Why You Need a Will and Tips to Help You Get Started
With COVID-19 bringing the issue of wills to the forefront, Gordon Pape explains the importance of writing one and provides some tips to get you started. Photo: PeopleImages/Getty Images
Nobody wants to talk about it. But in these days of COVID-19, there’s no escape.
Every day, newspapers and television bombard us with the latest fatality statistics from the pandemic. About 9,000 dead in Canada. More than 150,000 in the U.S., with the total increasing by more than 1,000 each day. Worldwide, more than 18 million cases with about 700,000 lives lost.
The elderly are the most vulnerable to succumb to the virus. But an alarming number of people under 50 are becoming ill – more than half the total according to recent numbers – and the longer-term consequences for them are unknown. One German study published by JAMA Cardiology examined the hearts of 100 recovered COVID-19 patients that were otherwise young and healthy when infected. The study found that 78 per cent of patients showed structural changes to their hearts and had signs of cardiac injury two months after recovering.
Now here’s another statistic, which brings me to the point of this column: 56 per cent of Canadian adults do not have a will. That’s a worrisome number at any time but it’s especially troublesome when COVID-19 has claimed thousands of lives in this country.
It’s not hard to understand why many younger people haven’t made a will. They’re healthy and expect to live a long time. Death is not something most 20-year-olds contemplate.
It’s more difficult to comprehend why older people keep putting it off. They know it’s something they should do to protect their families, but somehow there are always more pressing priorities.
“Most people find it hard to engage in (or even start) activities that are uncomfortable to think about, seem complicated, don’t feel urgent, or will take a lot of time and money. Traditional estate planning checks all of these boxes, so it’s no wonder lots of people put it off,” says Arin Klug, chief operating officer and co-founder of Epilogue, an on-line will preparation site.
It’s time for a change in thinking. COVID-19 has brought the issue of wills to the forefront. Everyone adult should have one, most especially those with dependents.
Here are some of the key points you should know.
What to Include
The main purpose of a will is to make sure your financial assets, property, and personal possessions are distributed according to your wishes. That may be to family members, friends, charities, or anyone else you want to inherit. Make your wishes crystal clear so there are no disputes when you’re gone.
You also need to name an executor. This is the person charged with the legal responsibility of ensuring the terms of the will are carried out, creditors are paid, a final tax return is submitted, and more. Depending on the estate, it can be a big job. Some people appoint two executors, often a family member and a lawyer. Professional executors will charge a fee for their services.
What happens if you die without a will? The legal term in intestate. It means that since you have not expressed your wishes, the government and the legal system decide who gets what.
“There are a lot of people that are reluctant to make a will because they simply believe they don’t need one,” says Daniel Goldgut, Epilogue’s chief executive officer and co-founder. “There are a lot of reasons people provide – too young, not enough assets, etc. – but most of these reasons are rooted in some misunderstanding of what happens if you die without a will. Usually, when people hear about the negative consequences of not having a will, they are much more inclined to get it done.”
Laws vary from province to province. In Ontario, the Succession Law Reform Act sets out how the estate is distributed if there is no will.
According to the Act, unless someone who is financially dependent on the deceased person makes a claim, the first $200,000 is given to the spouse. Anything over $200,000 is shared between the spouse and the descendants (e.g. children, grandchildren) according to specific rules. You can read more details at the website of the Ontario Attorney-General.
In most cases, you don’t need a lawyer. You can write your own will or use an on-line service offered by companies like Epilogue. You can even find a basic will form available at no cost at lawdepot.ca.
However, if you have a complex estate, family dynamics that need to be handled in a very particular way, or want to engage in sophisticated tax planning, hiring a competent estate lawyer is advisable, says Mr. Klug.
“COVID-19 has really changed people’s perspective on estate planning,” Mr. Klug concludes. “All of us now see how life as we know it can change suddenly, in very drastic ways. While it is just as important as ever to take care of some basic estate planning, the difficult conversations around this topic have become more normalized.”
This column originally appeared in The Toronto Star.
Gordon Pape is Editor and Publisher of the Internet Wealth Builder and Income Investor newsletters. For more information and details on how to subscribe, go to www.buildingwealth.ca.