Smart Cookie Andrea Baxter, 32, is a home owner with significant savings, investments and a few valuable family heirlooms (read: Grandma’s jewels). One thing she doesn’t have, however, is a will.
With no dependents or spouse, Baxter has never made any provisions for who will inherit her stuff. And, considering most of us don’t like to contemplate our own demises, she’s not alone.
According to a 2007 research study published by Harris Interactive for Martindale-Hubbell, in the three years leading up to the report 55 per cent of adult Americans did not have a will.
“It’s surprising how many people don’t have [a will],” says Suzana Popavic-Montag, a partner at Hull and Hull LLP in Toronto. “And it surprises me that people spend a lifetime amassing wealth and then leave it up to the government to dictate how it will be distributed”.
For Baxter that means without a will all of her possessions would automatically belong to her parents when, in reality, she’d rather see it go to her brother and his children if anything were to happen to her. For this reason alone she needs to give clear written instructions about her final wishes in a will.
A legitimate and accurate will is the only way to ensure your assets will be distributed the way you want them to be. If you don’t have a will you’re letting the laws in the province or the territory you live in make those decisions for you. And if you hold the belief that your spouse will automatically inherit everything – think again. In most parts of Canada children trump partners. Without a will your husband or wife will get a predetermined amount of your assets – the rest goes to the kids.
There’s also a common misconception surrounding who should have a will. To clarify, every adult who owns assets or has a spouse or children should have one. That most likely includes you.
Janet Stewart, a senior estate practitioner at Lerners LLP in London, Ontario, encounters many people who don’t believe they need a will. “My question to them is, ‘Do you have nothing?’ If you work you likely have pension benefits, insurance, etc. We all likely have something we would want to pass along. No matter how large or small your wealth is, it’s yours and you should decide where it goes.”
According to Stewart, wills are a family affair. “I’ve got clients who are in their 60s and 70s and have a fair amount of assets with kids in their 30s and 40s [who don’t have a will]. If they were all in an accident together things could be in a terrible mess.”
It’s certainly a morbid thought but, as Stewart explains, “you have to anticipate these things. That’s life.”
When it comes to creating a will, you have several options. Hire a lawyer and the fee will range from a few hundred dollars up. If you decide to go this route, start with a legal referral from a family member or close friend. If that doesn’t pan out, visit www.lawyerlocate.ca and search for lawyers in your area who specialize in wills and estates.
With a little homework and prep on your part you can minimize the cost of working with a lawyer. Will preparation checklists like this one can be found online to help you get started.
The other option is using a will kit. Websites like www.legalwills.ca let you draft your own will for under $40. Prices range depending on what kind of kit you use.
The problem with going down the do-it-yourself path is this: any inaccuracies and ambiguities could cost your beneficiaries more in legal fees to sort out your mistakes than it would have to draft the will properly in the first place. For this reason it’s worth it to shell out the extra money and have a professional look over your work – even better to partner with one and make sure it’s done right the first time.
Whether in the tabloids or our own lives, we’ve all heard about the nightmarish situations that arise when a will is outdated, inaccurate or non-existent. You don’t want your lasting legacy to be one of a sloppy will job. Take the necessary steps to ensure your wealth, large or small, is left in the right hands. Then you'll be able to rest in peace.
Angela Self writes for Globeinvestor.com weekly. She is one of the founders of the Smart Cookies, a group of five women who specialize in personal finance. They are hosts of a self-titled show on the W Network and the authors of The Smart Cookies' Guide to Making More Dough. Find out more about them at Smartcookies.com
