Have you updated your will lately?
BY JILLIAN ALI
While taking the initiative to have a will in place is important for the effective management of personal wealth and assets, remembering to update your will after major life events is equally as important. Key milestones that trigger the need for review include marriage, the birth of a child, separation, divorce and a significant change in wealth. As such, life events may not necessarily have the legal effect you might think; understanding how these situations affect your intentions as set out in your current will is essential.
As common law marriages continue to rise, it is important to note that the Province of Ontario does not recognize common law marriage for the purposes of succession. Therefore, a surviving common law spouse does not have any right to the property of their deceased spouse. Should you wish to provide for your common law spouse you will need to amend your will accordingly.
In Ontario, marriage automatically renders your will invalid unless the marriage was specifically contemplated at the time the will was drafted. This is important to note because if your will has been invalidated by marriage and you die before having made a new will, you will be deemed to have died intestate (i.e. without a will). This means that your assets will be distributed in accordance with the Succession Law Reform Act (Ontario) (the “SLRA”), which may not allocate property among your beneficiaries as you had intended.
Separation does not have any effect on your will. In the absence of a separation agreement drafted to expressly exclude entitlements under the will, gifts to married separated spouses or to former common law spouses shall remain valid. To avoid this, a new will should be drafted soon after separation.
Unlike marriage in Ontario, divorce does not automatically render your existing will invalid. Divorce will only revoke those provisions in your will that appoint your ex-spouse as an estate trustee or grant your ex-spouse any general or specific powers of appointment. Divorce will also deem your ex-spouse to have predeceased you. As such, if the gift to your ex-spouse was that of the residue of your estate, the residue of your estate will end up being distributed in accordance with the SLRA, which, as mentioned above, may not be in accordance with the distribution you had intended. In order to avoid this, your will should be reviewed to change your appointments and reallocate your estate accordingly.
The birth of a child should prompt a review of your existing will as you will want to make sure that your child is adequately provided for. You can name a guardian to take care of your minor child in the event of your death. You can also consider setting up a trust for your child so that, in the event of your death, your child will not receive their entire share of your estate all at once. With the establishment of a trust, your child’s share of your estate can be held by your executor, or a trustee you designate, with your child’s share of your estate not to be distributed until your child has reached a certain age or for distributions of your child’s share of your estate to be staggered as your child reaches different designated ages.
The acquisition of shares in a private company is noteworthy from a tax planning perspective when contemplating the need to update your will. In order to avoid the application of estate administration tax on the value of privately held shares, it may be more beneficial to have the shares distributed under a secondary will which will not be subject to probate.
The death of an individual designated as an executor, trustee or guardian under your will is also a time when your will should be reviewed. If you haven’t declared an alternate individual to act in the deceased place, you will want to do so to avoid the appointment by the court of someone that would not be of your choosing.
With the continued advances in technology, your digital assets have also become an increasingly important consideration. Digital assets can be found in a multitude of forms, including devices such as computers, smartphones, tablets and external hard drives, as well as online, including on social networking websites, blogs, vlogs and photo-sharing accounts. With the amount of personal information now stored electronically, your will should include a provision granting your executor the power to access, control, transfer and delete your digital assets according to your wishes. Proper planning with respect to digital assets can help prevent the disclosure of information that could be damaging to your reputation or the cause for dispute among your family members or friends. The prevention of fraud or identity theft have also become important considerations.
As the legal implications of certain life events do not necessarily impact your will in the way you might think, it is important to seek advice at regular intervals to ensure that your assets will continue to be distributed pursuant to your intentions. BL
As a part of the Lancaster, Brooks & Welch Wills team, Jillian Ali regularly assists clients with Wills and Powers of Attorney. She may be contacted at 905.641.1551. Lancaster Brooks & Welch LLP have been Niagara’s Lawyers since 1882.