Why Have a Will?
Estate planning is one of the most important steps you can take to provide for your family and loved ones in the event of your death or other unexpected event. When estate planning is done properly, there will be a smooth transfer of your assets to those you wish to benefit. This will save your family money and heartache. Estate planning can also insure that proper safeguards are put in place to insure that beneficiaries have the necessary maturity to deal with the wealth they are receiving.
Proper estate planning is more than just the creation of a well drafted Will. It involves looking at the way ownership of your assets is organized, reviewing your life insurance policies, the beneficiaries of your RRSPs, and your employment pension plans. At Integra Law Group, we do more than prepare Wills, we PLAN your estate.
We will make recommendations to you that will insure that your assets pass to those you want as efficiently and as inexpensively as possible. We point out the strengths and weaknesses of how you have organized the beneficiaries of your life insurance policies and RRSPs. At times, we may recommend that you change the way you have structured the ownership of certain assets so that probate fees and income taxes can be reduced.
What Happens Without a Will?
If you die without a valid Will, the distribution and handling of your estate is governed by pre-set rules which are inflexible. Since you have not named an executor, someone must apply to the Court to be appointed as the administrator of your estate. The administrator may be required by the court to post a bond to insure that your estate is administered and distributed according to the law. If no one applies to act as administrator of your estate, an Administrator may be appointed. While the powers and duties of an administrator may be the same as those of an executor under a Will, the process of administration where there is no Will is more time consuming and costly.
The Will, Estates and Succession Act states how your estate will be distributed if you die without a valid Will. Generally, your spouse and children will be provided for first out of your estate and if you do not have a spouse or children, your estate passes in order of priority to your parents, brothers and sisters, nieces and nephews, and then to your closest blood relatives. If you die leaving no next of kin, your estate passes to the provincial government.
Recent changes to the legislation in British Columbia have changed how an estate is divided. A spouse no longer has the automatic right to stay in the family home, but is given the first $300,000 of the value of the estate and half of the remainder. If you have children from a previous relationship, your spouse will receive $150,000 of the estate and half of the remainder. This may cause complications if your major asset is the house as your spouse may be required to sell the house or go to court to seek permission to delay the sale. If you have children under the age of majority, their share may be held by the public guardian who will charge an administration fee and it could be a tedious process for your spouse or children to access these funds.
If you have been in a “marriage-like” relationship with a person for two years or even if you are married and have a prenuptial agreement, your married or common-law spouse will be entitled to the majority of your estate when you die, whether this was your intention.
If you do not wish your estate to be distributed in the above fashion, you must make a Will.