Family turmoil and financial losses can happen if people die without a will, yet statistics say 50 per cent of Canadians don’t have one. What’s going on? Kim Parlee speaks with Nicole Ewing, VP, Tax and Estate Planner, TD Wealth, who shoots down many of the excuses that keep people from getting on with this important document.
We've talked about this before. If you don't have a will, all kinds of bad things can happen to your wealth and the welfare of your family. Yet statistics say 50% of Canadians don't do their will.
So what's going on? Why aren't people doing this? For people still making excuses, here's Nicole Ewing. She's Vice President, Business Succession Advisor, and Tax and Estate Planner at TD Wealth. She's going to shoot down those excuses that keep people from getting on with this important document.
OK, Nicole, so I'm going to throw some excuses at you, and you're going to tell me why they're not valid. I haven't done my will because it's just too hard to think about. It's too stressful to think about all the family issues and conversations involved.
OK, so I would suggest to you that doing your will is a way of relieving stress and untangling those issues for your family. I have seen situations where the wills are not in place, and it leads to litigation and to disharmony in the family and confusion. And so you have the opportunity to take that stress away from your family and give them some guidance while you're still capable of making those decisions to let them know what it is that you want to have happen.
OK, I'm convinced. That's a good answer. Next one is, I haven't done my will because all my wealth is going to go to my partner or my spouse anyway. So why bother?
Right, well, interesting that you said partner or spouse, because these definitions really matter when we're talking about wills. So in certain provinces, the rights that the spouse would be entitled to are completely different whether you're married or common law. So that's step one.
Step two, even if you are married, unless you only have a spouse and no children, the spouse is not going to receive all of your assets. This is a big misconception.
So it varies by province, but in Ontario, for example, the spouse will receive the preferential share of $200,000. The remainder is going to be divided and shared amongst all of the fam-- well, the spouse and the children. So it is not an automatic about who is going to receive those assets.
Even if you don't have a spouse and you have children, how they receive those assets is going to be different. Or if you have a spouse and both of you pass away at the same time, how are those assets going to be dealt with? So I would suggest that there is no automatic when it comes to taking care of itself.
OK, and I'm assuming no automatic for your spouse. And other one is it's going to go to my kids anyway. So--
Well, it may go to your kids. But how it goes to your kids matters as well. So do you want them to receive all of the money when they turn 18? If they're minors, the funds may be held in trust for them until they turn 18. And unless you have a document in place setting up the terms of those trusts, it can be very restrictive. And there may have been opportunities to provide some real value to them during those crucial years, and they don't have access to the funds.
Alternatively, they're receiving at age 18, it's theirs. And we all know situations where that causes-- we talked about stress-- that causes real problems for them and the family as well.
And also with the minors, I guess, it's also if you and your spouse die, who's actually going to take care of them?
Wills are not all about money, right? They allow you to name your executor and who's going to be trustees of trusts, who the guardian of your children will be. And if you don't have a document in place, there's a delay. It might be the next of kin lives in a different province or a different country. Do you want your children being in limbo until that individual is contacted and able to step in?
OK, this excuse, and I hear this a lot, is that I'll do it but I'm just about to get married or who knows. Maybe I'm supposed to get a new job or I'm about to retire or I'm about to have a child. There's something complicated coming. I'm going to wait till that's done.
Well, fortunately lawyers are experts and professionals and are able to anticipate these events. And they can draft a will in a way-- we don't draft wills thinking that, oh, if something in the future changes, I'll have to change my will.
We would encourage people to update their documents and make sure that they're taking into consideration any changes, but documents should be drafted in a way that we-- for example, if you're going to be getting married, it's made in contemplation of marriage. And that means it will continue on after the date of marriage. If you have children, if you're planning on children, you can draft the will in a way that includes them and perhaps even future grandchildren. So you're able to plan for these events now. And I would suggest you probably enjoy them more if your affairs are all taken care of.
What about this one, costs too much?
Well, it does cost. And you know what costs more is not having a will, is having the litigation that may arise from it. And so depending on your circumstances, if they're simple and straightforward, the will will likely be not terribly expensive, certainly less than any court costs that would come into play if you didn't have them. But for those where the situation's a bit more complex, the document may be more expensive as well.
Spend it now or spend it later. And you avoid all of those issues by having hired professionals now. Pay them what they're worth. The advice is invaluable. And you're able to avoid a whole lot of fights and perhaps the loss of the entire estate at some point down the line. If you don't have this will in place and it goes to court, lawyers fees on that end are going to be much, much more expensive.