Why you need a will: It’s about family, not finances

by | Aug 15, 2023 | Financial Tips | 0 comments

According to a survey taken in 2020, over 56% of Canadians don’t have a signed will. That’s over half of Canadians whose assets are in limbo if they pass away tomorrow. Making a will might not be top of mind for you right now, but we want to help you understand why it is important to have a will, and how it can benefit your family and protect your assets in the event of an untimely death. 

Why is it important to have a will?

If you die without having made a will, then the court will appoint someone to administer and distribute your estate, according to the intestacy laws of the province in which you reside. This can be a costly process to undertake. In addition, your wishes for how your assets are distributed may not be honoured. In Ontario, intestacy laws are outlined in the Succession Law Reform Act. Although the Act incorporates a percentage of the estate going to your spouse and any children you may have, there are no specific requests possible without a will.

Specific requests can be beneficial for example, in the case where your children are minors, and there is concern about them receiving their full inheritance at the age of majority. Having a valid will in place allows you to have control and flexibility over how and when your assets are distributed. This is not the case when you die intestate, or, without a will. 

Without a will, your family may also have more tax to pay, which means less funds going directly to your loved ones. This can also cause your family stress if the distribution of your estate becomes costly to administer.

In addition to all of the above, a will provides the opportunity for you to outline your desires for end of life care, funeral arrangements, and other personal assets that may cause division in your family. Having a will in place also protects family relationships and provides clarity and understanding during a time of great emotional distress. 

What do you need to make a will?

Because a will is a binding, legal document, there can be a lot of technical requirements to ensure the document is valid. As a result, it is recommended to work with a lawyer to prepare your estate planning documents. 

Some things you will need to consider when preparing a will include making a list of your assets, and reviewing the ownership of said assets and beneficiaries on your investment contracts. You’ll also need to choose an executor for your estate (someone you can trust), and consider how you’d like your estate to be divided. If you have children, you will need to decide who you want to take care of your children if you and your spouse both pass away. 

Finally, you may wish to outline specific funeral arrangements and end of life care instructions. 

Do I need a power of attorney to make my wishes clear?

Although we all hope to keep all our faculties as we age, many people are diagnosed with dementia, Alzheimer’s, or other health issues which affect decision-making or communicating capacities later in life. As a result, it’s important to make a power of attorney for property and personal care. 

Power of attorney is often made alongside a will and explains a person’s wishes for health decisions or decisions about their finances if they are incapacitated. It also names a person(s) who will make decisions on their behalf.

An attorney for personal care can make decisions about your health care, housing, and other aspects of your life such as meals and clothing. An attorney for property is focused on financial affairs, including paying bills, collecting money owed to you, maintaining or selling your house, and managing your investments.

According to the Ontario government, if you do not have power of attorney set up for your property, your family can’t step in to make financial decisions for you. At this point they would need to go to court to legally become your court-appointed guardian. 

Important note: Appointing someone to be your attorney for property affords them the right to immediately start making decisions about your financial affairs. You can, however, include a statement that your attorney can only make decisions if you become mentally incapable.

What next?

Once you have made a will, it’s important to keep it regularly updated to reflect changes in your life such as marriage, divorce, birth, death, disability, or a new business. Learn more about different types of wills, and other information on creating a will, here on Manulife’s website.

If you have questions about making a will, don’t hesitate to reach out to us here at ACN Financial Group. We’d be happy to help you with any questions you may have.

The information in this article is not to be relied upon as legal, tax, financial, or investment advice for specific situations.