You’ve thought about your estate plan. You know how you want your assets distributed after your death. Maybe you’ve even written a last will and testament. So what could go wrong? Here are a few key things to remember:
- Formalities. To be valid, your will must be properly executed. It must be signed by you, in the presence of two witnesses, and also signed by those two witnesses. You must have sufficient mental capacity to execute a valid will. We always recommend getting professional advice to assist in preparing your estate plan, to help ensure the formalities are properly met.
- Joint Tenancies. The wishes you set out in your last will and testament only apply to assets that are included as part of your estate. Assets that are held in joint tenancy generally do not form part of your estate. For example, you may hold your house in joint tenancy with your spouse. Upon your death, your interest in the house will be transferred to your spouse upon filing a document with the Land Title Office. Your house will not be distributed under your will, will not form part of your Estate, and will not be subject to probate fees. Not all assets held in joint tenancy are this easy – assets held with anyone other than your spouse may be subject to the presumption of resulting trust. Be sure to consider the impact of joint tenancy on your overall estate plan, to ensure your wishes are implemented.
- Designated Beneficiaries. If you designate a beneficiary of certain assets, that asset will not form part of your estate, and will not pass under your last will and testament. You can designate a beneficiary on a variety of assets, including TFSAs, RRSPs, RRIFs and some insurance plans.
- Wills Variation Act. You should be sure to consider whether you have made adequate provision for your spouse and children. In British Columbia, a spouse or child can apply to the Court to change the distribution you have set out in your last will and testament. The test is whether your last will and testament makes adequate provision for the proper maintenance and support of your spouse or children. If your will does not make such adequate and proper provision, then a court may order that the provision that it thinks adequate, just and equitable in the circumstances be made out of your estate.
- Review. Ensure your will is up to date and reflects your current situation and intentions. Have you recently been married? Have you recently divorced? These life changes have serious impacts upon your last will and testament.