Thursday, 2 August 2012

Do I Need a Will? -- Wills and Estate Law

Do I really need a will?

Everyone needs a will, even single people with no children.   The rare exception may be single persons with no children and no assets, but most people will likely acquire some assets or have children in his or her lifetime.  Thus, even if one does not have any assets or children now then one should still have a will if they are planning on acquiring assets or having children in the future.

If you do not have a will then your estate will go “intestate”.  This means that someone will need to come forward and bring an application at the courts to have your assets administered in accordance with inflexible rules as to how assets should be divided.  Also, the government will decide who will raise your children.  It is a very costly process and takes much longer to administer. 

It is possible to draft your own will or use a kit acquired from a stationary store, but in my experience these very often create problems.  There are rules that must be followed.  There are rules that govern the validity of a will and there are rules about where your money should go.  For example, have you ever heard of the “Rule Against Perpetuities”?  It states that a gift in a will must vest within a life in being and 21 years.  If the rule is not followed the gift or the will could fail. 

The point is that people are not completely free to do whatever they want with their money on death.  There is a priority list of who must be paid and relatives who must be cared for upon death.  If any one of these rules are not followed then a will could be found to be invalid or go “partially intestate” (partially invalid).  Also, there are tax implications to just about everything that is done in a will (or not done!).  

Most lawyers do no charge a lot of money to prepare a will.  The cost to correct errors and omissions on self-drafted wills can cost many thousands of dollars and pit family member against family member.  Poor drafting can lead to an estate paying more tax than necessary.    Thus, for a small price to have a will drafted, you can possibly save many thousands in litigation costs, tax bills and family strife.

Finally, doing up a professional will allow the following goals to be accomplished in a manner that can be relied upon:

-          Pick the person(s) who will administer your estate and specify what compensation, if any, he or she should receive.

-          Pick a guardian for your children.

-          Make gifts to different people, or in different proportions than provided for by the Wills and Succession Act which says that everything goes to your spouse (or adult interdependent partner) if you don’t have children, and a combination of your spouse (or adult interdependent partner) if you do. This can be essential for blended families (second marriages).

-          Prevent people from having a share in your estate that might otherwise be entitled to a share.

-          Delay past age 18 when someone will receive a part of your estate.

-          Create a trust for someone, including a discretionary trust for disabled family members.

-          Give someone a life estate in something.

-          Chose alternate beneficiaries of gifts, trusts, or the residue of your estate.

-          Create mirror wills where you and your spouse decide how to plan your estates together.

-          Give to charities.

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