A significant event or change in your family, or in your business or asset ownership also marks a time when you need to revisit your will.

Do you have a will? When was the last time that you reviewed and amended it to reflect the changing circumstances in your life? While everyone knows that having a will is an important part of their financial planning, a surprisingly high percentage of people die each year without a will or their existing will is found to be invalid.

When properly prepared, a will provides for the distribution of property to your beneficiaries, the administration of the estate and appointment of a representative (the executor) to carry out these responsibilities. A will ensures that your estate passes to the people whom you want to have these assets. If you don't leave a will, this may not happen and your estate could end up being complicated and expensive for your family to handle.

Providing for Your Children

If you have children, does your will consider what would happen if both parents should die in a common accident or one parent dies shortly after the other? Often the will includes a survivorship or common disaster clause in contemplation of this event as well as sets out the names of the guardians for the children. While most potential guardians accept the responsibility when the parents request that they be named, they may think that the chances of their actually having to assume this role are unlikely. In choosing the guardians, consider:

• Have your appointed guardians carefully considered their responsibilities should they have to assume this role?
• Are they young enough to raise your children?
• Have you named alternative guardians should they be unable to assume the responsibility at the time of your death?
• The will should also set out your wishes for your children's upbringing and how their financial needs are to be met. In determining the funds that will be needed for the guardians to raise your children:
• What financial means will be left to raise the children?
• How are the estate assets to be distributed and managed, including the home, furnishings, and other assets such as cars, investments, real estate holdings, and life insurance proceeds?
• Will all the assets be liquidated and funds distributed or are certain assets, such as the family home or cottage, to be gifted to children who are near the age of majority?
• What will happen to liquid funds; that is, is the money to be placed in a trust or be given to the guardians?
• Who will be the trustee for the children? Who will be the executor of the will?

The Trustee

Often a will sets out that a testamentary trust is to be created and a trustee appointed to manage the estate to the benefit of the children as beneficiaries. As the trustees will hold the assets, they must have the appropriate powers to deal with those assets according to your wishes. The trustees' powers are specified in provincial legislation; however, the will may broaden or narrow the powers given to the trustees by law. These provisions may be very important if your children are young and the financing of their futures would stretch from pre-school childcare, elementary and secondary school through to their post secondary education.

Trustees should be chosen with care. They should have the ability to manage the trust in the best interest of your children and know when to seek professional advice on investment strategies and tax planning considerations. The will should also provide for the appointment of replacement trustees should the trustees be unable to fulfill their duties.

The Executor

The executor is the person that the will appoints to carry out your wishes as stated in the will. Generally the executor's responsibilities include gathering the assets of the estate, paying all outstanding debts including taxes, and ensuring that the remaining assets are distributed according to the terms of the will. Each province has legislation specifying the powers of the executor. While these powers vary greatly, they can all be described as restrictive. For this reason, you may wish to specify any and all powers that you consider would be necessary for your executor to be able to manage your estate efficiently and effectively.

Meet with Logan Katz LLP Chartered Accountants

Preparing a will requires more than simply setting out how your assets are to be distributed to your survivors upon your death. This is especially apparent in considering the funds that the guardians would need to raise your children.

As part of your estate and tax planning, meet with us to discuss:

• the likely value of your estate after all the obligations, including probate and income taxes, are met
• the potential earnings if the proceeds are invested to finance your children's future, and
• assets that may not be dealt with in your will, such as life insurance policies, pension plans or other benefit plans for which you have designated a beneficiary.

It is also important to identify and plan for any assets that will not automatically be included in your estate such as property held jointly which passes automatically to the survivor, shares of corporations with a restriction on stock transfers, other property subject to buy-sell or survivorship arrangements, and property subject to trusts or limited ownership.

Get Professional Advice

Your will is undoubtedly one of the most important documents that you will sign in your lifetime. Be sure to seek advice from both your lawyer and Logan Katz LLP Chartered Accountants to ensure that your will deals with all possible situations and that your wishes are as clear as possible.

The above provides general information only. It should not be regarded or relied upon as accounting or taxation advice or opinions. Logan Katz LLP Chartered Accountants would be pleased to provide more information or specific advice on matters of interest to you.

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