Life is unpredictable. Sometimes events happen that leave us speechless, whether we have just won the lottery or one of our loved ones has suddenly passed away. With all of the unpredictability life has to offer, one of the things we can actually plan for is what happens after our death.
This can be done by executing a Will. When thinking about your Will, there are many things to consider including your family and friends, your financial situation, and how you want your assets dealt with after death. The emphasis on these considerations may be different from person to person and as such, this blog focuses on three “big picture” questions that you should consider when thinking about your Will.
It’s important to know that in Ontario, if a person dies without having executed a Will, they die intestate and their assets are divided pursuant to the Succession Law Reform Act.
- Who will be the executor of your estate?
An executor (often referred to as an estate trustee) is a person that you can appoint in your Will to administer your estate. In other words, this person is responsible for fulfilling the terms of your Will, including but not limited to determining the value of your estate, paying your debts from the assets of your estate (if any) and distributing the assets of your estate as directed in your Will.
When choosing the executor, among other things, think about who would be able to fulfill the terms of your Will and be willing to take on this responsibility. An executor can be a relative, friend, or even a trust company. You can also have more than one executor and appoint alternate executor(s) in the event that the person you wish to appoint as your first choice is unable to act as executor.
- Who will benefit from your estate?
There are many ways to distribute the assets of your estate, including among others, by way of a specific legacy, a trust, or the distribution of the residue of your estate.
You may want to consider gifting a specific item or specific amount of money to any person. For example, you can gift a specific amount of money (such as $10,000) to each of your grandchildren or gift your books to your best friend. You can also give a specific item or specific amount of money to a charity.
You may need to consider setting up a testamentary trust, especially in the event that you wish to gift money to a minor.
You may also wish to distribute the residue of your estate (which is the remainder of your estate once all debts, liabilities and specific gifts are distributed) to one or more beneficiaries. You can choose to distribute the residue to your family (such as your spouse, children, parents, siblings, etc.), to friends and even to charities. You can also decide how much goes to each person. For example, you can choose to divide 50% of the residue between your parents and divide the other 50% of the residue between your siblings.
How you wish to distribute your assets is up to you! Although, if you are not dividing your assets equally among the same class of beneficiaries (for example, if you want one child to receive more than the other), this may lead to tension and possible litigation.
- What will happen if there is a common accident?
One circumstance that you may not consider but should likely pay attention to is what will happen if there is a common accident. For example, imagine a situation where you want the residue to be distributed to your spouse and in the event that your spouse predeceases you or dies within 30 days of your death, you want the residue to be divided equally among your children. As sad as it is to think about, how do you want your assets distributed in the event that a common accident occurs which results in the death of your immediate family? It is strongly recommended that you consider how you want your assets to be distributed in situations like these, even though the chances of this happening are likely very slim.
The above-noted information is not legal advice and simply highlights a few, very general points to consider when you are thinking about preparing your Will. It is recommended that you obtain legal advice from a lawyer who specializes in drafting Wills, so that they may be able to answer all of your questions and take into consideration your specific circumstances when preparing your Will. Remember, what works for one person may not work for another!
Thank you for reading.