A valid Will is an important document for all adults. While the need for this document is widely accepted, its creation is commonly overlooked. It is ideal for your Will to be prepared within the context of an overall estate plan.
Why do you need a Will?
If you die without a valid Will or your Will cannot be located you are considered to have died intestate. This means your estate will generally be administered under provincial legislation. All provinces have laws governing how your property will be distributed if you do not leave a Will. Your property would generally be distributed to your next closest surviving relatives; assets go first to your spouse, then children, and then more distant relatives. If you do not have any living relatives and no Will then your property would be escheated to the government. Your Will is one way to ensure your property will be distributed according your wishes.
For consideration when planning your Will
A Will requires careful planning to ensure all aspects of your estate plan are covered. You will want to consider:
Identification and Revocation Clause – This clause contains your name and address, declares the Will as your last, and revokes all prior Wills
Appointment of an Executor – Called an “estate trustee with a Will” in Ontario this is the person, institution, or trust company you name in your Will to be responsible for administrating your estate. In Ontario, your estate trustee can be held liable for mistakes made while administering your estate.
Payments of debts, taxes, and fees – Generally your debts and taxes are paid off before any assets are distributed to your beneficiaries.
Beneficiary designations – While some savings accounts will allow for a specific beneficiary it is important to indicate who you would like your assets to go to and in what percentages.
Specific bequests – You may have specific items such as jewelry, artwork, family heirlooms etc. which you would like to go to named individuals.
Legacies – You may also wish to leave lasting legacy through a cash gift from your estate to an organization.
Residual estate – The residue clause outlines the distribution of your remaining estate after expenses, debts, bequests, and legacies have been handled.
Testamentary trusts – These are trusts created by a Will and can have numerous uses in your estate plan including benefiting a minor, persons with disabilities, or retaining assets for a future generation.
Gifts to minors – Funds left a minor in a Will cannot be paid directly to the minor and provisions should be made to hold the funds until the person is of the age of majority.
There are many potential additional clauses for consideration including power clauses, Life interests, Family disaster clauses, Business interests, Guardians, and burial instructions or organ donations.
A Will is an integral component of your estate plan and is not something to be put off for a later day. If you do not presently have a Will or have not reviewed it recently, consider taking steps to draft one soon.
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This article is for information purposes only. Please consult with a professional before taking any action based on information in this article.
This information is not intended as nor does it constitute tax or legal advice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ®Registered trademarks of Royal Bank of Canada. Used under licence. ©2018 RBC Dominion Securities Inc. All rights reserved.