Planning Your Will
The following are some of the matters that you may need to think about in order to properly plan your Will:
- Executors – who do you wish to appoint to administer your estate? The executor takes care of all the administrative details of your estate, including arranging the funeral, determining the value of your assets and liabilities, sorting through all your personal belongings, paying bills, collecting in income, filing tax returns, accounting to the beneficiaries, and distributing the estate. The executor could be one person, or it could be two or more people working together. If you chose only one person, then we always recommend that you choose an alternate to that person, just in case something happens to the first person that you selected.
- Treatment of personal and household effects – Do you wish to just have these generally divided between your beneficiaries, or do you wish to give certain items to various people?
- Cash legacies – Do you want to give cash amounts to certain people, or charities or foundations?
- Division of the residue of your estate – After the payment of all expenses associated with your estate and any cash legacies, what remains of your estate is called the residue. You need to decide to whom the residue will be given and in what proportion. Frequently, the residue is given to a spouse, but you also need to decide who will receive your estate if that spouse predeceases you. If you are giving your estate to your children, and your children are quite young, then you need to think about what you want to have happen with the residue of your estate if you and your spouse and your children are all killed in an accident together. If you do not have a spouse or any children, then you may want to consider providing for your friends or more distant relatives, or possibly for your favourite charities.
- Trusts – if you give either a cash legacy or a portion of the residue of your estate to someone who is under the age of majority, then you will need to set up a trust for that beneficiary. This trust will have to be in place at least until that beneficiary reaches the age of majority (which is 19 in B.C.), but you may also choose to have it continue beyond the age of majority. Beyond the issue of the length of the trust, you will also need to decide how you want that trust fund to be used. Will it simply be invested with no access to it until the trust comes to an end, or will the trustees have the power to use part of the trust fund for the benefit of the beneficiary? If there is a power to use the trust fund, then what will it be used for? Education? Raising that beneficiary? Travel?
Trusts can also be established for people who are over the age of majority, but are unable to manage money for themselves, possibly due to a disability or an injury. In this case, you will need to decide whether the trust will be in place for the lifetime of the beneficiary, or whether it will be for a shorter period of time. You will also need to decide what the trust fund will be used for. Will it be to provide housing, or is it to be used solely for extras or luxuries? If the beneficiary is receiving income assistance due to a disability, then the trust will have to be carefully drafted in order to avoid impacting any entitlement the beneficiary may have to receive income assistance. If you do decide to provide a trust for the lifetime of a beneficiary, then you also need to decide what will happen to the remainder of the trust fund when that beneficiary dies.
- Trustees – if you do set up a trust for a beneficiary, you will need to decide who the trustee will be. The trustee is a person who administers the trust for its duration by: investing the trust funds; consulting with the beneficiary or the beneficiary’s parent or guardian as to the moneys to be paid for the benefit of the beneficiary; accounting to the beneficiary; and filing tax returns. Most often, clients choose to appoint the same person as executor and as trustee. However, sometimes, the trustee is someone other than the executor. This may be due to issues such as geographic proximity to the beneficiary of the trust. If it is going to be a long term trust, then you need to consider who will act as successor trustee if the original one is no longer able to continue to act.
- Blended Family Issues – if you are in a new relationship and have children from a previous relationship, then it is important that you consult with a lawyer about estate planning issues. Estate planning in this situation can be very complex as you seek to balance the desire to provide for your spouse with the desire to provide for your children.
Every person’s estate is unique. The above are simply some of the more common aspects that are found in most Wills. The specifics of your Will will be determined by the type and value of the assets in your estate and the situation of the people or charities to whom you wish to leave your estate. At your Will appointment, all these aspects will be canvassed so that a Will that suits your situation can be prepared for you.