Births. Deaths. Marriages. Divorces. Any of these four important life events should trigger you to ask “how does this affect my estate plan?” And “when should I update me will?
Even if none of these events has happened, reviewing your estate planning documents every three to five years will ensure you continue to incorporate changes in your financial status, changes in the law, retirement, and sudden windfalls like inheritances (maybe a long lost relative found you) or lotto winnings (hey, we can all dream).
As our family grows, our children enter adulthood and have children of their own, we often acquire interesting and exciting investments such as a family cabin, a classic car, original paintings and art pieces, recreational vehicles, or timeshares in warmer climates. All of these great lifestyle acquisitions come with their own set of rules that govern how we pass those assets on to our beneficiaries and what sort of tax consequences attach to that transmission.
Things to Consider When Updating Your Will
We often have investments or jointly held assets, some of which will have named beneficiaries. If we do not consider those in an estate plan, some assets may pass outside of the Will and can result in unintended consequences such as an uneven distribution to beneficiaries. This is problematic if you wanted everything to be divided equally or had a specific distribution plan in mind. For example, if you share a house with one child and are jointly on title with them, they will inherit the house when you pass. If your Will divides your estate equally between your 4 children, the child you shared the house with will get ¼ of your estate PLUS the house. If you intended for the children to have an equal amount of inheritance, this will very likely cause a family dispute, hard feelings, hours of paperwork and professional fees, and even litigation.
You may have a child who requires greater assistance in the future due to a disability. Without making specific provisions in your Will their inheritance may adversely affect their entitlement to government benefits. It may even trigger a benefit clawback. Provisions need to be made within the Will to protect that beneficiary from those unintended and adverse consequences to their income and benefits.
The Point of a Will
The whole point of making a Will is to ensure a smooth transition of your assets to the ones you love. A visit to your Lawyer to review your Will in light of your current circumstances and future plans will avoid so much hassle and cost later on. The goal is to stay current and ensure that changes in the estate administration rules, the legislation, and the taxes don’t derail your estate plans and leave your loved ones to sort out the confusion.
If you have estate planning questions and would like advice or for more information please contact Priddle Law Group at (250) 434-8911 or email reception@priddlelaw.ca to book a consultation.
