Life happens. Babies are born. We say goodbye to loved ones. Marriages break up. Couples get together. Over the years we’ll be faced with many major life changes and while it’s easy to get wrapped up in diapers and weddings, we can’t forget the administrative changes that need to come along with life’s ups and downs.
One thing that many people forget to do after a life change is to update their will. Most people write it, file it and then forget about it.
One thing that many people forget to do after a life change is to update their will. Most people write it, file it and then forget about it. However, “wills need periodic updating, especially when a change comes along,” says Christine Van Cauwenberghe, Vice-President, Tax and Estate Planning for Investors Group.
When should you revisit your will? Here are four times where taking another look at this critical document is a must.
It’s a girl – or boy!
A newborn needs lots of attention early on, but the child will need even more care if something happens to you and your spouse. It’s in the will where you’ll indicate who will look after your child if you can’t. “Designating a guardian is crucial so that someone is prepared to take physical custody of your children and their assets,” says Van Cauwenberghe. Ensure the new child gets a fair inheritance, especially if you already have other children who are already named in the will.
Getting married, again
Getting hitched later in life, when one or both of you already has kids, should trigger a will update, too. But be prepared – it’s going to be a complicated revision. You’ll likely need to make sure that your child’s inheritance is not entirely up to the discretion of the step-parent. The will needs to carefully state which children get what, and what happens if a surviving spouse remarries. “It’s important to ensure that children from a previous relationship aren’t disinherited when you have a new spouse,” says Van Cauwenberghe.
Caring for the disabled
Having a special needs beneficiary in the family — such as a child born with health issues or a family member who develops them later in life — could necessitate a will change, too, as you’ll need to think ahead to that person’s needs over the long term. “You should have a customized will that structures your estate in a way that maximizes their access to various social and medical programs,” she says.
Common law and divorce
If you’re living common law, you should definitely be drawing up a will as surviving common-law spouses don’t have the same rights of inheritance as a married person in many Canadian jurisdictions. “It’s important to know the rules in your province and to structure your will and estate plan in a way that best reflects your intentions with respect to your partner,” says Van Cauwenberghe.
On the flipside, a separation or divorce will necessitate a will change. Pay special attention to beneficiary designations on your pensions, RRSPs, RRIFs, TFSAs, insurance and group benefits. You don’t want those dollars going to your ex.
Reviewing a will is easier said than done. It’s hard to think about mortality and what might happen after you’re gone. But creating a will, and updating it, is a must. Everyone wants those you love and who need care to be protected well into the future.