Making a Legal Will in Canada – LegalWills

Making a Legal Will in Canada – LegalWills

The facts are, everyone should have a Will. 

And just like life insurance – a Will is for others – not you.  

By making a Will you have the opportunity to clearly describe the distribution of your assets and wishes after you are gone – as grim as that statement does sound. Those wishes can include how your money is managed, management of houses or real estate owned, and much more.

I consider a Will as part of “adulting” and if you haven’t done one yet – well, you need to.

Maybe because the holidays trigger some reflection is why I’m thinking about reviewing and updating our Will soon. I mean, life changes. Making a Will is certainly not just for when you are old(er).

With a New Year comes new priorities – making a legal Will

I got the chance to talk to the team at LegalWills recently about their process, the ins-and-outs of Wills and some considerations that you need to mull over. A family member also took a test drive of the entire process just to see if the making a legal Will in Canada is as easy as LegalWills says it is.

Let’s get into details…

Why a Will and why an Executor? 

While I have a Will (as does my wife) – done many years ago now – we likely need to review it and potentially update this year just to ensure it captures all plans, instructions and wishes.

Essentially, I see a Will as those instructions to the Executor and remaining family members or other beneficiaries who have a responsibility to arrange for all “final affairs”. That goes from everything to the funeral wishes to any asset distribution wishes. It also includes taking care of any outstanding debts and liabilities, not to mention final tax returns.

Although I haven’t performed the process and administrative duties yet (thankfully…), I am the Executor for a few close friends and family. It’s an important role and request – one that I don’t take lightly.

In fact, appointing an Executor may be one of the most important decisions related to an estate plan or Will you will make. I see being trusted as an Executor (to carry out someone’s wishes) as a major responsibility – given this administration process is ever evolving and can be very complex.

I asked the team at LegalWills to provide a summary of this Executor role and why it’s so essential.

Mark, you’re spot on. This role is not to be taken lightly. 

The first thing the Executor has to do is take control. They must identify and secure all of your assets just to make sure that nothing goes missing.

They must probate the Will – which is the official process by which the document is accepted as your official Last Will and Testament and they are given the legal authority to act through a document called a “Grant of Probate”. This Grant of Probate allows your Executor to start gathering your assets (and hopefully you have an inventory of assets to help them) and they will present this document to each bank and financial institution.

The Executor must then pay debts, taxes, and then distribute your assets to the beneficiaries according to the directions in the Will.

You should also leave clear instructions for what should be done with your “digital assets” like your social media accounts because this has become a new layer of responsibility for your Executor.  While all of this is going on, your Executor is also responsible for arranging your funeral.

Other key appointments – guardians

Beyond the Executor role, you may need to consider guardians for your children.

If neither parent was available for the minor children (e.g., a common accident occurred or a single parent was involved in a loss), somebody will need to take care of your children.

This is not an issue for us but I can appreciate younger parents have a complex and critical decision to make on this.

Sadly, if you don’t have a Will, then a judge at the family-law level courts will appoint a guardian for your children. (Geez, hopefully someone decent will come forward for your children!)

I can’t imagine why younger parents wouldn’t have a Will for this very reason.

Be mindful that after you are gone, your guardian may have personal struggles of their own. Potentially, they are no longer healthy or able to look after your children. So, to that effect, your guardianship decision is not a legally binding appointment.

If your children are not minors, then there is no guardian appointment necessary.

I also asked the team at LegalWills to highlight what considerations should be included for any parent with young children in their Will, although every decision is personal of course.

Mark, we find it interesting that many people get stuck on this page of our service, because they find it difficult to choose the right guardian. Perhaps there are unspoken family expectations or they don’t want to disappoint somebody, but by not naming a guardian you are putting the decision into the hands of a judge.

A judge can look at how the person is related to the child, their income, where they live, their own family situation, but they can’t look at the less obvious factors like parenting philosophy, spiritual beliefs, and even the bond and relationship the individual has with the child. There are often trade-offs to be made; perhaps the best guardian lives in a different province or country. Ultimately, the appointment should rest with you, not with a judge.

Asset distribution – what goes where and to whom?

Beyond the critical decisions above, the next major important instructions to be set out in your Will relates to the distribution of your assets. Those could be gifts, charitable donations, wealth-distribution decisions from your estate and much more.

Recipients of your assets are referred to as beneficiaries and the assets that are distributed are called bequests.

Bequests can be cash, cars, family furniture heirlooms, jewelry, stocks, a percentage of your entire estate, and any combination of these things and more.

The team at LegalWills shared some common assets that your Will might consider identifying and describing.

Beyond your list above Mark, we encourage Canadians to give some consideration to “digital assets.” These are online accounts that may have financial value such as, a revenue stream from a YouTube channel, a domain name, cryptocurrencies, or personal accounts like your online photos. In your Will, you can now make it clear who should take responsibility for your digital assets and who will receive what.

A couple of other things to note: You cannot leave a large sum of money directly to a young child so your bequests may end up going into trust. Even then, you may not want your child to receive their entire inheritance at 18 or 19 years of age, so your Will allows you to stagger their inheritances. For example, you could give your children 1/3 of their inheritance at age 21, the next 1/3 at age 25, and the remainder at age 28.  

Based on the guidance above, it seems to me you should not think of making a Will as an once-in-a-lifetime event – assets change over time. So, this is part of the reason why we need to review our own Will again in 2021 and see if those instructions still make sense.

