Don’t procrastinate

DelayWe all do it – we put off things that don’t seem urgent, and maybe someday get around to them. Certain things just seem less pressing, and so we delay them even if we know that they are important. This blog post was supposed to go live this morning, and here I am at 3:45pm getting it onto our website. It’s not that it wasn’t important; it simply wasn’t urgent, and so it got delayed to the end of the day.

In my experience, this is absolutely the case with wills. Most people see them as important but not urgent, and so it gets put off, and put off, and put off, until it’s too late. It only becomes urgent when there’s a vacation planned, or someone close to you dies without a will. And then it becomes very urgent, and can result in a will being done too quickly with something missed, or at greater expense.

Having a will is important. You might not see it as urgent, but you would do well to at least bring it closer to the top of your to-do list.

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Stepchildren are not children when it comes to your estate

StepI have more than one client in a blended family. Sometimes, the family is so well blended that the stepparent considers the stepchild to be his or her actual child, but in law, they are treated differently.

If you die without a will, your stepchildren have no right of inheritance. As a result, you could end up with your estate going to one child at the expense of another, even if you intended it to be shared equally.

If you consider someone your child who is not biologically your child, and you have not formally adopted them, you NEED a will.

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Wills for single people

Single chairPrince died without a will, leaving his entire estate to be shared by his siblings. For people who are unmarried and have no children, this is a very important lesson: if you want to control where your assets go, you need a will. The default rule is usually not the ideal solution.

I have a client who is estranged from her mother; her father is deceased. Right now, if she were to die without a will, everything would go to her mother, which is not what she would want. Because she has a will, she is able to leave her estate to several family members as well as a charity.

The main lesson? Even if you’re single, you still need a will.

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Cutting out your spouse

ScissorsIn Ontario, the only prohibitions on full freedom within your will are that you cannot cut out someone who is financially dependent on you, and you cannot prevent a spouse from what they would be entitled to if you had separated the day before your death.

If you truly want to leave nothing to your spouse, you need to be aware of the fact that they can challenge the will based on their rights under the Family Law Act, putting your estate into lengthy and costly litigation. If you want to go this route, you should think about first getting a domestic contract in place to prevent the danger of a will challenge after you are gone.

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Estate planning for artists

Artist paletteOr authors, or musicians, or anyone who has copyrighted material. If this is you, then you definitely want to think about having a valid, up-to-date will in place to protect who has the right to use your copyrighted work after your death. Otherwise, you are leaving it up to chance. Think of Sylvia Plath: she did not update her will after her separation, and her former husband and sister-in-law ended up in charge of her written works after her death – likely not the result she wanted. If you own a copyright over anything, you should get your will done now.

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Are you in the majority?

Survey 2You may not want to be. A recent survey found that 72% of Americans have either no will or an out-of-date will (done before a major life event such as having a child, for example).  I imagine the same statistics hold true for Canadians. In this case, you most definitely want to be in the minority, and have an up-to-date will.

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Inheriting a house

HouseSometimes, instead of a share of an estate, a person could be left a specific asset; sometimes, this is a house or cottage.

If you do inherit, keep in mind that the executors will likely have to wait to transfer it to you until they have gone through the probate process. This can take anywhere from two weeks to six months, depending on how busy the courts are, so be patient.

Second, you need to seriously consider whether you want to keep the house or not. Don’t make a quick decision; this warrants a visit with an accountant and financial planner to assess possible costs and benefits to keeping it or selling it.

Inheriting a property can be more of a headache than it’s worth, so don’t be afraid to not hold onto it if it’s not the right decision for you.

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Where is your will?

LockedA short post this week: where do you keep your will? It’s important to have one; it’s useless if no one knows where it is. Make sure that your executor or someone else you trust knows where you have kept it for when the time comes.

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Not leaving an equal split? Talk about it now

Money pilesWe humans like to think we like surprises – after all, who doesn’t love a surprise birthday party, or an unexpected gift delivered to the office? Where we most definitely don’t like surprises, though, are in estates.

You are far more likely to leave bad feelings about your estate plan if you leave an unequal amount to be divided among your children and don’t tell them about it ahead of time. You might have very valid reasons – perhaps you have become estranged from one child, or one is in more financial need and you have chosen to help them out. However, if you don’t tell them now, you risk irreparably harming their relationships with each other, and depleting your estate through a costly legal battle.

You have the right to leave your estate however you want (with some limits), but the best plan is to make sure everyone knows.

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Don’t forget about the personal items

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In my experience, personal items cause vastly more problems in estate administration than their value would suggest. I’ve had clients fight over dining room sets that could have been replaced for under $1,000.00; the legal costs can vastly outstrip the cost of the items at times.

My best suggestion, always, is to ask your relatives what items they might like. If you are comfortable leaving that item to them, then mention it in your will or, better yet, give it away now. If not, talk to them now and explain why they won’t be getting it. A bit of work now can prevent an estate battle later.

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