"Will" Power

Many people, despite good intentions do not plan for their own death. Mark Goodfield reports to The Globe And Mail about his experience on the topic and why having an updated will is more important than one may think.

While, as Mark notes, no one wants to think about their own death, having a professionally reviewed, and updated, will is inevitably important and here is why. 

  

A will helps to protect your assets:

• Many assume their assets will automatically transfer to their spouse. However, unless the assets are held jointly with right of survivorship (except for Quebec), this will not be the case. If you pass away without a will, you are considered to have died intestate and the rules of your province of residence will determine how your estate is divided. As result, your assets may be distributed in a manner you did not anticipate or wish.

• Many families transfer assets haphazardly for income tax, asset protection and family law reasons. Where the assets are capital in nature, such as stocks or real estate, the transfer frequently creates an income-tax liability that is often blissfully ignored by the parent making the transfer. As a consequence, your estate and/or executor may become liable for the income tax not paid when those transfers were undertaken.

• Some people enter into handshake deals with lifelong friends in an attempt to avoid paying income tax, or to keep assets hidden away from spouses or certain family members. (Typically this relates to real estate). The obvious issue here is that you and/or your family are reliant on the honesty of your family friend to give back your share of the proceeds on the sale of the property.

While it can be expensive, hiring an expert to help build, and review, your will is worth every penny.

•  Legal and accounting advice can be expensive, so you may avoid getting it or hire a low-cost alternative. This is penny-wise and pound-foolish thinking. 

• Without proper advice, the estate can be left with a legal and income-tax mess and the professional fees to untangle everything often end up three to five times higher than it would have been had proper professional advice been obtained from the start.

In all, while the topic of death is never an easy one, it’s always better to be prepared. 

• Imagine how hard it is to file a return when someone has passed away and documents relating to share or real estate purchases have long since been destroyed. As your executor or accountant will not have documentation of the cost base of certain properties, your estate may end up paying excess income tax.

To read the full article, click here.

Need help reviewing your will (or getting started on one)? Call us today, it is never too late to start planning!