Wills

What is a Will?

A Will is a formal legal document in which you make important decisions that will come into effect on your death.  You appoint an Executor to settle your affairs, Trustee of any trust funds for beneficiaries who are not old enough to receive an inheritance, Guardian of your minor children and set out how your assets will be divided among your beneficiaries.

Why Should I Make a Will?

If you don't have a Will then decisions about who looks after your estate, who looks after your children, who receives your estate, who trust funds for minor children will be managed and how old your children will be before they receive an inheritance are determined by government legislation and the courts.

In your Will you get to choose:

• The Executor to look after your estate;
• The Trustee to look after money held in trust for minors, young adults and disabled beneficiaries;
• The Guardian to look after your minor children;
• Back ups for the Executor, Trustee and Guardian if your first choice has died or is not able to to the job;
• Who will receive your estate (you can give out specific assets, cash gifts, just divide up the net value of your estate into shares or a combination of all three);
• The age your children will receive their inheritance; without a Will, they will receive their share of your estate when they turn 19, you may want their inheritance to be held in trust for them until they or older (for example 21 or 25); and
• How the Trustee will manage your children's inheritance and what kinds of expenses can be paid from their trust funds (for example, assisting the Guardian with the costs of raising your children, paying for education, etc.).

A Will makes it much easier for your family to look after your estate.  If you don't have a Will then your next of kin has to apply to court to be appointed as the Administrator of your estate.  If you have creditors then next of kin needs to get their approval to the court appointment or purchase a bond for the value of the estate.  Also, many institutions such as banks, credit unions, vehicle registries, funeral homes, life insurance companies will immediately deal with your Executor after your death if you have a Will but will not deal with your family if you do not have a Will until the court has appointed someone as Administrator (this usually takes several months).  An Executor of a well drafted Will has a lot more authority to deal with your estate than a court appointed Administrator.  Accordingly, an Executor will have more tools and ability to deal with problems involving your estate.

A Will makes it less expensive for your family to look after your estate.

A Will may be able to reduce the amount of tax paid by your estate and family.

A Will can protect your children's inheritance from creditors, claims by the government for claw-back of benefits (such as disability payments), and even protect a child's inheritance from a future separation (separation of your child and his or her spouse).

What Happens if I Die Without a Will?

If you die without a Will, one of your next of kin must apply to the British Columbia Supreme Court to be appointed the Administrator of your estate. Until such time as the Administrator is appointed your assets are deemed to be held by the province. If no one applies to act as Administrator of your estate, the Public Guardian and Trustee of British Columbia will be appointed as your Administrator. The process of Administration is far more time consuming and costly than the process of probating a Will.

Once the Administrator is appointed, your estate will be divided among your relatives in a pre-determined manner. If you die leaving only a spouse, all of your estate will pass to that spouse. If you die leaving a spouse and one child, the spouse will get a life interest in your home and its contents, (if it was not held in joint tenancy) together with the first $65,000.00 of your assets and the balance will be divided one half to your spouse and one half to your child. If you die leaving a spouse and more than one child, the initial distribution is the same and the remainder of the estate is divided one third to the spouse and the remaining two thirds equally among the children. The funds payable to a child will be held in trust by the Public Guardian and Trustee and paid in full to the child at the age of 19. If you die without leaving a spouse or children, your estate will pass to your next of kin, being, in order, your parents, then your brothers and sisters, then your other closest relatives.

How do I Make a "Legal" Will?

To be "legal", a Will must be signed properly and be made voluntarily by an adult who is mentally competent.  The British Columbia Wills Act states that in order to be valid, a Will must be:

• In writing;
• Signed at the end by the person making the Will in the presence of two adult witnesses; and
• The two witnesses must then both sign in the presence of the person making the Will.

Accordingly, there are many options for making a "Legal" Will;

• You can do it yourself simply using a piece of paper and a pen or typing up your wishes and printing them out using a computer;
• You can purchase a "Legal Will Kit" (pre-printed forms, computer software or internet based);
• You can hire a Lawyer or Notary Public.

However, you want more than for your Will to be "legal", you want a properly drafted Will.

A properly drafted Will is one will avoid legal problems, unnecessary costs and fighting among your family members after you have died.  Preparing a Will is not some special procedure that only a lawyer can do.  It is similar to working on your house or car.  Depending on the complexity of the situation, you may be quite capable of doing it yourself.  However, it is usually worthwhile to hire an experienced professional who does this type of work every day.  This will save you a lot of your own valuable time and give you piece the piece of mind that the work has been done properly.  Also, sometimes you are not even aware that you have a problem, an experienced Wills lawyer will be able to "trouble shoot" your estate plan in addition to preparing a Will for you.

Are Legal Will Kits "Legal"?

