12 Things to Know Before You Make Your Will
Kahane Law Office has Wills and Estates lawyers ready to help you in this process. Click HERE to email our Edmonton office, or HERE to email our Calgary office. You can also call us at (403) 225-8810 (Calgary) or (780) 571-8463 (Edmonton).
Here are 12 things you need to consider before making your Will:
1. Who Will Carry Out Your Instructions And Wishes In Your Will? aka The Executor
Your Will contains your wishes and instructions regarding your body, children, and property. You decide who will carry out those instructions. It should be someone you trust, who knows you well, who has strong organizational skills and knows how to “get things done”.
You may be tempted to think that it is a great honour for someone to be named the executor for your estate, and that if you don’t name someone as the executor you will offend them.
On behalf of anyone who has ever been an executor, please know that it is no great honour to be the executor – in fact – it is a difficult and thankless job. It is a lot of work, and often they may have to deal with beneficiaries who are difficult or unresponsive. It will make their job even more difficult if you name them as an executor jointly with one or more other people. Resist the temptation to name more than one person as your executor.
However, you can – and should – name one or more alternate executors to act if the primary executor is unwilling or unable to act or continue to act.
And if you know someone will feel slighted by not being named as your executor, the best thing to do is to talk to them – while you’re still alive – and explain why you made the decision you did. This can go a long way to making things easier when it comes time to administer your estate.
2. Who Will Be the Guardians Of Your Child(ren)?
If you don’t have any minor children, you can skip this one. But if you do, this is probably the most important part of your Will. You have the opportunity to decide who will take care of your children after you die and appoint them as your children’s legal guardian upon your death.
Of course, you should choose someone you trust, and you should choose an alternate guardian to act in case your first choice is unable or unwilling to act at the time of your death. It is also a good idea to talk to the people you are naming as guardian/alternate guardian to make sure that they would be willing to act. If they are not comfortable being named as a guardian, it is better to know now so that you can choose someone else who would be suitable.
3. Do You Need A Trust (And What Is That)?
If any of your beneficiaries (the people you are leaving property to) could be under the age of majority when you die, their property must be held “in trust” on their behalf.
The two most common situations that give rise to the requirement for a trust are:
- if you have at least one child who is a minor (or that still requires your guardianship as a “represented adult”); or
- if you are leaving property to your child(ren), and if they die before you do, then it goes to your grandchildren (and there is potential that one of those grandchildren will be a minor when you die).
However, you can also decide that your beneficiaries must reach a certain age, greater than the age of majority, before receiving their inheritance.
Establishing a trust should be taken care of in your Will. It should name the trustee(s), which can be the same or different than the guardians or executors you name elsewhere in your Will. It should also establish the rules that the trustee must follow when taking care of the property they are holding for your beneficiary. And finally, you can name the age that the beneficiary must reach before receiving the property (it does not have to be 18, it can be any age you choose).
4. What About The Jewellery (And Other Specific Gifts)?
Of course, you can leave specific gifts for specific people as part of your Will. You can leave your wedding ring to your favourite niece, or your mint Aston Martin DB9 to your favourite nephew. However, do not do this as part of your Will if you can avoid it. It is much better be general when making your will to ensure that you do not miss anything. You can make allowance in your Will that anyone can take a specific piece of property as part of their inheritance if they would like (as well as the method for resolving disputes if any arise on this issue). However, most commonly beneficiaries are happy to get the cash.
The danger in leaving specific gifts is that you forget something, or the gift fails. If either of those things happen, the property will not be dealt with under your Will at all. Then you will be at least partially “intestate”, and that property will be dealt with under the “default” rules.
Also, the property you own when you die may be very different than what you own when you are making your Will. In fact, it very probably will be. In order to stay on top of this you would need to change your Will every time you acquired new property.
If you want to leave specific gifts, you can make a memorandum that you attach to your will detailing the specific gifts. Then, as your property or your relationships change, you can destroy the memorandum and make a new one, without needing to make any change to your Will. You can even mention the memorandum in your Will and ask your executor to follow the instructions for specific gifts left in the memorandum.
5. Real Estate in Making Your Will
Real estate is not different from other property, such as cash and investments, except for the fact that people often own property as “joint tenants”. This is normally how spouses hold their real estate. The benefit of holding it this way is that, when one joint tenant dies, the remaining joint tenant automatically owns the property. They only submit a declaration to the Land Titles Registry and are issued a new title in their name alone. The real estate does not form part of the estate of the person who dies.
It is important to note that if real estate forms part of the estate, the Land Titles Office will require a “grant of probate” or “grand of administration” before they will transfer the title. Without a grant from the court the property cannot change hands. Joint tenancy can be used as a tool to avoid the need to “probate” the Will. To understand how this might work, or if it might be right for your situation you should see a lawyer.
