What Your Will Can and Cannot Do

An up-to-date Will is a key part of any effective estate plan. It accomplishes several important goals, allowing you to specify how your estate will be distributed, naming a guardian for any minor children.   It also prevents the time and expense of litigating your estate, protecting the inheritances of your loved ones and preventing a dispute from fracturing the family.

WHAT YOU CAN DO IN YOUR WILL:

You Can Choose Your Beneficiaries

A properly drawn-up Will allows you to name your beneficiaries. If you pass without a Will, the Alberta Wills and Succession Act indicates who will inherit your estate and how it will be distributed. If you are married or have an adult interdependent partner and have children with him or her, that spouse / partner is entitled to receive your entire estate. If you have children but no spouse, everything will be divided equally amongst your children. This may be what you want, or it may not. In either event, naming beneficiaries in your Will eliminates any uncertainty.

You Can Specify Who Gets What

Do you want your son to get your antique coin collection on your death? Do you want a certain amount of money set aside for your grandchild’s college tuition? Do you want to gift money to a favourite charity? Your Will can ensure that all money, property, and other assets are disposed of in accordance with your wishes and prevent disputes among your heirs.

You Can Name an Executor

If you don’t have a Will, the Estate Administration Act establishes a priority list for administration applicants. In Alberta, top priority is given to the surviving spouse, although the Court may end up granting administration to anyone it considers appropriate. A Will enables you to name an Executor who is ideal for the role in terms of responsibility and even residence: if you choose someone who lives outside of Alberta, he or she may have to post a bond and any income earned on estate assets may be taxed at higher rates. Someone who lives within the province of Alberta bypasses the bond requirement and taxation rates could possibly be lower.

You Can Name Guardians for Minor Children

You may also specify who will raise your children if you pass while they are still minors. The children’s other biological or adoptive parent is the presumptive legal guardian, but you may have concerns about that person’s ability or inclination to care for them. If your wishes are not set out in a Will, the Alberta Court may appoint a guardian who might not have been your ideal choice for the role.

You Can Protect the Interests of Minor Beneficiaries

In Alberta, the Public Trustee must be advised and deal with all property and assets that a minor is entitled to receive under a Will. If that child’s surviving parent or guardian wants to assume the role of managing the property, they must obtain a Court order, which will likely require them to provide a bond and officially account to the Court at certain intervals. If there is a specific party that you want to manage your children’s property, you can name him or her in the Will,  irrespective of the value of the property.

WHAT YOUR WILL CANNOT DO

You Cannot Create a Personal Directive

A Personal Care Directive, otherwise known as a Living Will, is a legal document that provides a designated agent with the authority to make non-financial decisions on your behalf, such as medical treatments and who will temporarily care for your minor children. Unlike Wills, they are intended to take effect while you are still alive but incapable of making certain decisions.

You Cannot Create a Power of Attorney

A Power of Attorney gives another person the authority to make both legal and financial decisions on your behalf. The other party may be a person or institution. Like personal directives, a Power of Attorney arrangement comes into effect while you are still alive but incapable of making decisions about your legal and financial affairs. Once again, it simply would not make sense to include a Power of Attorney in your Will since your Will does not take effect until you have passed away.

You Cannot Always ‘Dodge Probate’

If your estate consists solely of personal assets that are not registered with a third party, probate is not necessary because change of possession is tantamount to change of ownership. Examples of personal assets include:

  • Personal items such as clothing and jewelry
  • Household furniture
  • Private company shares

Few estates, however, consist entirely of this kind of asset. If your estate includes a car, real estate, or a financial account registered with a third party, probate will be required whether you create a Will or not.

You Cannot Gift Jointly Owned Assets

In Alberta, the Right of Survivorship dictates that jointly owned assets are passed on to the other owner when you pass, so they cannot be included in your Will. If, for example, you jointly own your home with your new spouse, he or she will receive it and it does not form part of your estate to be passed on to your children or others.

You Cannot Gift Assets With Named Beneficiaries

RRSPs or life insurance policies that have a named beneficiary will pass directly to that person, despite what you may state in your Will. If you want to change the beneficiary for a particular asset, you must notify the financial institution or insurance company directly.

A Will is an extremely valuable tool that enables estates of all sizes and complexity to be distributed the way you want, but it cannot be used to accomplish every estate planning goal you may require. Other resources, such as beneficiary designations, personal directives, family trusts, and powers of attorney can be used together with a properly-written Will to create an estate plan tailored to your needs and goals.

For assistance in putting together a Will that meets your needs, contact the estate planning lawyers at Estate Connection today. We will help you create a document that will protect the futures of your loved ones and assets and, ultimately, give you peace of mind.

 

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