Have you decided what will happen to your property after you die? Without a last will and testament (commonly called a ‘will’) the law decides exactly how your estate (the things you own) will be divided among your surviving spouse, children, siblings and parents. When you have your lawyer draft a will, you can make certain your priorities are set forth as directives to be achieved.
• Choose a competent executor. An executor is appointed with the task of administering your will, or carrying out your wishes. You may also want to choose a contingent executor, just in case the first decides not to follow through or is unable to for any reason.
• Incorporate your will with your spouse’s will. This is referred to as a “reciprocal will”. It looks at various potential occurrences such as: “What if my spouse and I die at the same time?”
• Give instructions regarding the type of funeral you desire. Talk with others while living. It is important to visit with your Funeral Director and express to him or her clearly if you would like to be cremated or not, and/or interned at a cemetery, and where (is a plot chosen in advance, say beside a loved one).
• Divide assets specifically amongst chosen heirs. Should you wish to leave specific items to a certain person, make sure this is written in your will. This will avoid confusion amongst your beneficiaries.
• Establish contingent beneficiaries. This can ensure heirlooms pass on to other friends or relatives in the event that current beneficiaries have died.
• Where children are concerned, define legal guardians, and contingent guardians. A will can allow you to choose who will care for your children if both you and your spouse die.
• Outline financial arrangements for your dependents. Review life insurance policies to ensure that they provide adequate capital protection for your loved ones.
• Pre-establish special trust funds, and trustees for dependents, where necessary. Consider how monies are to be invested, and at what age each child should receive his or her share of any monies left to them.
• If divorce is imminent, have your lawyer explain your responsibilities in the Family Law Act and how the law may relate to you and your will. This will define who has a right to financial support after you die. You may want to leave certain assets to the children in trust if a divorce occurs. If you own a life insurance policy, you may be able to change the beneficiary to pass the death benefit to any party tax free, or perhaps pass the funds to your estate and let the will define the beneficiaries of the life insurance.
• Where a spouse is concerned, be careful not to direct a disposition of RRSP assets. Under Canadian Tax Law, RRSP assets are allowed to rollover to a spouse on a tax-free basis. By naming your spouse as your beneficiary, you can ensure that your RRSP assets roll over to your spouse without any complications.
• Consider bequests to charity. Assets such as property or life insurance proceeds can be left to a charity via your will.