“I can’t believe I haven’t done my Will yet! This is well overdue!” – It is not unusual for someone to say these things to me at the beginning of our first meeting to plan their Wills (and Powers of Attorney for Property and Personal Care).
According to a new Angus Reid Institute poll, people cite a number of reasons for not having a Will in place – some examples include being too young to worry about it, not wanting to think about death, and not wanting to discuss these details with a stranger. That said, there are many reasons (including the list that follows) why an individual may be encouraged to have a Will drafted. It must be noted that the following is not an exhaustive list of reasons to have a Will; rather, it is a quick review of some of the benefits of meeting with an estate planning lawyer to prepare and execute a Will.
- You want to provide for minor beneficiaries.
Unless you provide otherwise in your Will(s), gifts a minor beneficiary inherits are paid into court until the minor reaches the age of majority. In the event that it is felt that it would be beneficial for a portion of the gift which has been paid into court to be paid before the minor turns 18, court approval is required (involving the Office of the Children’s Lawyer).
By executing a Will, not only can you avoid the requirement that the gift be paid into court, you can also,
- specify at what age or ages the beneficiary should receive the gift (perhaps you feel 18 is too young or you do not want the beneficiary to receive the gift as a lump sum – your Will can address this);
- provide for payments from income and/or capital to or for the benefit of the beneficiary for various purposes; and/or
- specify who should be holding the gift in trust for the beneficiary.
- You want to maintain government benefits of a beneficiary.
If a beneficiary receives government support payments (for example, Ontario Disability Support Program (“ODSP”) payments), receipt of a lump sum gift greater than a certain amount can compromise his or her eligibility for the benefit.
There may be steps that can be taken in a Will that allow you to provide for the beneficiary without disqualifying him or her from receiving the government payments. For example, in the case of ODSP, it may be appropriate to include a Henson Trust in your Will.
I have previously written about Henson trusts (such blogs can be found here and here); however, it important to note that since such blogs were written there has been a change to the legislation. For example, at the time I wrote such blogs, in order to qualify, potential recipients were required to meet certain income and asset requirements, with the asset limit for a single person being $5,000. The amendments to the legislation have increased such limits significantly; the asset limit for individuals following the amendments is $40,000.
- You have personal effects which have sentimental value to someone.
If you have personal effects (such as jewelry, artwork or a coin collection) that are of sentimental value to you and one or more other individuals, you may want to specify who will get such personal effects. A Will gives you the opportunity to do this. Not only does having a valid Will provide you with the opportunity to indicate who gets the item you value following your death, it will also (hopefully) make the person who receives the item happy!
- You are separated from your spouse or in a common-law relationship.
Your relationship status may serve as an important motivating factor for having a Will.
In Ontario, if a person dies without a Will, he or she is said to have died intestate, and his or her estate will be distributed in accordance with the laws of intestacy which are set out in the Succession Law Reform Act (Ontario) (the “SLRA”).
Pursuant to the laws of intestacy, if someone dies without a Will and with a spouse and no children, the spouse is entitled to the deceased’s estate. If the deceased dies with a spouse and a child, the spouse is entitled to a preferential share (currently $200,000) and the remainder of the estate is divided equally between the spouse and the child. If, on death, the deceased had a spouse and two or more children, the spouse is entitled to the preferential share and the remainder is divided so that the spouse receives 1/3rd and the remaining 2/3rds is divided equally among the children. (The SLRA provides for situations where an individual leaves no spouse or children, but that goes beyond the scope of this blog.)
For the purposes of this distribution regime, the SLRA adopts the definition of spouse found in section 1 of the Ontario Family Law Act, which is as follows:
“spouse” means either of two persons who,
(a) are married to each other, or
(b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right.
Someone in a common law relationship may want their common-law spouse to receive a portion of his or her estate. Further, someone who is married but separated from his or her spouse may not want his or her spouse to receive a portion of his or her estate in accordance with the laws of intestacy. Therefore, if you are separated or in a common-law relationship, the laws of intestacy may not set out a distribution scheme that reflects your wishes.
- You want to make gifts to individuals who would not otherwise be entitled to receive anything from your estate under the laws of intestacy.
As mentioned above, the laws of intestacy set out how an individual’s estate is paid out if such individual dies without a Will. A Will, if validly executed, gives an individual the opportunity to have a say in how his or her estate is distributed following his or her death. The Will can provide that gifts of certain dollar amounts be paid to charities and/or individuals or it can provide that a percentage of the estate be paid out to certain charities and/or individuals.
Overall, by engaging a professional with experience in estate planning, you can prepare a Will that addresses your specific situation and establish a distribution structure that you are happy with to be carried out by a person or people of your choosing. Ultimately, a properly executed Will can give you a say in how your estate is distributed following your death.
If you are interested in obtaining assistance with the preparation of your Wills and Powers of Attorney, you can call Jennifer Corak at 416-682-7072 or contact her by email at firstname.lastname@example.org.