For many people, writing a will is already difficult. Imagine it has to be changed!
According to a study by the Financial Consumer Agency of Canada (FCAC), almost half of Canadians (45%) do not have a will. On the other hand, 92% of seniors have one, compared to 22% of those under 35.
It is understandable. In the prime of our lives we rarely think about our own death! However, a will is a kind of last will insurance for those who have a minimum amount of assets. Especially for young (or not so young) parents.
Discord without a will can be traumatic for your descendants (for example, the case of the singer Prince). Worse still, even a will that is poorly adapted to your reality can lead to disputes, as demonstrated by that of the painter Jean Paul Riopelle, which led to a long conflict over his inheritance worth tens of millions of dollars.
If you haven’t updated your will, rest easy: 53% of seniors haven’t done so in five years, according to FCAC.
For what ?
Above all, a will reflects your values. It should also emphasize your sense of fairness. And most importantly, your current personal and financial reality.
You must therefore update your will if your reality has changed: you are now living as a couple or have separated, you have children, grandchildren, you have won the lottery, you have been promoted, you are retiring, you are making an advance Your children or grandchildren for their studies or because they are buying a property, etc.
Certain family situations complicate your desire to have children from a new relationship, for example, if you have children from a previous relationship.
However, many people overestimate what they will leave to their heirs or hope to resolve family disputes. Mistake. Others create a list of assets that often no longer exist at the time of death, neglecting the tax consequences.
You also need to “plan for the unforeseeable,” such as the death of your trustee or the fact that you outlive one or more of your legatees. Some people believe that a divorce or separation invalidates the will: this is false. Others are co-owners of an asset, such as a house: it is your co-owner who takes the risk of inheriting, not your estate.
On the other hand, treating your heirs fairly does not automatically lead to an equal distribution of your assets. Some may benefit from life insurance, while others may make investments. You must consider the personal situation of each of your heirs: do they work or study, do they have financial or health problems, who will be the guardian of your minor children?
Advice
- You don’t change your will the morning your new flame moves in or the day after a breakup. A delay of a few months makes more sense.
- We avoid recording crazy or frivolous decisions in our will, such as leaving important assets to our dog or… our owner. Or denying an inheritance to a tattooed person or demanding that they obtain a diploma. Such situations still occur frequently; Some notaries refuse to do this for professional or ethical reasons.
- Be transparent with your loved ones: Disclose the key points of your will to your heirs to avoid possible shocks after your death.
- Many wills contain mathematical errors: check your numbers!
- Avoid using wills purchased online and work with a notary and tax advisor, especially if your assets exceed tens of thousands of dollars (or if you own a vacation home, insurance policies, RRSPs, or important investments). Create an accurate list of your assets and keep it updated.
- Heirs often fight over assets that have little financial value but high moral value. Create a list and an accurate distribution by consulting your heirs while they are still alive.
- If your estate is already in dispute during your lifetime, appoint a neutral insolvency administrator (financial institution, notary, friend). Make sure you get their consent and plan for compensation.
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