Five reasons every Canadian should make a (legally valid) Will
As a lawyer who formerly specialized in advising clients about estate planning, I’ve seen firsthand how important it is for Canadians to make a Will. Whether it’s to maximize the estate you leave behind for the next generation, or to make sure your wishes are carried out the way you planned, making a Will is vital. Despite this, over half of Canadians do not have a Will![i] That’s why I take the opportunity in November to mark Ontario’s “Make a Will Month” and to promote this crucial aspect of estate planning to advisors, friends and colleagues.
No matter what stage of life you’re at, or how far along you are in your financial planning, you should have a Will to make sure that you are looking after those you are leaving behind. There are many great reasons to make a Will, far more than I have room to go over in this post, but here are my top five reasons every adult should make a (legally valid) Will:
Having a Will provides peace of mind
When I was in private practice, clients would often tell me how relieved they felt after completing the estate planning process. Not documenting your wishes or making preparations for loved ones in the event of an unexpected death leaves many with feelings of uneasiness and concern. Ensuring your estate planning is complete and your affairs are in order provides peace of mind for the present and a more certain future.
Having a Will means your wishes will be documented
The legal term for dying without a Will is to die “intestate”. What it means in practice is that you lose the ability to choose who you can leave your assets to. In Canada, not having a Will at death limits those who will inherit your estate to your spouse, biological and adopted children. If you want to leave a gift to a charity, extended family members (if at death you have a spouse or biological/adopted children) or to friends, you can’t do that without a Will.
Having a Will may offer tax advantages
One of the reasons people make a Will is to transfer estate assets in the most tax-efficient way possible. Having an estate plan, including a Will, may reduce income and probate taxes at death. For entrepreneurs and business owners, taking advantage of tax planning opportunities can be particularly important in achieving business succession and other estate planning goals.
Having a Will helps you put your financial house in order
Making a Will provides a great opportunity to ensure your financial house is in order. Things like the title to your properties and the beneficiaries named on your registered accounts (RRSPs, TFSAs, etc.) and insurance policies should be checked regularly to ensure they are up to date and reflect your current wishes. It’s also an opportunity to confirm that you’ve accounted for final expenses like taxes, legal fees and funeral costs. This is where adequate life insurance coverage with a guaranteed, tax-free benefit could ensure you cover these oft-overlooked expenses.
Having a Will and powers of attorney let you plan for a time when you may no longer be able to make decisions
Although we are focusing on Wills, it is also important to have powers of attorney. Wills and Estates lawyers will generally recommend signing powers of attorney in addition to making a Will because they provide direction regarding financial and personal care decisions if you become incapacitated during your lifetime. A Will is important because it provides direction regarding the distribution of assets upon death. Powers of Attorney are necessary when decisions need to be made while a person is alive but incapable of making them. Advances in healthcare and medical treatments mean we are living longer lives; however, the quality of life may be impacted by key decisions made late in life. Accordingly, it is important to appoint others whom we trust to make those decisions when we can’t.
As you can see, there are many great reasons to make a Will and to start estate planning early. It is always better to be proactive and not put off this important aspect of financial planning.
You should seek professional help when making a Will. Your lawyer is best qualified to help you with your estate planning. Your financial advisor can assist by ensuring that your financial planning strategies align with your Will instructions, which may in turn help to minimize tax or probate fees upon death.
Additional resources:
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The information in this document is for general information purposes only. Please seek professional advice before making any decision.
This blog reflects the views of the author as of the date stated. This information should not be considered a recommendation to buy or sell nor should it be relied upon as investment, tax or legal advice. Empire Life and its affiliates does not warrant or make any representations regarding the use or the results of the information contained herein in terms of its correctness, accuracy, timeliness, reliability, or otherwise, and does not accept any responsibility for any loss or damage that results from its use.
November 2021
[i] Source: Angus Reid Institute, 2018.
