In financial planning, we spend so much time worrying about accumulating, managing and protecting our assets but spend so little time contemplating how these assets will be distributed when we are gone.
One financial resolution to consider is to get a will in place. At the same time, consider getting an Enduring Power of Attorney and a personal directives and you will have the three key documents for an estate plan.
Related article: What is estate planning?
Dying without a will
If you've been thinking that it's not a problem to die without a will – think again. This “little” oversight can cost thousands of dollars in legal bills, bitter family disputes, as well as legal battles between siblings and/or their spouses. All of this would be avoided with the drafting of a proper will.
When you die without a will, you are said to die “intestate”. Essentially, this means that the Intestate Succession Act governs your estate which can cause problems, frustrations, delays, and add unnecessary costs. Dying intestate means that:
- You can't choose who your beneficiaries will be;
- You can't choose who will administer your estate;
- You can't plan your estate to minimize taxes;
- You can't choose a guardian for your children.
Dying without a will means letting the government decide on how your estate will be settled and being charged to have this done?
Related article: 12 consequences of dying without a will
How much will it cost?
When it came time for my wife and I to draft a will, it was about $750 for all three documents (Will, Eduring Power of Attorney, and Personal Directives). Some lawyers will do it for less and others for more. What I can say about the cost of a will is it is probably the most cost effective route to take. I've seen many legal bills far exceed the cost to draft a will when disputes arise because of lack of proper planning and execution. Saving money is always prudent, but paying to have a will correctly drafted is one of the wisest investments you will make!
Related article: Should you write your own Will?
How of often should you update your will?
According to Marvin Toy, a lawyer who has practised in the fields of tax law and estate planning for the past 12 years, “well-written wills should be flexible and contemplate future changes in your life. Nevertheless, you should review your estate planning documents when significant changes happen.”
Some examples of changes that can trigger a change to a will are:
- You get married, separated, divorced or remarried
- You live with someone in a conjugal relationship for over a year
- You have a child or a grandchild
- You have a significant new asset
- You anticipate financial difficulties in the future
- You move to another province or country
- Your health deteriorates
- Your child gets married, separated, divorced or remarried
- Your spouse or your child is facing financial difficulties
- Your spouse or your child develops an addiction (alcohol, drugs, gambling)
- Your spouse or child dies
- Your adult child become financially dependent upon you
- Your child no longer has any contact with you
- Your executor or trustee moves to another province or country
- Your executor or trustee becomes elderly, ill, or dies
- Your executor or trustee no longer has any contact with you
Keep in mind that you can change your existing will or create an entirely new will as often as you'd like.
If you don't have a will, don't wait till it's too late. Draft a Will sooner than later. If you have a will and you have not reviewed it for a while, it's probably time to pull it out and see if it needs updating.