A legal Will is critical to ensuring that the distribution of one’s wealth is carried out according to their wishes after death. It’s not a legal requirement to have one but without a legal Will, an individual’s estate is divided as per provincial law1. This can result in distribution that is not aligned with the deceased individual’s intentions, particularly if these laws were not expected or understood2. For example, a person’s next of kin may not be who they think it is, as this designation depends on their marital status, dependents and province of residence. In these cases, surprises are generally unwelcomed and can be a cause of great stress to surviving partners or family members.
Every Canadian should have a current legal Will, but it’s particularly important to have one when substantial wealth is involved. An investor’s legacy cannot be carried out according to their wishes without specific direction that is legally documented in a Will. Once that document is in place, it should be updated as needed to remain current and accurate. Here’s a brief overview of when an investor should review and potentially update their Will.
When one’s life or relationships change
Life changes, and so should one’s will. This may be in response to a marriage or divorce, the birth of a child, the death of a spouse or other beneficiary, the purchase or sale of a property or business, or simply a change in personal relationships. If an investor has laid out personal preferences in a legal will, chances are those choices will need review after any significant change to one’s wealth, family, business or marital status.
When legislation changes
Because Wills are often reflective of provincial law, it’s best to stay abreast of legislative changes in your region. In Quebec, if a person dies without a legal Will their estate becomes an intestate succession, meaning that all assets are divided as per provincial law. Children, spouses, common-law partners all have different rights and will receive an inheritance based on their “rank” in the family order. For example, if a person leaves behind a spouse and no children, their estate will go entirely to the spouse (even if separated). If there are surviving children over age 18 but no spouse, the deceased’s children inherit the estate in equal amounts. This is not always reflective of the deceased person’s intent, as we all know that families are complicated.
If both a spouse and adult children remain as surviving relatives, the estate is divided ⅓ to the spouse and ⅔ divided between all living children3. There are additional scenarios, such as when there is no living spouse or children, when an adult child has predeceased the individual whose estate is in question but left behind living children of their own, or when the deceased individual’s siblings or other relatives are considered next of kin. In an intestate succession scenario, non-family members are not considered for inheritance. It’s complex and mechanical, rather than personalized – another reason to document your wishes clearly in a legal Will.
When significant time has passed
When life gets busy, updating a Will isn’t always top of mind. For this reason, it’s ideal to review your legal Will every couple of years regardless of situation, laws and relationships. While it’s possible that no changes are required, it’s not guaranteed. Better safe than sorry, in this case – a little time is well worth the assurance that your legacy will be left as intended.
To learn more about this subject or to speak to Nader Hamid about your financial and estate plan, please contact us.