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Blog Preparing your Estate Documents – Your Will

January 21, 2020

Unfortunately, far too many Canadians don’t prepare their estate documents. It’s not uncommon! As an estate planner, I am often asked by families: “What documents do we need and what decisions do we need to make?” There is normally a follow up question too: “Do I need to use a lawyer to prepare my will?”.

I’ll answer the last question first. Yes, you should use a lawyer. A lawyer can provide you with customized legal advice for your situation and province (something this article is not intended to do!). So, please talk with a lawyer before acting on any of the information in this article. With that out of the way, here are some things to consider prior to meeting with the lawyer for your estate documents.

What documents do I need? In Alberta, each person should have three documents as a part of the estate planning process: a Will, Enduring Power of Attorney and Personal Directive. Each document has a different purpose. We’ll start by talking about wills in this post and then discuss the other documents a future post.

Will: A will provides instructions for the distribution of your assets after you pass away. There are a few key areas to consider for this document.

1) Executor – This person administers your estate and carries out your instructions. They distribute assets to your beneficiaries, sell property, pay debts/taxes, etc. Your executor should be someone you trust to manage money and someone who has some financial acumen. Generally, spouses will choose each other to be the primary executor if one of them passes away but you’ll want a backup too. If you can’t think of someone to do this for you, corporate executors/trust companies are available as an option.

2) Guardian – Guardians make decisions regarding the care of minor children until each child attains the age of majority.

3) Beneficiaries – A beneficiary is a person who is be entitled to inherit a portion of your estate. Most often, if there is a spouse she or he will receive the full estate. However, if the spouse has also passed away then a second class of beneficiaries would be involved. A secondary beneficiary could be a person’s children (if any), a charity, or maybe other relatives/friends.

If you have a family, you’ll want to consider what would happen in the event your entire family passes away too (a rare circumstance, but it is possible). In that circumstance, you may want the estate to go to your parents, siblings, a charity, etc.

4) Trusts – While you may want some beneficiaries to receive their gift immediately, some situations may warrant delaying a gift and having it held in trust for a while. For example, if you have minor children you may want them to receive their inheritance in stages (e.g. some at 18, some at 25 and some at 30). In the meantime, if there are education costs, etc. the person in charge of the money (trustee) can give them money earlier if the trustee feels the expenses are justified. Trusts can also have other uses (e.g. to hold a house/cottage, if a beneficiary has spending problems, if a beneficiary is disabled, etc.).

5) Trustee – Trustees manage money for your beneficiaries. Trustees invest the money, do regular tax returns and provide money to the beneficiary (or the beneficiary’s guardian) for expenses you deem to be allowable. Often the trustee is the same person as executor, however, it could be different.

Creating a will is an important task to make sure that your family and friends can deal with your estate after you are no longer around to deal with it yourself! It’s very important to complete this document properly as it can create major headaches for your loved ones if you don’t have one in place. It also helps you ensure there is a responsible and efficient transition of assets to your beneficiaries and helps you safeguard the assets you’ve built up for your family.

There are also two important documents that should be in place in case you are alive, but unable to make decisions regarding your finances or personal care. We’ll discuss them in future post.

If you have questions about estate planning, the advisors at Three60 Wealth & Estate Solutions can help. Our team of Calgary-based wealth and estate planners can integrate its vast experience and network to create a customized plan for you, your family and your business.

For a truly different financial planning experience, contact our office online or at 403-640-4414 to schedule an introduction meeting.

Authored by: Wayne De Boer, Wealth & Estate Planner at Three60 Wealth & Estate Solutions Inc.