Why it's important to have a will

Good financial planning is all about providing for you and your family. And while nobody likes to dwell on it, that means ensuring your loved ones are taken care of after you die.

"To ensure that your assets are dispersed to your family according to your wishes, you need a will," advises Christine Van Cauwenberghe, LL.B and Director of Tax and Estate Planning, Advanced Financial Planning Support at Investors Group. "A will is a document that contains explicit instructions on how the various elements of your estate will be distributed to your beneficiaries." Dying without a will (known in legal circles as dying 'intestate') can cause considerable complications and may result in your assets being distributed against your wishes.

Without a will, provincial law will govern how your assets will be distributed. Rules vary from province to province, but no matter where you live, the law's interpretation of where assets should go may not match yours.

"Your lawyer should prepare your will, since it's important that it be legally sound," says Van Cauwenberghe. "But before talking to your lawyer, consult with your Investors Group Consultant about how to best structure your assets to achieve your objectives and minimize taxes." You can also explore ways of reducing provincial probate fees, which are based on the value of your estate.

Here are some items to consider when formulating your will:

If you plan to leave your entire estate to your spouse, include instructions for distribution of your wealth should you and your spouse die at the same time. In some cases, particularly when you have children from a previous relationship, leaving all of your assets to your spouse may not be appropriate. Make sure your lawyer understands your complete family structure before deciding how to structure your will.
When deciding how to leave money to your children (either upon your death or upon the death of both you and your spouse), consider leaving the money to them in trust until they are mature enough to be able to manage large sums of money.
Specify who you want to take care of your young children. Of course, this should be thoroughly discussed with your designated guardian(s) before drawing up the will.
Appoint an executor (liquidator in Quebec). This is the person who will act on your behalf to settle the financial aspects of your estate. You can appoint family members, close associates or a professional executor such as a trust company or your lawyer.
If you own a business, the planning process will be more complex and will often require consultation with your accountant and other parties involved in the business. Your ability to dispose of your interest in the business may be restricted by agreements entered into with your partners or other shareholders.

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Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant.