BY: ANDREW STEWART
Hello again, thanks for coming back and reading part two of how a Will can create less confusion for your family after you pass away. Part one touched on how assets such as cash, investment accounts, and property would be handled without a Will being in place. Also, I touched on inheritance to minors and what role the Office of the Children’s Lawyer would play with regards to handling funds and care.
Since an important tool in any estate plan is a Will, there are a few points you should consider in preparing your Will. The first thing is to choose your executor. Whom you choose is key to how your estate will be handled. Your executor should be someone whose judgment you trust, who has good business sense and who will be strong enough to stand up to other family members if difference of opinions should come up. Bitter feuds can result over the division of personal effects. For example, a child may grow up expecting to inherit a particular painting, a piece of jewelry even a favorite book and be shocked to find out that a sibling thought the same thing. If there is any chance that there will be arguments among family members over personal effects, or if you feel strongly that specific articles should go to specific individuals, then your requests should be carefully detailed in your Will.
You should also consider the age of your executor, particularly if your Will provides for ongoing care for your children or others. Remember that you do not have to appoint just one executor. If you wish, you can appoint two or more people to act together to administer your estate. For example, you might name one individual who has business expertise and another person who understands the needs and personalities of your family members.
Most parents with young children are concerned about who will have physical custody of their children if something was to happen to them early in their children’s life. The appointment of a guardian for young children under a Will is binding in Ontario for 90 days from the death of the surviving parent. After that period, it is up to the Court to make a decision as to who the appropriate guardians should be. In doing so, the Court will take into account a parent’s wishes as expressed in a Will. Guardians have a very different role from executors and are confined to dealing with “parenting” matters, such as deciding whether Andrew and Ciara should go to summer camp. The executors then decide whether the estate can afford to send them to summer camp. Depending on the circumstances, it may or may not be appropriate for the guardians to also act as your executors.
Children’s inheritances should be deferred until they are at least eighteen. The temptation for an eighteen-year-old to use an inheritance to buy an expensive car and enjoy an indulgent lifestyle may override any desire to pursue an education or achieve some other worthwhile goal. Being a father myself, my plan is to defer my children’s inheritance until they accomplish key milestones in their lives. Such as graduating from post-secondary education, getting their 1st job in their field of studies. Reaching milestones like those will hopefully keep them on a forward path in life and wanting them to strive for more.
As a family advisor, I always recommend naming a beneficiary on a life insurance policy. But if you name your estate as the beneficiary of your life insurance policy, your executor can use the money to cover any final costs, including your funeral and probate fees. The drawback is that the money will be added to your estate, increasing the probate fees and you lose the creditor protection that a life insurance policy provides.
In most cases, for less than the amount you would spend on a car repair or new furniture, you can take care of these questions by consulting with a lawyer about your Will. Although the chances of an early, tragic end to your life are small, your loved ones will be grateful for your advance planning.