afford one.
It was also found that 88% of Canadian citizens who were between the ages of 27 and 34, do not have a Will. They simply believe that they’re too wrong, which is a common belief. Once again, you cannot plan for what’s around the corner. If you have three young children at home, it’s important that you create a will for their sake.
What Happens If I Don’t Have a Will?
Many believe that when they pass, their assets automatically go to their family. Not only is this untrue, it can cause a wide variety of issues and frustrations. When you pass without a will, you’re said to die ‘intestate.’ Basically, the Intestate Succession Act governs your estate.
When this occurs, you have no say about your beneficiaries or even who your children will go to. You’re leaving your finances and estate in the governments hands. Your property will more than likely be given to family, but it isn’t always this black and white.
Each province varies, but you may pay more taxes without a Will. If you leave all your assets to your spouse for instance, you can defer taxes. If you die intestate, you could owe taxes. If you had a Will, these taxes would be avoided. Legals fees are also often deducted. There are also delays, which can be frustrating for family members. This is why a Will is so crucial; give yourself peace of mind.
If you die without a Will, this is how your property will be distributed:
- If you have a spouse, but no children, your spouse will inherit everything. If you are in a common-law relationship, your partner may get nothing.
- If you have both a spouse and children, your spouse gets up to $200,000 of your assets. This is known as a preferential share. The remaining is called the residue, and is divided between your spouse and children. This will be shared equally amongst your spouse and each child.
- If you do not have a spouse or children, your parents will receive your assets.
- If you do not have any parents, a spouse, or children, then your siblings divide assets.
- If you do not have any siblings either, your nieces and nephews will inherit your assets.
- If you do not have any nieces and nephews, then your next kin will receive your assets.
- If you have no family, your estate will go to the government.
What Can I Do to Cut the Cost?
You do not want to cut corners regarding the legal aspects of your will. This is a very important document and should be treated accordingly. Costs vary, but your lawyer will typically charge you for the time and work involved.
The key is coming to your lawyer prepared; make sure you have everything. The less work your lawyer needs to do, the more you’re likely to save. The following checklist will help you get prepared.
- Bring a list of all your family members. Include their full name, contact information, and relation to you. As well, include the ages of your children (this includes stepchildren).
- The names and contact details of anyone else you’d like to include, that is not your family.
- A list of your assets; home, car, personal items, investments, etc.
- Insurance policies you have, who are the beneficiaries?
- Details regarding your RRSPs and pensions.
- Documents to show the names of anyone who is on the title of your house or estate.
- Details regarding any businesses you own, are you in partnership with anyone?
- Court orders or agreements regarding the custody of your children.
- The person who you’d like to appoint as the executor. This is the individual that will pay off your debts and distribute the remaining money amongst beneficiaries.
Where Can I Find Out More?
If you have any questions, you can seek some professional advice at any time. The Government of Canada provides information at the following website: www.seniors.gc.ca. You can also go to your local Service Canada office for more information.
photo credit: Ken_Mayer via photopin cc
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