Why do I need a will?
While all adults should have one, the following are some key factors that mean you especially need to create a will:
- You recently got married or remarried
- You are currently in a common-law marriage
- You recently went through a common-law separation or divorce
- You have assets such as a home or multiple properties
- You have a child(ren) and/or other dependants
- You own valuable heirlooms such as art or jewelry
- You have assets that as a result of your death may cause tension among surviving family
- You own a business or investments
- You have a cause that really matters to you that you wish to donate to after you pass away
If you were to die without a will, you are considered to have died “intestate” which means that your property will be divided according to the laws of the province or territory you live in. The court will also decide on a guardian if you have minor children and an executor to distribute your assets. They may not choose the people you would have wanted for these roles. It’s easy to prevent this from happening by using an online will service if you have a simple and straightforward estate, or visiting a lawyer if you need legal advice or have a complex estate.
At SafeBridge we’ve partnered with Willful, a Toronto-based company that helps you create a will and Power of Attorney documents online – they’ve worked with estate lawyers in each province to create their documents, and remove the barriers involved in getting a will (namely, cost and convenience).
Mortgages and Estate Planning
If you fit into the category “have assets such as a home or multiple properties” mentioned above, it’s particularly important to make a plan to protect your property. If you have a property you want to gift to a specific person, it’s important that you outline these wishes in your legal will.
You might also be wondering what happens to any debt associated with your property (a lot of people fear that their debt will be passed on to their family) – the good news is that in Canada, the mortgage stays with the home, not the person. This doesn’t mean that it goes away if you pass away. If you’re the sole owner of the property and mortgage, it will be paid from your estate. It’s a good idea to specify if you want the estate to pay off any debts on the property so the person inheriting it is free and clear if that is your intention. If you bought property jointly with your spouse, in most cases they would take over the mortgage and the financial institution may reassess the terms depending on the situation.
But what if I have life insurance?
Do I still need a will?
A common misconception is that if you have life insurance you don’t need a will because your loved ones will be financially protected. Some people also believe their life insurance is included in their estate by default – which typically isn’t the case. Life insurance policies are generally known as a non-probate asset, which means that it can be passed directly to a person without being included in your will.
The proceeds from your life insurance can absolutely help financially support your beneficiaries, but a will is still needed because it provides support to you and your loved ones that goes beyond finances. A legal will is required to name your executor, guardians for minor children, and distribute your estate (property and assets) according to your wishes, and it can also include optional information like funeral wishes.
In the event of a medical emergency
Beyond your Last Will and Testament, every adult should have Power of Attorney documents in place. While the name of these documents vary from province to province, the purpose is similar: if you become incapacitated, who can speak and act on your behalf?
In Ontario, there are two types of powers of attorney – one for property and one for personal care (which allows someone to make medical decisions on your behalf). Your Attorney for Property has the ability to make financial decisions on your behalf including paying your bills, managing your investments, collecting money that’s owed to you, or selling the home if needed. Your Attorney is required to manage your property for your benefit and can be asked to account for and explain how they’re managing it. With a POA you also have the ability to create limitations for your attorney that outline exactly what they’re allowed to do and when. A POA for property is a helpful tool that helps to prevent consequences such as missed payments or your mortgage falling into arrears if you are unable to make payments yourself.
Keep it updated
It’s a good practice to review your financial and estate plans regularly. You’ll want to understand what debts will have to be paid and what your insurance policies will cover before you are able to divvy up your assets. It’s good practice to review the people included in your plan such as beneficiaries, your executor, your attorneys and any guardians you’ve named for minor children every year or anytime you experience a major life change. Make sure they are comfortable with these crucial and potentially life-altering roles. They should know about your important accounts, investments, properties and the documents they might need access to in order to represent you and your wishes.
Whether you create your estate plan using a lawyer or an online platform like our partners at Willful, having a plan in place is key to protecting your loved ones from any stress and complications that arise from dying without a will. Willful wants to help the 57% of Canadians who don’t have a will get one in place.
Making a will online using Willful takes less than 20 minutes and you can use promo code SAFEBRIDGE to save $15 on any Willful plan.