I’m sure we all heard of the horrific van attack in Toronto a couple weeks ago. Can you imagine the pain and frustration the families of those victims must be feeling right now?
This hit me extra hard since I was scheduled to be in that area two days after the incident. What if I were there on that day, just enjoying the nice weather before my meeting? What if you were there?
This is of course one extreme example, and I use it to remind us (myself included) that life is so extremely precious. However, this got me thinking about something most people overlook in their financial planning process: the importance of having a will.
In fact, according to a recent Angus Reid Institute poll, approximately 51% of Canadians do not have a will in place. Here are the main reasons why:
WHY HAVE A WILL?
Your will is a legal document that determines how the assets in your estate are distributed after you pass away. You choose who gets what, regardless of whether the person is related to you or not.
Remember the story about the lady who left all her money to her dog?
As business owners, it is especially important to have a will. Perhaps you have multiple children but think only one of them would be capable of taking over your role in the business, while the others remain shareholders. Perhaps you would prefer if your business was sold and the proceeds divided amongst your next of kin. These instructions can be specified in your will.
You can also include your final wishes to ease the burden of having your grieving family try to figure out if you wanted to be buried instead of cremated, or whether you liked carnations more than roses!
Personally, I’ve chosen to have my organs donated, followed by a cremation, then have my ashes converted into a diamond family heirloom. Hey, why not be nice and shiny forever?
WHAT HAPPENS IF YOU DON’T HAVE A WILL?
Someone who passes away without a will is said to have died “intestate” and the provincial government determines what to do with the assets. In Ontario, the Succession Law Reform Act is used to figure out who receives proceeds from your estate, and how much.
Usually your surviving spouse will receive most of your assets, but it’s important to note that a common-law spouse may not be eligible to do so, depending on which province you live in.
Having step-children or adopted children adds a layer of complexity too, as well as having no immediate relatives.
In addition, it gets messy if your next of kin doesn’t reside in Canada – I remember a case where a single mother passed away of a heart attack and unfortunately didn’t have a will that specified a guardian for her young children. She didn’t have any Canadian relatives and the government couldn’t legally allow her children to leave the country, so the kids were put into foster care.
HOW CAN YOU CREATE A WILL?
It’s best to seek professional legal advice from an estate lawyer for your will, especially if you have multiple sources of assets (e.g. investment properties, business income, investments outside Canada). You will have to pay legal fees for this, but wouldn’t it be worth the peace of mind?
For myself, I have a funeral concierge service combined with one of my life insurance plans, which allows me to pre-plan my final wishes. It also includes a will preparation system and online storage for important documents my beneficiaries will have access to (e.g. SIN document, passport, driver’s license, bank account numbers, insurance policies and even details for my social media accounts).
If you have a relatively straightforward estate plan, there are also many different cost-effective options available, like DIY kits available at Staples and Chapters.
Still sounds overwhelming? A good start is to just have a discussion with your loved ones about what would happen if you were no longer around.
I’d love to hear what worked for you!
For more information on making a will: https://www.canada.ca/en/financial-consumer-agency/services/estate-planning/will-estate-planning.html
Kim Lowrie is an insurance agent and mutual fund representative with World Financial Group.
She and her husband have made it their lifelong mission to help families, individuals and business owners succeed financially.
To find a solution that best fits your needs and goals, connect with Kim: