Why Making a Will Should Be Part of Your Financial Plan
By Erin Bury, Willful
If there is any word to describe 2020, it would be “unexpected.” Between the economic and health impacts of the COVID-19 pandemic, this year has led many Canadians to rethink their financial plans. Yet, one commonly overlooked step in financial planning is making a will. Many people believe that you only need a will if you’re older or wealthy, but the truth is that making a will is one of the best ways to protect your assets and loved ones, regardless of your age and financial situation.
Here are some basics about wills, and why you should make estate planning part of your financial plan.
What is a will?
Your last will and testament is a legal document that outlines how your assets are distributed when you pass away, and how your minor children and pets are cared for. Your will is also where you name your executor, the person who will be in charge of settling your affairs on your behalf.
Why do I need a will?
If we’ve learned anything in 2020, it is that we should always be prepared for the unexpected. A will helps you do that by protecting your assets and loved ones in the event of your death. By making a will, you’re able to designate beneficiaries for anything you own, including property and financial assets. It also allows you to choose guardians for your minor dependents and pets if you pass away unexpectedly.
If you die without a will, you’re considered to have died “intestate”. This means that the courts will appoint your executor, use provincial rules to divide your estate, and decide on a guardian for your minor dependents. Exactly what happens with your estate can vary from province to province and it may end up being very different from what you would have wanted. No matter how few assets you have, you’ve worked hard to earn them- so it’s important to protect them by including them in your estate plan.
In addition to protecting your assets, having a properly structured will can help minimize taxes upon your death, leaving more money in the pockets of your beneficiaries.
How can I make a will?
In Canada, there are several ways to make a will and it’s easier than it may seem. Some options for creating a will in Canada include:
- Online Will Software, like Willful – An online will platform like Willful walks you through the estate planning process, so you can easily complete a customized will from the comfort of your home.
- DIY Will Kits – A DIY will kit is a printed fill-in-the-blank document that allows you to fill in the key information about your estate.
- Lawyer-drafted Wills – Estate lawyers are trained in estate law and give advice on any aspect of your situation, making them ideal for complex estates.
- Holograph Wills – A holograph will is a will that is written by you without the aid of any mechanical process. It must be handwritten and signed by you, and it is the only type of will that does not require the signatures of two witnesses.
It’s important to note that Canadian law does not require you to create your will with a lawyer or notary. A will is legally-valid if your will was written by you, of sound mind, signed in wet ink in the presence of two witnesses, and stored offline as a physical document.
If there is anything you should take away from this article, it’s that a will should be top-of-mind when you make your financial plan, even when there is no pandemic. Life is unpredictable, but having a will can help us prepare for the unexpected and protect our assets and loved ones from future complications
About the Author
Erin Bury is the CEO of Willful, an online estate planning platform that makes it affordable, easy, and convenient to create your will and power of attorney documents in less than 20 minutes.