What is a will?
A will is a written document, properly signed, which:
- specifies who is to administer the estate (the executor)
- specifies what is to happen with the assets and liabilities of the estate
- specifies certain other wishes such as guardianship of children and burial instructions
- takes effect only upon the individual's passing.
The effect of the will is to provide a court approved authority (probate) to an individual(s) or a trust company to sign documentation on behalf of a deceased and to give direction how to deal with the estate.
We don't always sign for ourselves
In order to transfer assets or enter into contracts, different individuals may sign on behalf of a person. At birth, we don't have the legal power to enter into a contract. Normally parents or a guardian sign documents on our behalf until we are of legal age. At that point in time, we are entitled to sign for ourselves. If we become physically or mentally incapable, a power of attorney, (if one exists) or a person designated by law is entitled to sign on our behalf. Similarly, after our passing, someone is appointed to continue to sign on our behalf. The individual is identified as an executor if there is a will or to an administrator if there is not a will. Recently, the law of Ontario changed the official designation of executor and administrator to a trustee with or without a will; however, as most people are familiar with the term executor and administrator, we will use the old familiar terminology.
What is a living will?
A living will is a written document that is more similar to a power of attorney than a will. Its purpose is to give the written authority to another individual(s) to authorize certain medical related events. An example might be to authorize the removal of life sustaining mechanical support systems. The living will does not deal with assets and liabilities.
Why is a will a good idea?
Our laws provide for the possibility that individuals do not have a will; BUT the results determined by law dealing without a will (an intestacy) may not be the results that you would prefer. Therefore, it is a good idea to have a will to:
- choose who will be your executor(s)
- choose who is to receive the benefit of your estate
- indicate who you would prefer to look after your minor children
- specify other personal instructions that you may wish to make
- specify an age for beneficiaries to receive their inheritance, that is over the age of majority (discussed later under beneficiaries.)
A will makes things procedurally easier and states your personal wishes.
What if I don't have a will?
Usually a spouse or relative would obtain a court authorized authority to deal with your estate as prescribed by the appropriate statute. In the event that there is not a spouse or relative or associate that is prepared to deal with the estate, a government appointed Public Trustee will deal with the estate. It may take longer to distribute the assets of the estate and be more costly to administer.
What does a will cover?
A well drafted will should cover all of your assets and liabilities. There is the ability to have the will apply to other provinces and other jurisdictions (a state or country). Outside of Canada care should be taken to ensure that a will principally designed to deal with an estate in one province will also operate effectively in the other jurisdiction. Within Canada, a will properly executed in one province will usually be acceptable for dealing with assets and liabilities in another province.
When does my will take effect?
Only at your death. A will can be written many years prior to your death; however, it is only effective at the time of your death. While alive, you may deal with your assets and liabilities and ignore the terms of your will. A will should be reviewed every five to ten years, to make appropriate revisions. A will can be revoked at any time by simply tearing up and disposing of the original will or you can sign a document that revokes a will. A new will always revokes a previous will so that the most recently dated will is the effective will.
Copyright © 2011 AdvisorNet Communications Inc. All rights reserved. This article is provided for informational purposes only and is based on the perspectives and opinions of the owners and writers only. The information provided is not intended to provide specific financial advice. It is strongly recommended that the reader seek qualified professional advice before making any financial decisions based on anything discussed in this article. This article is not to be copied or republished in any format for any reason without the written permission of the AdvisorNet Communications. The publisher does not guarantee the accuracy of the information and is not liable in any way for any error or omission.