- Financial Planning
- General Interest - Personal
Estate Planning: Where There's a Will There's a Way
March 17, 2022
It’s not hard to find examples of horror stories that became reality because of inadequate estate planning. Just consider:
- The Rogers family, who recently made headlines for their bitter family feud during a $26 billion takeover (read our article Lessons Learned in Succession Planning from the Rogers Family for more details);
- Larry King, who’s estranged wife and children battled it out over his $144 million estate after a handwritten will was introduced after his passing; and
- John Singleton, who’s 16-year-old will, listing only one of his five (or possibly seven) offspring, was hotly contested after his death.
Sadly, this is merely the tip of the estate planning nightmare iceberg. These, and so many more nightmare stories, all could have been avoided with proper estate planning.
Why is it so Important to Have a Will?
A member of the WealthCo investment team, Howard Wong, remembers how critical a will became when he and his wife had their first child.
“Without a will in place specifying who is guardian of your child or children, social services will step in to take them in the event the parents pass,” Wong shares. “Most parents don’t want their children to end up in the system. And while a family member or friend may eventually be able to get custody, it can be quite a lengthy process, especially if it involves multiple provinces.”
While very few of us would take comfort in allowing the government to make our legal guardian custodial decisions, this is only one of the many important decisions that will be left in their hands if a will is not present at the time of a passing.
“Essentially having a will in place allows you to make all decisions about what happens to your estate, to your savings, to your life’s work,” Wong explains. “There could be family battles over your assets, and they could ultimately end up somewhere that you would never have chosen, if no beneficiaries are identified. If there is an ensuing legal battle, everything could be made public.”
When is the Best Time to Prepare Your Will?
Wong advises of several life trigger events that should motivate an individual to get their estate planning affairs in order, regardless of the size of said estate.
“Having kids, for sure, deciding on a legal guardian for your dependents is of the utmost importance,” Wong reiterates. “When you get married. If you get divorced. If there are any substantial changes to your family dynamics. If you start a business. If there are specific provisions you want included.”
In getting ready to prepare your will, Wong suggests seeking lawyer recommendations from family and friends in favour of trying to create one yourself. Will preparation services typically start at $400 and go up from there depending on the complexity of the will.
“Get an introduction to a trusted and competent lawyer and in advance of meeting with them determine who your legal guardians, trustee(s) for minors, beneficiaries, executor, and back-up executor will be,” Wong advises. “A good lawyer will run through a variety of scenarios and discuss potential unintended consequences to get you thinking about a wide range of possibilities and give the ability to plan accordingly.”
In choosing your executor, keep the following in mind:
- Many individuals choose a trusted family member or friend as their executor, and while this is certainly an option, it may be best to avoid doing so if there is the potential for family rivalry or estate disputes;
- Ideally your executor should be someone who has their own financial affairs in good order and who you trust to represent your wishes to the best of their ability;
- A corporate or professional executor is an option, and in particular may be the best option for ensuring an expedient distribution of assets and in easing the emotional and administrative burden on your loved ones;
- Someone local may be a better fit than someone who may have to travel for estate business;
- Health and age should be considered as factors in selecting your executor; and
- There is always the option to name two co-executors as well, to make things simpler and share the workload.
Estate Planning as a Piece of Your Financial Health Pie
Along with financial planning, investments, retirement planning, and insurance planning, estate planning is simply another must-do on you and your family’s path to good financial health. Is your financial path on track with where you want it to be? Book a review meeting today and find out!