It is one of the most common phrases estate planning lawyers hear from their clients: “I just need a simple will.”
I understand the desire to keep things simple. Often, simple is the best strategy. But the reality is that in today’s world, there are a lot of different factors that may play into your estate plan, and each one adds a level of complexity into the estate planning process.
Different is the new normal
There really is no such thing as a "typical family" anymore. Instead, we see a highly diverse array of family structures. With our increasingly complex living and relationship arrangements, it is more important than ever to take your family's unique circumstances into account when planning for your family's future.
Maybe you have a big, beautiful blended family with children from previous relationships. How do you balance your obligations to your partner and your children? Maybe you have a stepchild that you’ve raised as your own and consider your own—but the law may not. Maybe you have a child or parent that you are estranged from. Maybe you have a child who is disabled or has special needs. Maybe you’ve loaned money to one of your family members and you want that to be accounted for in the distribution of your estate.
All of these are questions that need to be asked, talked through, and considered carefully.
A changing landscape
Even if your family is relatively drama-free, there is the constantly changing legal landscape to take into account. Estate law is always evolving through the court's interpretation of our relatively new Wills, Estates, and Succession Act (enacted in 2014). Tax rules also change regularly as each government that comes into power implements new tax rules and changes old ones in order to incentivize various behaviours.
Do you know the taxes that get triggered if your RRSP goes to your adult child instead of your spouse? Do you know that directly naming your minor children on your life insurance policy can lead to a scenario where your spouse ends up in court, trying to get appointed as trustees of those funds? Do you know that the law may consider you to have two spouses, with potentially competing legal obligations to provide for both on your death? Do you know that if your executor is a US citizen (even if they are living in Canada), your estate can become subject to US taxes?
There are different planning options that can help you reduce your tax liability and leave more of your estate for your family, but it’s impossible to identify the best options without taking the time to understand your family’s financial situation in detail.
More than just a will
Most people need more than a will to adequately distribute their estate and provide for their surviving family members and, often, the majority of your assets will be passed on through other estate planning tools. In fact, there are many assets that you would likely want to pass outside of your estate.
In most cases, it makes sense to have your home, cars, bank accounts and non-registered investments held in joint names with your spouse. It’s also often best to appoint designated beneficiaries on your registered investments and insurance policies, rather than having your ‘estate’ listed as the beneficiary.
These strategies can result in these assets getting transferred much quicker than they would if your family had to wait for the probate process to be completed (which can take a year or longer). It can also save your estate (and, therefore, your beneficiaries) thousands of dollars in probate fees.
Final thoughts
The role of an estate planning lawyer is to get to know you—really get to know you. That means getting a complete picture of your financial situation, understanding your family’s unique dynamics, and talking to you about your goals for the future.
It is virtually impossible to give sound advice and provide real value without taking the time to go through a fact-finding process and coming up with “what-if” scenarios.
All of this takes some time. And it will likely cost more than the “simple will” you may have been looking for. But putting in that extra time and money may mean sparing your family hours of time, thousands of dollars, and endless amounts of headache in the future.