Danielle Bergeron | Desjardins Group
Nobody wants to talk about what's going to happen when they die. And that's part of the reason there are so many misconceptions about wills.
Here, we debunk 4 common misconceptions about wills and estate planning to help get your affairs in order. Some facts for Ontario residents.*
Myth #1: I don't need a will because my assets will automatically be passed down to my spouse and children.
If you pass away and you don't have a will (known as intestate succession), your assets will be divided among your beneficiaries according to Ontario's Succession Law Reform Act.
Your beneficiaries are your legal spouse (married or civil union) and any descendants (children and grandchildren) you may have. If you're in a common-law relationship, your significant other isn't legally entitled to anything--even if you have children together. If you're separated but not divorced at the time of your death, your belongings will pass to your ex, even if you've been living with someone else for years.
If you don't have a legal spouse, your children will inherit. If one of them is deceased, their descendants (your grandchildren, for example) will inherit their share. If you don't have children or grandchildren, your parents will inherit equally.
Other laws have been established for situations where there are no surviving spouses, descendants or parents.
Taking the time to make a will is the only way to be sure that your wishes will be respected after you're gone.
Myth #2: My estate isn't big enough to need any planning.
Estate planning is for everyone, not just for people with a lot of assets. The most important thing is that your assets are passed down to the people YOU want them to go to.
This is how you can make sure your minor children's inheritance and education are handled according to your wishes. You can also assign a legal guardian to take care of them and an executor to oversee the financial side of your estate.
Did you know?
In Ontario, the surviving parent remains the child's guardian, regardless of whether someone else was designated in the deceased parent's will. However, naming a guardian or custodian is still a good idea in case both parents die at the same time, or if the second parent dies.
A testamentary trust may also be an option if you have a family member with a severe disability or who is otherwise dependent.
Myth #3: Wills are expensive.
Drawing up a will doesn't have to cost a lot. In Ontario, the law recognizes 2 forms of wills.
1. Holograph will
This type of will is handwritten and signed by the testator (the person who makes the will) and doesn't require witnesses. The downside is that it's easily contested.
2. Will made in the presence of witnesses
A will made in the presence of witnesses may be written by the testator or by a lawyer. It must be signed and dated before 2 witnesses of legal age.
It's important to note, though, that no matter what type of will is chosen, legal representative or heirs must obtain a letter of probate following the testator's death, if the type and value of assets being inherited require one. This document proves the authenticity of the will and that it has been filed with the court, and identifies the estate trustees. This step comes with its own costs.
Myth #4: I don't need a will because I'll pass down my belongings while I'm still alive.
Proper estate planning can also include passing down a portion of your assets while you still can, letting you decide how to divide them up. It gives you the freedom to choose how and when to do this. Most importantly, it helps guarantee that you'll have enough money to cover all your needs while you're alive.
If your kids are in their 30s, they're probably taking on certain financial obligations. Receiving a portion of their inheritance may serve them better today than it would 20 or 30 years down the road. It could help them pay off their student loans, put a down payment on a home or just give them and their family a little extra breathing room.
You can also donate a portion of your assets to a charitable organization or foundation whose cause is important to you.
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* Facts about Quebec residents