When it comes to your estate, failing to prepare a will may save you legal fees now, but will ensure your estate pays extra costs after your passing.
Dying without a valid will is called “dying intestate,” and will create time-consuming procedures that must be done to wrap up your estate and will incur additional expenses after death.
The first concern is the closest one to my heart. Parents need a will to protect and guide their minor children.
A judge will decide on guardians. Without a valid will, you forfeit the right to decide who should look after minor children when you are gone. A judge will make this decision based on what he or she sees as being in the best interest of your children. When you tuck your children into bed, look at their trusting faces—they rely on you for all decisions based on their care. Can you imagine a stranger deciding on who will assume responsibility and choose the guardian for your children?
In your will name a guardian for your minor children. Carefully consider the right person to care for your children until they reach maturity. Always ask the guardians if they are willing to assume this role, as it is a huge responsibility. Hopefully you will never need a guardian for your children.
Provincial laws dictate who gets what. Each province has its own intestacy laws which will distribute your estate in the manner the government sees fit. Your estate does not automatically go to your spouse, especially if you have children.
Delays are a given. Dying without a valid will means the court will appoint an administrator of your estate. This takes time and will delay the distribution to your heirs, and can lead to family feuds. More than one or two family members may feel they are best suited for the administrator’s job, or perhaps no one will want the job. And it is a time consuming job.
Your will or your estate will pay more tax (lots more tax) when you die. Additional legal and accounting costs and probate fees have to be paid from the estate, resulting in a reduced estate value for your family.
Without a will, your wishes are unknown and your estate will be divided according to the courts discretion.
Have you discussed your final wishes for burial or cremation? A properly executed will ensures your final requests are honoured. An estate plan should be discussed with your certified financial planner. Seek legal advice in preparing a will from a notary or lawyer
Doreen Smith is a certified financial planner and life insurance broker with Capri Wealth Management Inc.