As a Wills & Estates lawyer here in Ontario, one of the questions I get asked most often is, “Do I really need a Will?”. If you’re young, or feel you don’t have substantial assets, it might seem like something you can put off. However, having a valid Will is crucial for everyone. In our first blog post, I’ll walk you through the top three reasons why having a Will is essential for you and your loved ones.
Flexibility
Without a Will, you lose the ability to decide who inherits your assets. Instead, provincial legislation determines how your property and possessions (your “estate”) is distributed—and that may not align with your wishes. For example, in Ontario, a common-law partner is not automatically entitled to inherit, regardless of the length of your relationship. This can come as a shock to unmarried couples in long-term relationships.
You also lose the ability to choose your Estate Trustee—the person responsible for administering your estate. In the absence of a Will, the court will appoint someone to this role. The role of Estate Trustee requires a significant amount of time and effort and you should put careful consideration in determining who you’d like to act for you in this role. Not having a Will means that the court may appoint someone that you may not have chosen, or do not think would be a good fit for the position.
Certainty
A well-drafted Will allows you to clearly outline your wishes, removing uncertainty for your loved ones. For example, you can name a custodian for your minor children in your Will. This person will be responsible for their care and upbringing should something happen to you and the other parent. While the courts in Ontario always makes the final decision regarding custody based on the child’s best interests, your clearly stated wishes in your Will are given significant weight.
You can also setup a trust for your minor children, ensuring that the money you leave them will be spent wisely and given to them when they reach a certain age rather than a single lump sum at the legal age of majority, 18, when they may not be ready to handle it responsibly. The very act of creating a Will also encourages important reflection and conversations with your family about your wishes, preparing them and providing peace of mind.
Tax Planning
Death has significant tax implications in Canada. The Income Tax Act includes a “deemed disposition” rule which treats most of your assets as if they were sold immediately before your death at their fair market value. This can trigger significant capital gains taxes, resulting in a large tax bill on your terminal return. However, an exception to this deemed disposition are assets left to a spouse that qualify for a spousal rollover, which allows for the gains to be deferred till the spouse dies or sell the asset.
A well-drafted Will can help you manage and potentially reduce these tax liabilities, both at the time of your passing and in the long term. Strategic estate planning can help preserve more of your assets for the people and causes you care about.
In short, think of your Will as your voice after you’re gone. It ensures your wishes are respected, provides clarity for your loved ones, and can help protect the value of your estate. In our next blog, I’ll discuss what happens when someone passes away without a Will in Ontario. Stay tuned!
Please note the information provided above is for informational purposes only and is not legal advice. At Vireo Law, we provide custom made estate planning solutions. For professional guidance, contact us at info@vireolaw.ca or call (647) 982-8466.