Key Parts of a Will
One of the most crucial decisions you can make in your Will is the appointing of your executor. The executor is the person who will oversee your estate after your death and will make sure that your wishes set out in your Will are followed. They are responsible for your funeral arrangements, safeguarding your assets, and administering any trusts which you set up under your Will. An executor has a great deal of responsibility and needs some organizational skills.
Your executor will become the legal owner of all your assets when you die. They are then responsible for passing on these assets to your beneficiaries. They will make crucial decisions and it is important that your executor have a good judgment, business sense and be able to relate well with the members of your family. Accordingly, your choice of an executor is very important. You should also choose an alternative executor in case your first executor is not able to do the task because of illness, incompetence or death. Failure to appoint an alternative executor can result in unnecessary cost and delay in the handling of your estate.
You can appoint more than one person to act as your executors. However, you then need to ensure that the persons appointed can work together as all decisions must be by consensus. As well, both executors’ signatures will be required on numerous documents. As a result, appointing executors in different locations of the country will result in some delay in obtaining necessary signatures.
If you have minor children (In British Columbia children under the age of nineteen are considered minors) you will need to appoint a guardian for that child. Even an eighteen year old needs a guardian who will have the legal right to make decisions and sign documents for that child. A guardian has the responsibility to make decisions regarding your children’s health care and decisions regarding their care and upbringing, including education. In the event that you are gone, they are the ones who will bear the responsibility of raising your children.
Failure to appoint guardians will result in the Public Trustee and Ministry for Children and Families becoming the guardians of your under-aged children. If you have minor children, the appointing of guardians in your Will is extremely important. You should check with people before naming them as guardians to ensure that they are prepared to accept the responsibility of caring for your children in the event of your death. As well, you should provide for alternate guardians in case the persons you have appointed are unable to do the job.
Your Will outlines who is to receive your assets when you pass away and at what time they will receive those assets. If you have children, you may wish to set up trust provisions where your executor will hold assets in trust for your children until they reach majority or an age when you think they will be more responsible, such as 25 years. Prior to your children turning 25 years old, your executor (or another person named as trustee) can use the money to pay for that child’s education, upbringing, health care, etc. When your child turns 25 years old, he or she would receive the money being held in trust.
A trust is created when someone holds property for the use, benefit and enjoyment of another person. The person holding the property is known as the “trustee” and the person receiving the benefit of that property is known as the “beneficiary”.
You may also wish to give certain money to charities or other organizations such as the B.C. Heart and Stroke Foundation, your church, or other similar organizations.
In deciding who is to receive your assets you should consider the possibility that the beneficiary you have chosen may die before you. If that would happen you should specify in your Will who is then to receive those assets. The Wills, Estates and Succession Act of B.C. has a number of rules that may apply when a beneficiary predeceases you if you don’t specify this in your Will.
If you have beneficiaries who are receiving certain disability benefits or other Government Pension, you may wish to organize your gift to that beneficiary to ensure they do not lose any of those benefits. The giving of a lump sum amount to a mentally disabled adult may result in that person losing all of their government benefits. It is often better for you to set up a discretionary trust for that mentally disabled adult so that they can receive their regular monthly pensions from the government and have your estate top up their benefit as required.
If some of your beneficiaries are under the age of 19 years (eg. Grandchildren or nieces and nephews), you will need to make sure trust provisions are in place for those minor beneficiaries, otherwise that child’s gift will need to be paid to the Public Trustee. The Public Trustee will then hold that gift for that minor beneficiary until he or she turns 19 years of age.
PERSONAL PROPERTY AND HOUSEHOLD ITEMS
If you wish to make specific gifts of personal property such as household furnishings or family heirlooms, you can reference these by creating a signed memorandum that is filed with the Will and can only be changed by updating your Will. A more flexible option is to create a wish list that you provide to your executor and they can then use this to divide your household items. The more valuable the item and more likely your gift may be contentious within your family may assist you in determining which path is best.
The administrative provisions of your Will outline what your executor can and cannot do with your assets. They deal with items such as:
the power to sell or delay the selling of your assets;
- investment powers of trustees;
- the claiming of compensation for doing the job of executor;
- the ability to make certain decisions concerning your final income tax returns;
- distribution of your physical assets (eg. Household items, personal effects etc.); and
- accepting of receipts from non-profit organizations, etc.
If you own an company, your will can also provide specific directions to your executor on how to handle corporate decisions and what actions to take until such time as your company is sold or passed onto your beneficiaries.
You can indicate your funeral wishes such as cremation or burial in your Will as well as what sort of ceremony, if any, you would like. The wishes spelled out in your Will are binding on your executor. However, you should tell your family and your executor in advance what your funeral wishes are as sometimes people do not look at your Will until after your funeral.
It is often helpful to make arrangements for your funeral in advance. By doing this, you may be able to obtain better pricing for your funeral and make it easier for your loved ones in a solemn time. Even if you do not wish to purchase a pre-paid funeral plan, you may want to do some investigations and leave instructions to your executor concerning which funeral home you believe would be appropriate for you.