You are bombarded with advertisements for Legal Will Kits, and you can find them in many places. You just want a simple Will. Should you buy a Legal Will Kit?

There is a misconception that a “legal” Will means a good Will. All you need to create a legal Will is to take a piece of paper, write down who you want to look after your estate and who you want to receive your estate, sign it at the end and have your signature witnessed by two adults. Most Legal Will Kits are not much more than that. In addition, most home-made Wills have some flaws (but they are still legal). Some common mistakes:

• Failure to name a guardian of minor children.
• Failure to create proper trusts for children. Money given to a minor in a Will must be handed over to the provincial government to manage it for the child.
• Failure to deal with all of your assets. This will lead to a partial intestacy and cause additional court procedures.
• Failure to deal with future contingencies such as having additional children or your spouse or a child dying before you.
• Failure to deal with the fact that some of your estate may pass to beneficiaries outside of your Will (for example jointly owned property, RRSPs and life insurance pass directly to the joint owner or named beneficiary on death).
• Failure to take into consideration the tax consequences of your death (for example: you will cause problems if you give your estate worth $100,000 to your daughter in your Will and leave a $100,000 RRSP, if you don’t take steps to deal with the $45,000 in tax on your RRSP).
• Drafting confusing gifts which can cause delays, increase costs for your executor and family and possibly start fights between your loved ones.
• Incorrect signing and witnessing of the Will or failure to have a proper witnessing clause.

It doesn’t cost much to make a good Will using an experienced Wills & Estates lawyer.  Dealing with complications caused by poorly drafted Wills costs a lot more. A minor problem could add $500 to the cost of probating a Will. Big problems can lead to court applications to get a judge’s interpretation of the Will or court battles between family members.

Should I Hire a Lawyer or Notary Public?

Lawyers are regulated by the Law Society of British Columbia.  Notaries Public are regulated by the Society of Notaries Public of British Columbia.  Both Societies are subject to the laws of British Columbia.  Notaries are limited to providing services specified in section 18 of the British Columbia Notaries Act.  Lawyers do not have any limitation on the type of legal services they can provide or Wills they can prepare.

Lawyers and Notaries are both able to prepare simple Wills, Enduring Power of Attorney and Representation Agreements.  If your circumstances and wishes are simple and all of your children and other intended beneficiaries are old enough to receive an inheritance immediately upon your death (none of them are minors, financially irresponsible or disabled) then a Notary should be equally capable of preparing your Will as a Lawyer.

If you have young children, want to give money to a disabled beneficiary or your circumstances or wishes are complicated, you should have an experienced Wills Lawyer prepare your Will.

Does a Will Cover all my Assets?

No.  Your Will only covers your estate.  Your estate consists of assets you own solely in your own name and assets such as life insurance, RRSP/RRIFs, and pension benefits for which you have designated your "estate" as your beneficiary (or if your named beneficiary dies before you or you have not named a beneficiary at all).  Some of your most valuable assets may not be controlled at all by your Will.

Jointly Owned Assets.  Assets you own jointly with one or more other people will not become part of your estate on your death,  instead they will become the property of the surviving joint owner(s).  For example, a typical married couple owns their home together as "Joint Tenants".  If the husband dies first then the wife automatically receives his share of the house.  All she needs to do is file a death certificate at the Land Titles Office.   This is called the "right of survivorship".  This rule applies to all jointly owned assets including real estate, bank accounts, investments, vehicles.  Long term married couples should own all of their major assets jointly unless they have a good reason not to for any specific asset.

Beneficiary Designations.  Life Insurance, RRSP/RRIF accounts and pensions all let you appoint a beneficiary for the asset (their are some restrictions on beneficiary designations for pensions).  The person you name as your beneficiary will receive the asset automatically on your death.  For example if a man names his wife as the beneficiary of his life insurance at work then on his death, the death benefit will be paid directly to the wife.  All she has to do if provide a death certificate and fill out some paperwork for the life insurance company.  The payment of life insurance usually happens quite quickly.  Long term married couples should make sure they have each named each other as beneficiaries of all of their life insurance policies, RRSP/RRIF accounts, and pensions benefits.

A Will is only part of your Retirement Plan

For more information

Estate, Financial & Retirement Planning

Wills & Estates Planning Guide.

Guides & Forms

Wills & Estates Planning Guide

Links

"Writing Your Will" --  the People's Law School

"Being an Executor" - the People's Law School

Wills & Estates -- Canadian Bar Association - British Columbia

UBC Law Students' Legal Advice Program Manual - Wills and Estates

Dwayne Pommer Law
578 Central Street East, Prince George, BC  V2M 3B7
phone (250) 564-5300 - toll free 1-866-333-WILL (9455) - fax (local & toll free) 1-866-342-9586

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