Understand why a will is important for you and your loved ones. Also, find tips for writing a will.
- Exercising the power in your will
- When the Government makes your will
- An example of an intestate disposition
- An example of when there are no dependents
- Decisions, decisions
- Tax savings
- Probate costs
- What is planned giving?
- Your will is a privilege & a right
- Suggested legal wording for a bequest
Today, exercising seems to be the thing to do, except when it comes to exercising the power in your will. Did you know that nearly 5 in 10 Canadians have not taken advantage of their right to make a Will? These people risk dying without a will. In legal jargon, it is referred to as dying intestate. You might say, “So what! So an intestate estate is settled by the Government.” Think about it…how would you feel if the Government began to tell you how to spend your money? That’s what happens to you when you die intestate.
Many Canadians assume that a will provided by the Government is fair, equitable and a no nonsense sort of thing. However, they forget that the law was written in a general way, and that the legislators could not anticipate the infinite number of circumstances presented by millions of Canadians. Without a will, in essence, the Government assumes the role of the deceased and decides how the estate is to be distributed.
Dolores Smith, 42, was the main breadwinner in the family. She was killed in an auto accident, leaving her husband, Tom, and two minor children. There was no will. Dolores felt a will was a premonition of death. So she refused to make one. Naturally, Tom assumed that her half of the estate would transfer to him. He was only half right. The house and chequing accounts, both held jointly, became Tom’s property. However, the remaining $150,000 from securities and real estate was a different story.
After paying any debts, death taxes, probate and legal fees under BC law, Tom would receive the first $65,000. The residue of the estate will be divided between Tom and his children. Tom would receive one third and each child would receive one third. Tom would find it difficult getting access to the children’s funds, and therefore, would have to pay for living expenses with only one third of the residue of the estate.
Although this is just an example, many surviving spouses find themselves in this all too real situation.
Tony Jones, 69, was a widower with no children. He destroyed his old will when his wife died, and never made a new one. Tony died of a stroke, leaving an estate of $120,000.
According to the Government, Tony’s three nieces (his late sister’s children) will share the estate equally. One of the nieces, Florence, remained close to Tony all his life. The others moved away and forgot about him. Under the law, all would receive equal treatment regardless of any circumstances. Without a will, the courts do not know who or what charities Tony favoured.
A will is a legal document that enables you to maintain control of your money even after you’ve died. Making a will is not complicated. You only have three decisions to make.
1. The first decision is to name your executor. Your executor will manage and distribute your estate as you have directed in your will. Be careful to choose wisely. Settling an estate might require specific talents. An executor is also entitled to charge for services rendered. Remember that without a will, the Government will appoint an executor, perhaps someone you would not have selected.
2. The second decision is to select a guardian for any minor children, in the event your spouse does not survive you. The courts take into account the deceased’s wishes as stipulated in the will. Without a will, the courts will not know your intentions.
3. Finally, you make the decision on how to distribute portions of your estate among family, friends and charities closest to your heart. This is known as Planned Giving. It’s your last chance to support the Catholic Church and perpetuate the good works of your lifetime.
An accurate and properly prepared will can help the testator (maker of the will) avoid or defer some, or all, of these taxes. Leaving assets to a spouse will effectively defer tax until the death of your spouse. Leaving gifts to a registered charitable organization such as the Catholic Church will reduce taxes upon your death.
These are just two simple ways to save taxes. There are other ways to save taxes; however, careful planning with your lawyer is needed to prevent any costly mistakes.
In essence, Probate fees are another form of taxation. Probate is the fee charged by the Government to settle the estate in court. The general practise is to charge a dollar value per $1,000.00 of estate, e.g., $14.00 per $1,000.00. One way to lower your probate cost is by leaving a gift now, thus you can avoid costly probate and maximize your annual tax deduction while carrying forward the balance not yet deducted. Ask your lawyer and accountant for details.
Planned giving is the act of providing a gift from your estate to your favourite charity. Generally, this is accomplished through a bequest in your will. A bequest is just a clause in your will that addresses your intentions. You can arrange to bequeath a specific dollar value, a specific property or asset, a percentage of the residual of your estate or just the residual. In essence, a bequest becomes a living memorial in the continuing works.
A bequest can be added to an existing will by having your lawyer attach a codicil. Codicil is simply legal jargon for an amendment.
Exercising the power in your will is a privilege and a right as a Canadian citizen. Don’t relinquish your rights to the Government. If you don’t have a will, contact your lawyer soon and make one. If you do have a will, contact your lawyer to review and update it. Don’t delay…
Confused? Don’t be! Preparing a will is as simple as telling time. So now’s the time to do it! Call your lawyer today for an appointment to make your will. Remember a will is nothing more than a final gesture of love and concern for your family.
To ensure that there will be no difficulty understanding your intentions, the following is the suggested legal text when leaving a bequest:
|I give and bequeath to The Roman Catholic Archbishop of Vancouver, incorporated under a special Act of the Legislative Assembly of British Columbia, and whose offices are located in the City of Vancouver, British Columbia|
|for||its religious, educational or
|or||for the benefit of a particular
parish / school / agency
(insert appropriate name)
|the sum of _________________ dollars|
|or||___________ % of my residue estate|
|or||the total of my residue estate|