July 15, 2019
Will or no Will?
A simple question that one may struggle to answer with confidence and certainty. If this question does not elicit thought in your mind, you must embrace uncertainty. Much like weather in Vancouver. Or the stock market. However, for those who are on the verge of major personal and financial life changes or those who have worked hard to build their personal legacy and want to preserve it, let’s start the conversation by saying, “I can make a Will.”
The basic requirements for me to make a Will are as follows: “I can or know someone who can write or type. I am at least 16 years old. I have two friends out of my many friends on Facebook or LinkedIn who are at least 19 years old that I can call upon to sign as witnesses in my presence. I have sound mental capacity such that I know a Will is a death document and I know what my assets are.”
So what is the big deal and why doesn’t everyone have one? To dig deeper into a recent poll conducted by the Angus Reid Institute, it was found that 51% of Canadians do not have a will. In other words, less than half of Canadians (49%) are leaving their families prepared when they pass away. I make no promises that further complex mathematical calculations will appear in this post.
That being said, you are not too early nor too late to get started. As a matter of fact, by spending time reading this post, you are already on the path to estate planning. By stumbling upon here, something in your consciousness is telling you, “You invest in your personal health and finances, why not invest in your legacy?”
What exactly is a Will? From a theoretical perspective, a Will is your vehicle and you are behind the steering wheel. You determine the location, you set the speed, and best of all, one fill at the pump or charge can last you many years.
But what if we don’t have a Will? Riding on my car analogy one last time, let’s put on a VR headset and visualize the scenario where you are sitting in the passenger seat of your cousin or friend’s car who drives like a maniac (everyone has one). You pray that you will survive the car ride and your mind naturally enters survival mode as you contemplate the likelihood of death and the consequences that will follow: “Who will get my house? Take care of my belongings? Pay off my debts? Get access to my personal bitcoin account? Who is going to tell my dog he’s a good boy?”
With no Will in place when we pass, we are back to mathematical calculations which we thought we left behind in high school. In other words, your estate is divided according to a fairly perplexing legislative formula as follows:
- If you leave only a spouse= your estate passes all to your spouse;
- If you leave a spouse and children, and the children are both yours and the spouse’s= your spouse gets the first $300,000 value of your estate, and if there is any remaining, half of the balance goes to your spouse, and the other half is divided among your children; and
- If you leave a blended family, well you have a very unique situation on your hands. If you have a spouse but the children are from a previous relationship, your spouse gets the first $150,000 value of your estate, and again, if there is any remaining, half of the balance goes to your spouse, and the other half is divided among your children.
In a nutshell, your assets first goes to your spouse. If you have kids, part to your spouse, part to your kids. If no spouse, to your kids. If no kids, to your parents. If no parents, to your brothers and sisters. If no siblings, to your grandparents, etc.
I know what you are thinking. What is my ‘estate’? What compromises my ‘assets’? This is too much information, time to stop reading and grab a snack or go my phone.
I promise we are almost done.
On the other hand, having a Will in place gives you control over your legacy. At minimum, it permits you to:
- Appoint an executor/trustee (someone you trust to manage your affairs);
- Appoint a guardian for any minor children you have;
- Distribute your estate in the amounts and to the persons or charitable organizations you wish rather than the confusing formula above; and
- Set up trust(s) to protect vulnerable beneficiaries to preserve benefits.
Hence, I merely hope this sparks the conversation in your mind to engage with personal planning for your estate. As a word of caution, as simple as a Will sounds to make, it is best to be diligent and to obtain proper guidance and legal advice from a Wills practitioner before undertaking this task to avoid potential drafting problems and/or liability.
Should you want to take the next step to personal and financial security and begin your estate planning, please do not hesitate to reach out to our firm as we are more than happy to continue this dialogue and come on a ride with you.
As the saying goes, the only certainties in life are ‘death and taxes’. My advice is it is never too early to get ahead of these two certainties.
By Edward T. Ngo, Associate