February 08, 2023

Questions to ask when writing your will

By Sun Life Staff

A will protects both your assets and your family. But most Canadians have an out-of-date will – or no will at all. Find out what to think about when you write yours.

Throughout your working life, your top priority has probably been supporting yourself and your family. Your next priority might be to build up your financial worth. How? By buying a home, starting a business, investing in stocks and buying life insurance. Not as precious to you as your family, of course, but valuable nevertheless. And here’s what’s true about both your family and your assets: You want to protect them and make sure they will be in safe hands after you die.

One of the best ways to do this is to write a will and keep it up to date. It’s not the most enjoyable of life’s tasks, but it is one of the most important. It’s also one that a lot of people resist. Nobody likes to think about dying, after all. According to a study by the Financial Consumer Agency of Canada, nearly half of Canadians (45%) don’t have wills. The older you are, the likelier you are to have one, though. Fully 92% of Canadian seniors have a will, while only 22% of those under 35 have one. When you’re younger, having a will is especially important if you have children or other financial dependents. For older Canadians, the bigger challenge may be keeping your will and estate plan up to date. According to the study, more than half (53%) of seniors haven’t updated their wills in the last 5 years.

The story is similar with powers of attorney. According to the study, the older you are, the more likely you are to have one. Overall, about 40% of Canadians have a power of attorney. Among seniors, the percentage rises to 68%. Among those aged 18 to 34, it’s only 19%. Keeping that document up to date is also a challenge. Three-quarters of Canadians with powers of attorney haven’t updated them in the last 5 years.

Are you one of the many Canadians who don’t have an up-to-date will? Or any will at all? Here’s why it’s a good idea to have a will, and what you can put in it.

What’s the difference between a will and a power of attorney?

A power of attorney (POA) gives another person the legal right to act for you if you become mentally or physically unable to act for yourself. There are two types of POA:

  • One is for your property.
  • And the other is for your personal care and health-related decisions. (The name of this second type of document varies slightly among the provinces). 

A will, on the other hand, is about your assets and property. When you die, the things that you own become your “estate.” A will:

  • sets out what you want to happen to that estate, and  
  • can also include instructions for your children’s care and support.

A lawyer will often draw up a POA when preparing your will, as part of a package deal.

What happens if you die without a will?

If you don’t have a will, it’s called dying “intestate.” Without a will, the law decides who manages your estate and who inherits it. The decision won’t be yours or your family’s. This means your estate may not go where you want it to. For example, a larger share may go to your spouse than you wish. Your spouse and any children or other descendants then share the rest. (The rules that apply when you die intestate vary by province.) A clear outline of your wishes, set out in a will, can help avoid family disputes.

What happens to your “stuff” after you die?

The person you name to manage your estate is called the executor. That person is responsible for your estate after your death. That means looking after who gets what and making sure all your debts and taxes are paid. Most people name their spouse as executor and list a family member or close friend as a back-up. You can name more than one person as your executor.

Who will look after your kids?

It’s usual in a will to name guardians for children under the age of majority. That’s 18 or 19, depending on your province or territory. Be sure anyone you name as a guardian for your children agrees to take on the responsibility. It’s also common to set up a trust in your will to support your kids. That means putting someone you trust in charge of the money you leave for your children. The trustee will handle their money for them until they’re old enough to manage it themselves. But, since children are not property, what you say about them in your will isn’t binding. While the courts will give significant weight to your will, they don’t have to follow your wishes. 

What can complicate a will?

Wills can be as simple or as complex as your life is. If you own a business or shares in a private corporation, you need special treatment in a will. Complicated family issues such as second marriages and blended families also need careful thought. One of the biggest mistakes people make is not telling their lawyers their entire family stories. That’s according to Karen Anne Platten, a lawyer who specializes in estate planning and administration.

What do you own — and how do you own it?

Believe it or not, Platten says, people don’t always own what they think they own. You may have sold a property or part of your business years ago, and forgotten about it. “This is important,” she says. “When you are giving assets away, you have to make sure you actually own them."

You can own assets in several ways, including:*

  • Jointly with right of survivorship. You own something (like a house) with someone else. The other person automatically becomes the full owner when you die.
  • Tenants-in-common. You own part of an asset with another person, but you can leave your share to whoever you want.
  • A beneficiary designation. You name the person or people you want your asset to go to when you die. This is common for life insurance policies, registered retirement plans and annuities.

*Not applicable in Quebec.

Who will inherit what?

Dealing fairly with children or other dependents doesn’t always mean dealing with them equally. “I’m seeing less equal distribution these days,” says Platten. “One of my clients had three kids. The life insurance money went to the two younger kids because the eldest had finished university and started working.”

Rather than taking a do-it-yourself approach, it’s a good idea to get professional help. Look for independent legal, accounting and tax advice for your estate planning needs. Sometimes, those professionals advise their clients to divide their estates using percentages rather than fixed dollar amounts. That’s because an estate’s value changes over the years. If you wish to leave more money to someone privately, you can.

When is it a good idea to change your will?

It’s important to keep your will up to date. You may need to change your will any time your life changes because of:

  • Marriage
  • Re-marriage
  • Your separation or divorce
  • Separation or divorce of an adult child
  • Birth or adoption of a child
  • Death of a spouse
  • Death or illness of an executor

The law may force your hand: In some provinces, getting married revokes (cancels) your current will. If you die before drawing up a new will, the courts may treat you as having none at all. On the other hand, getting divorced doesn’t automatically revoke your will. Either way, see your lawyer to make sure your estate will go where you want it to go.

Do you need help with your estate planning? 

Ask your advisor for help from an estate and financial planning specialist. Don’t have an advisor? Find a Sun Life advisor near you.

This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

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