6. What About Life Insurance, Registered investments, TFSAs, GICs…
Any financial product that allows the owner to name a beneficiary, such as those listed above, will pass automatically to that beneficiary upon death of the owner. It never forms part of the estate. Be sure to review your beneficiary designations on all those investments to make sure that they match what you want.
You may also choose to not name a beneficiary, or to name your estate as the beneficiary. If you do that, the investment will form part of the estate and be distributed according to the instructions in your Will. There are pros and cons for either approach. You should talk to an estate planning lawyer, your accountant, or financial advisor (or all 3) to determine what would work best for your situation.
7. Compensation For The Executor & Trustee
Executors and trustees are entitled to compensation for dealing with the estate and trust, respectively. You can set the method for determining that compensation in your Will. If you do not, the executor or trustee may have to get permission from the court to be compensated. The estate or trust will pay for that court application, and it can cost upward of $3,000.
This can be avoided by naming the compensation in your Will. The going rate of compensation for an executor is 3% of the gross value of the estate. The going rate of compensation for a trustee is 2.5% of all money that flows into the trust, and 2.5% of all money that flows out of the trust.
8. Requirement To Provide A Bond
In Alberta, the law states that if the executor is not a resident of Alberta, they are required to provide a bond (insurance) worth the gross value of the estate. This is because the Alberta courts only have jurisdiction over property in the province. If a swindler executor took the money and ran, it could be difficult, if not impossible, to recover. This is usually not an issue, but it is easy to understand why the law requires it. You can waive this requirement in your Will, but if you do not, the executor will likely be required to post that bond if they live somewhere else.
9. Signing Requirements For Your Will
In order for a Will to be valid in Alberta, the signing must be witnessed by 2 people who are not named as beneficiaries in your Will. The “testator” (the person making the Will). There are some other options for making a valid Will (see the Wills and Succession Act), but this is the most common.
10. GA8 – What’s That, And Do I Need One?
If your Will needs to be “probated”, it makes things a lot easier if one of the witnesses can be located to sign the “GA8” form. That form is an affidavit that one of the witnesses swears indicating that they witnessed the signing and that the testator knew what they were doing (had legal capacity to make a Will). It is best if the person swearing it is a lawyer, who knows what the Wills and Succession Act says about what it means to have “capacity” to make a Will.
It is a very good idea to have the appropriate witness fill out and swear an NC8 at the same time that the Will is signed. The original Will should then be attached to it as “Exhibit A”. This is evidence that the Will is valid.
At Kahane Law Office in Edmonton we prepare and deliver an GA8 with every Will we prepare.
11. Power Of Attorney
A Power of Attorney gives someone the authority to act as your legal representative, and to deal with your finances and other property while you are still alive. This is normally prepared by the lawyer at the same time as a Will.
a. Springing or Immediate
A Power of Attorney can be springing or immediate. A Springing Power of Attorney comes into force only when it is triggered by some event, normally when the “donor” (the person giving the power) becomes mentally incapacitated. An immediate Power of Attorney is just what it sounds like – it becomes effective the moment it is signed. A lawyer can help you know which is right for your situation, and the risks inherent in a document like this.
b. Real Estate
The value of a Power of Attorney is, to some extent, in the eyes of the beholder. In other words, it may be perfectly legal, satisfy all legal conditions, but still not be suitable for whoever you are giving it to. For example, the Land Titles Office will not allow someone other than the landowner to make a change to their Land Title, even by Power of Attorney – unless – that Power of Attorney specifically gives that person explicit authority to do so.
An estate planning lawyer from Kahane Law Office will make sure that your Power of Attorney is suitable for what you need it for.
12. What About A “Personal Directive” (Living Will)?
A Personal Directive is the document that details your wishes regarding your health care, and your person. It comes into effect ONLY when you become mentally incapacitated, and it appoints someone (called an “agent”) as the person that can make decisions for you.
It allows you the opportunity to make all the “tough” medical decisions before you are actually in that situation, but it is more than just a “DNR” (do not resuscitate order). You can decide how you will be treated in the event you lose capacity long before you reach the “end-of-life” stage. You can give someone you trust the authority to decide where you will live, and to control who visits you and how many visitors are allowed.
What’s Next?
As you can see, there are a lot of issues to consider to make sure that your Will and other estate planning documents deal with everything you need. A well-drafted Will will prevent the need for your estate to be involved in litigation. Considering one court application can cost your estate thousands of dollars, it makes a lot of sense to spend a little now on a good lawyer. A good estate planning lawyer will review your situation and wishes, provide you with advice and options, and draft a Will that meets your needs.
Once you have a Will, you should review it at least once per year to make sure that it still suits your needs. If one of your named guardians become unable to act, you will need to update your Will. Kahane Law Office can take care of that for you as well.
To contact a Wills and Estates Lawyer at Kahane Law Office, call us at (403) 225-8810 (Calgary) or (780) 571-8463 (Edmonton). You can also click HERE to email our Edmonton office, or HERE to email our Calgary office.