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 Your Money
Matters
December
2010 Issue
Wills – If you don’t think you need one, think again
A
will is an essential part of an estate plan. It is a formal document
that sets out your intentions on how your assets are to be
distributed after your death. It also allows you to designate the
person(s) you wish to take care of your children should both you and
your spouse pass away. It allows you – and not the government – to
determine how the assets you have worked hard to accumulate will be
distributed upon your death.
More
specifically, the will designates the person or institution known as
the ‘executor”, who will administer your financial affairs after
death, specifies beneficiaries to whom the assets are to be
distributed and articulates when and how the distributions are to be
made.
Having a well-drafted will can minimize the cost and delays of
administering your estate, decrease or postpone taxes, and reduce
the complex and time-consuming financial issues your family would
otherwise have to deal with. It is prudent to establish a will early
in file – after purchasing your first home, for example, or
immediately upon marriage or the birth of your first child.
If
you don’t have a will or your will is deemed to be invalid, you will
be deemed to have died intestate. The court will then appoint
someone to administer and distribute your estate according to the
intestacy laws of the province in which you reside, regardless of
what your wishes are. Under intestacy laws, your spouse will usually
receive a certain amount of your estate, often known as the
“preferential share’, and the remainder will be divided among your
children. Intestacy may also result in more taxes being paid,
resulting in less money for your family. The distribution of assets
is often much slower and more expensive with intestacies, which can
make the whole process frustrating for your loved ones at a time
when they are already grieving your loss.
Preparing a will involves several steps:
-
Make a list of your assets. Include your home, car, cottage,
business interests, life insurance, investments, etc.
-
Consider how your estate will be divided and who will get what.
-
Choose an executor for your estate. The executor has to protect
and administer your estate in a prudent and responsible manner.
This person should be trustworthy, familiar with tax, estate,
accounting and investment issues, and willing and able to assume
such a responsibility.
-
Decide who you want to take care of your children should you and
your spouse pass away. When deciding who to select, keep in mind
the age of the guardian(s), their health and their ability to care
for your children.
Once you have prepared your will, you must remember to keep it
updated. You should review your will regularly and amend it
whenever there is a significant event in your life or the
lives of your heirs, such as a marriage, divorce, birth,
death, disability or new business.
A will is the foundation of an estate plan The goal of having
a properly drafted will is to ensure your assets will be
distributed according to your wishes and that your loved ones
will be properly provided for in a tax-efficient manner. By
creating a will, you can avoid unnecessary costs, delays and
the undesirable results of intestacy. When you consider that
most wills can be prepared for a few hundred dollars, and also
take into account the potential consequences of not having
one, it is clear that everyone should have a will.
Theresa Wever and the Money
Concepts Team.
Commissions, trailing commissions, management fee and expenses all
may be associated with mutual fund investments. Please read the
prospectus before investing. Mutual funds are not guaranteed,
their values change frequently and past performance may not be
repeated. |
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