What do Bob Marley, Amy Winehouse, and Prince have in common? All three celebrities failed to leave written instructions about what should happen to their assets and likenesses once they were gone. The resulting bitter legal battles between family members and loved ones are a stark reminder of why having an up-to-date will is so important.
Over half of all Canadian adults don’t have a will—are you one of them?
A 2018 Angus Reid poll reported that 51% of Canadians don’t have a will. So, what is it that inhibits Canadians from taking the first step to setting up a will?
One of the primary reasons given for not having a will is that Canadians don’t want to think about their death. It’s only natural—no one wants to think about their demise. But without a will, you give your province of residence free reign to determine how your assets get divided once you’ve passed on. As a result, significant people in your life may be excluded from receiving any proceeds from your estate. Worse yet, assets may go to unintended beneficiaries or be depleted by probate fees.
Many people also mistakenly think that creating a will is costly. There are two main ways to set up a will: you can do it yourself, or you can hire a lawyer. The do-it-yourself option is less costly and quicker than hiring a lawyer, and there are numerous viable options available online. It’s recommended you do your due diligence to find the right solution for you and the family. Costs can range from 40 to 90 dollars. After creating the document, all that’s needed is to print and sign it, with witnesses present.
If you choose to solicit a lawyer, the cost can vary between firms. Our family chose a law firm back in 2014, and the total bill came close to 500 dollars. If this is the route you prefer, making plans to save enough money to cover the fees is well worth the effort.
Looking out for what’s important to you
Another common misbelief is that only the elderly or wealthy need wills, but that’s not true. When our family set up a will, all we had to our name was a home, a car, two insurance policies and a pension plan. Our main priority was to make sure it was clear who would inherit our assets, and whom we wanted as a guardian and contingent (or next-in-line) guardian to our one-year-old.
You may also want to consider creating powers of attorney when setting up your will. There are two types you can name—personal care and property. A power of attorney for personal care authorizes someone else to make health care decisions if you become incapacitated. A power of attorney for property allows someone else to decide financial matters— like paying your bills or receiving pension income—if you become mentally or physically incompetent.
Getting Started
In preparation for setting up your will, you’ll want to log an inventory of your assets, including your real estate, money, investments, and personal and household belongings. Next, prepare a list of beneficiaries to determine how your assets should be divided. Be as specific as possible when naming beneficiaries, stating the person’s full name and their relationship to you.
You will also want to choose an executor who will oversee the following:
- Safeguarding your estate
- Gathering your assets
- Paying your debts
- Dividing your estate among your beneficiaries
After you’ve completed your will, you’ll want to make sure to review it every few years, or if you have a life-changing event, such as a new addition to your family, a marriage, death of a beneficiary, or a significant move. When changes occur, you can amend your existing will, or draw up a new one.
At its core, setting up a will is about ensuring that your family is looked after, and your wishes are carried out. A will gives you peace of mind, knowing that your wishes will be met, and any possible conflicts over your estate will be avoided.
For more information, contact the Cowan Financial Services team at 519-651-6660 or 1-877-899-2194, email: wealthmanagement@cowangroup.ca.
