If you have by now decided that you need to make a will, one of the very first decisions is to choose an estate trustee (also known as the executor or administrator). You can name one person, or multiple people to act individually or jointly. The right decision is based on the individual circumstances of your situation, but advice is available from a qualified financial planner with experience in estate planning. Since estates are a provincial matter, one of the first criteria in choosing a trustee is that they reside in your province of residence.
The trustee should also be someone that you trust completely. By making them your trustee, you are trusting that they will carry out your final wishes accurately, promptly, fairly, and honestly.
Your trustee also needs to have the time to dedicate to handling your estate affairs. It might be tempting to appoint someone who had demonstrated success in their chosen line of work, but if they are too busy with their work, family obligations, or community involvements, they might not have adequate time to dedicate to handling your estate in a reasonable amount of time, as a simple estate can be expected to take between 12 and 18 months to complete.
The trustee also needs to be capable. There are administrative and record keeping duties involved in handling an estate. The trustee might have to close out various investment accounts, or expense accounts such as your utilities, credit cards, or your on-line accounts. If the trustee does not personally have the skills to handle these tasks, they might need to engage additional help, or they might not be the right person for the job.
Ask the person if they are willing to be your trustee before you name them in your will. If they decline, you will know right away that you need to pick someone else. If you name them, they still have the right to decline the appointment, so you should also name one or more alternate trustees in your will.
For complex situations or in the absence of a capable and willing individual, a corporate executor is a good option. Trust companies offer corporate executor services which are professional and experienced, and the cost is in line with the standard compensation to which any executor is entitled.
Another important decision in making your will is choosing your beneficiary. This is the person or persons who will receive your money and things (after your debts and bills are all paid). You can choose your family members, friends, charities or even different levels of government to be your beneficiary. Some people are entitled to a portion of your estate, namely a married spouse and your minor dependent children or others who are dependent on you such as adults who are dependent by virtue of physical or mental incapacity. Once you have satisfied your obligations to your dependents, you are free to leave your estate to whoever you want.
It is a good idea to give considerable thought to the distribution of your estate. Some items such as jewelry, artwork, or other collections may have monetary and sentimental value that would be appreciated by one beneficiary and not another. You might want to distribute cash or other financial assets to one or more family members, but it is common for people to leave gifts to charities or their community to provide scholarships, parks, or museums. One last consideration is providing for any pets you might have at the time of your passing.
Now that you have made some important decisions, how do you make a will?
• Decide on your trustee(s) and/or alternates to administer your estate.
• Decide on your beneficiaries.
• Decide what items and/or what amount of your assets will go to each beneficiary.
• Meet with a lawyer to “make the will”.
Since a will is a legal document, it must be properly drawn up and completed in order for it to be legal and enforceable. For this reason, we do not recommend “do it yourself” wills. If your situation is more complex, there may be further details in your will that an experienced estate planner and estate lawyer can help you to consider and address in your will. If you own a corporation, it is advisable to have a second will to deal with it, separate from your regular will.
And then, every once in a while, you should review your will and make updates if and when needed. What happens to your will after you die? Next article will deal with this topic and the responsibilities of the executor.
We hope you will find this information valuable and will increase your financial confidence. You can always find these articles on our website www.actionfinancialgroup.com.
Karin Rimnyak, Certified Financial Planner®
David Dryburgh, Certified Financial Planner®
Ian Barrie, Certified Financial Planner®
This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.