What happens if you die without making a Will? LegalWills insights…

Well, you might be frowned upon as being an irresponsible adult for one.

I’m kidding, kinda.

Honestly, my initial thoughts are, if you die without a Will and you haven’t appointed an Executor, you may be inviting a family squabble. Also, will your spouse, adult children, or a family friend take on the role?

While this is being sorted out, nobody has secured your assets or even taken an inventory. It’s not uncommon for items that have been verbally promised to family members to suddenly disappear – depending on family dynamics. You need an Executor to take charge of this.

When you don’t have a distribution plan, the destination of your assets may not be as obvious as you think. For example, you may think that your surviving spouse or partner may receive all assets automatically without a Will – but don’t bet on that.

LegalWills provided an important detail to this discussion that didn’t immediately come to my mind:

This is very important to clarify Mark. If you are married with children, everything would pass to the spouse in just two (2) Provinces. It would not happen in any other Province or Territory. Oh, and if you are living in a common-law relationship, five Provinces (including Ontario) do not recognize that relationship if you die without a Will. Your partner would receive nothing.

Geez.

This is where I asked my family member that used LegalWills recently about the process – and specifically – why a Will now?

My family member:

I recently purchased a home which really triggered in my head that this is something I need to get done. Having gone through the process of trying to manage my ex-wife’s estate after she passed away, I realize how important it is for having a Last Will and Testament. Although my children are no longer minors, they are still very dependent on me financially, and if something were to happen to me without a Will, I would be leaving them in a very difficult position. Age is also a factor as I approach 50 – I absolutely know it’s something that is very important to have done and I want to have it.

With this important background information about Wills shared, I also asked the LegalWills team some important questions you might have as well. Here was our discussion on some key subjects.

So, let’s go with the obvious – why not use a lawyer? What was the trigger for LegalWills to launch their products and services? Was there a particular tipping point?

(Answers as told by LegalWills Co-Founder & CEO, Tim Hewson)

Yes, there was Mark.

This originally came about when we were working together for a large company and we had a tradition of going out for Friday drinks after work. There were a group of about 15 of us, and somebody mentioned that they needed a Will, but didn’t have one. We went around the table, and these were a mix of people some married, owned houses, some had children, we were all professionals, and not one single person around the table had a Will. And every single one of us knew that we should. It seemed like a broken system to us, and it wasn’t just a cost barrier. It was an education and convenience issue. At the time the only alternative was a blank form Will kit which was widely regarded as terrible. At that moment, we started to investigate why the options were so limited. That was back in 2000. We started working with lawyers at that moment to offer an affordable, but high quality alternative.

Great to hear. Should any prospective users (including my family member) be concerned these are not legal documents and will not “stand up”? 

There are two ways to answer this question. Firstly, you can look at the laws related to Will in your Province. The basic requirement for a Will is that it must be signed in the presence of witnesses. Anybody has a right to prepare their own Will, and even writing your Will on a blank sheet of paper would be perfectly valid (it just wouldn’t be a very good one). There is no legal requirement to work with a lawyer to write a Will. You should work with a lawyer if you need legal advice, but most people do not need legal advice to write a Will.

Furthermore, we have been in business for 20 years, prepared hundreds of thousands of documents, and we have never once heard of there being an issue with one of our Wills. We have on the other hand heard from many people who had a family member use our service and subsequently pass away – these people have written to us, thanking us for the service.

And for my final question Tim, should users retain copies of their completed documents and if so, where and with whom?

Excellent question Mark.

Yes is the answer!

The most important final step of preparing your Will is storing it in a safe place that is known and accessible to your Executor. Your Executor is the only person who needs the document (you can if you wish simply give the document to your Executor in a sealed envelope for safe keeping). There is no requirement to file or register the document anywhere. Do not hide your Will. We regularly get calls from people saying that a parent has died, they have a Will, but nobody can find it. If nobody can find your Will, it is the same as not writing one.

We also offer a unique digital solution to managing your personal information and legal documents called MyLifeLocker. It’s a secure service where you can upload complete instructions for the Executor of your Will, a full list of your assets, bank account details, online account information, etc. Then, only the “Keyholder(s)” who you have authorized will have access to that information after you have passed away.

Closing thoughts – Making a Legal Will in Canada

I certainly don’t see making a Will as any one-time event and to be honest, I have to get after reviewing our current Will to see if it includes everything we think it should, should something catastrophic happen to one or both of us.

To paraphrase my family member who just completed this process:

What was most important to me was to ensure I can clearly state what my intentions are. I did not want to produce a Will or POA which leaves instructions open for interpretation.

Well said.

Everyone should have a Will – such that family and loved ones have those clear instructions on what should happen next. Your Will does not require a lawyer although that may be beneficial to you based on your circumstances. There is no requirement to use the services of a lawyer or notary public to prepare your own estate planning documents, including your Last Will and Testament but as always, personal finance is personal.

As part of a new partnership with My Own Advisor LegalWills.ca is happy to offer the following promo code MOA15 at the time of product checkout.

As always, there is never any obligation to use any partnership code on my site. Any codes that exist on my site are always elective.

Thanks for your readership and drop me a question in the comments section. The team from LegalWills is also ready to provide their subject matter expertise and answer questions. 

Mark

Disclosure: My Own Advisor was not compensated for this post. I was curious about the process and so was my family member. I have always used a lawyer for any of my previous Wills and I would not hesitate using a lawyer again for any fee-for-service counsel to understand any legal implications of my/our decisions including those beyond a Will. There is no one-size-fits-all.