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Managing Your Money
Time to give your Will a spring tune-up
April 25, 2005
Life changes - marriages begin and end, children are born and grow, you work for years and then retire - and that means your legacy changes, too. If you haven't reviewed your Will for a while, now is the time to do so.
After all, you want to ensure you've provided financially for your loved ones and that your evolving legacy will be passed on exactly as you wish. An up-to-date Will and estate plan will do just that while minimizing taxes and other fees so you can pass to your heirs as much of your estate as possible.
Here is an easy six-point tune-up for your Will (and legacy plan):
- The right Will for right now. Your Will is a legally enforceable declaration that distributes your property according to your wishes. Having a lawyer and your financial advisor consult on the preparation of your Will is definitely a good long-term investment for your estate. And you should review your Will at least once every three years, or whenever your circumstances change such as with the birth of a child, a disability or death of an heir, a change in marital status, or any other significant life event.
- The right Will in marriage and divorce. A previous Will may be rendered invalid when you marry (unless it was made in contemplation of marriage). But a Will is not automatically revoked when a person divorces, separates from a spouse, or dissolves a civil union. If you are not married or in a civil union in Quebec, it would be prudent for you and your partner to have a Will. As a matter of fact, the Quebec Civil Code doesn't recognize common-law spouses in matters relating to estate distribution when an estate is distributed ab instestat (without a Will). Having a Will is equally prudent for married and civil union couples, especially in situations where there are special considerations such as a second marriage, or if your family includes children from a previous marriage.
- The right time for a Power of Attorney. A Power of Attorney (POA) or Mandate in Case of Incapacity can be a crucial document separate from your Will. It allows someone to manage your affairs should you become unable to due to an accident, long-term illness or other disability.
- The right time to choose a Personal Representative. You can name a Personal Representative (sometimes called an Executor or Liquidator in Quebec) to administer your estate. You should choose someone likely to outlive you, who is resident in your province or territory, and does not have a potential conflict of interest.
- The right guardians for your children. Through a statement in your Will, you can specify a guardian (tutor in Quebec) that you wish to serve as an advocate for, and make decisions affecting the well-being of children (or in some jurisdictions, adults) with mental or physical disabilities. Be aware that the ultimate decision to appoint a guardian is at the discretion of the courts.
- The right time for a legacy team. You can see how complex even a simple legacy can be. That's why you should seek professional assistance to help you create and maintain a "legacy plan" that takes into account every facet of your evolving financial life and to ensure your legacy lives on exactly as you wish it to. Your legacy team should include a legal advisor, a tax planner, and a financial advisor to co-ordinate the other professionals on your team, make sure you legacy plan is complete, express your legacy goals, provide on-going advice about strategic direction and help facilitate your agreed-upon strategies.
When it comes to legacy planning you have a lot of decisions to make. Some of these - such as assessing your life insurance and disability insurance needs - can have a profound impact on your life now and in retirement, as well as on the value of the legacy you leave. A professional financial advisor can help you make the best decisions now and in the future.
This column, written and published by Investors Group Financial Services Inc., is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your Investors Group Consultant. Insurance products and services distributed in Québec by Les Services Investors Limitée (a financial services firm) and elsewhere in Canada by Investors Group Financial Services Inc. (insurance licence sponsored by The Great-West Life Assurance Company.)
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