Ways to Give

Why a Will?

Roddick Gates

Plan ahead

Marilyn Piccini Roy, LLB’82, BCL’83

To paraphrase the words of British writer Aldous Huxley, people should not behave as though death were an unfounded rumour. Estate planning is for everyone. Every adult, no matter what age, should have a will.

While estate planning is frequently viewed as being a painful exercise, it is irresponsible not to have a will. Estate planning issues should be considered long before retirement age and before sudden changes in circumstances, such as severe disability or death, which might prevent you from making or changing your will.

You should have a professional guide you with your estate planning and with the preparation of your will. If you resort to doing your own will or using will kits, you may be saving now but paying later.

The key step in estate planning is to compile an inventory of your assets and liabilities. As part of the inventory process, it is important to check beneficiary designations on insurance policies, RRSPs and RRIFs to ensure that they are valid and up-to-date. Except for RRSPs and RRIFs issued by insurance companies, the designation of a beneficiary for an RRSP or RRIF is not valid in Quebec.

The consequences may not be what you intended, because the proceeds of these plans will belong to your estate and not your intended beneficiary who may have been your spouse; the plan proceeds will be subject to tax and the spousal rollover or tax deferral will not be available. It is important, then, to deal with this in your will by including a particular legacy of the proceeds of such plans to your intended beneficiary.

The next step is to identify your objectives, which will depend on various factors, such as your marital status, age, the ages of your family members, the needs of your beneficiaries and their ability to handle their own financial affairs, the current value of your estate, and your tax situation. It is also important to identify the best way of achieving your estate planning objectives, which may include setting up a testamentary trust which could be tax-efficient, insofar as it is taxed at graduated rates. The type of trust chosen will depend on personal circumstances but a discretionary trust provides flexibility as circumstances change.

If you are married with young children, a priority objective – perhaps your single hardest decision – is to name a tutor to your minor children. Such a nomination can be validly made in the will of the last parent to die. Parents often give more attention to the choice of a babysitter than to designating a tutor to assume responsibility for minor children should both parents die. Furthermore, if you die without a will, your spouse will not inherit all your estate but will receive one-third and your children the other two-thirds. This could implicate the involvement of the public curator to look after the rights of your minor children and obtaining authorizations to dispose of assets from the tutorship council or the court.

If you are divorced, separated or in an extended family situation, failure to plan is to plan for the possible eruption of explosive situations that will be ripe for costly legal challenges. If you are not legally married but are in a cohabitation arrangement, your de facto spouse will have no right to inherit from you should you die without a will, regardless of how long you have lived together or whether you co-own property or have joint bank accounts. Without a will, your partner may find herself or himself in co-ownership with your parents or siblings. The only legacy you leave to that spouse is one of pain and resentment.

Whatever your age, estate planning can make life much simpler for your loved ones and heirs by avoiding delays and by minimizing taxation, high costs and complications, as well as reducing the risk of litigation.

Marilyn Piccini Roy is a partner at Robinson Sheppard Shapiro in Montreal practising in the areas of wealth management, estates, trusts, regimes of protective supervision and elder law.

Information on this site is of a general nature and not intended to constitute financial or legal advice. Please consult your income tax, financial and/or legal advisors before arranging a planned gift. All requests for information are confidential.