Lawyer advises against uneven distribution, dollar values and will kits
The future can be scary and even the thought of preparing a last will and testament is too much for some people.
Most Canadian baby boomers ages 45 or older have gotten over the hump of preparing a will. A July 2011 study conducted by Leger Marketing for BMO Financial Group suggested nine out of 10 Canadian baby boomers have a will.
The online study surveyed 1,002 Canadian baby boomers with investible assets worth $500,000 or more. It also suggests almost half of these Canadians have not updated their will in the last 10 years.
Where does one start? Here are a few tips and tricks to writing wills that may generate peace of mind while undergoing such a task.
Knowing the facts
S. Allan Low, a partner of Low, Glenn and Card LLP Barristers and Solicitors, said he believes there is no time frame a will should be updated in. He made his will in 1976 and hasn’t updated it because he said his circumstances haven’t changed.
He said: “One of the things people don’t understand is that a will does not become invalid simply because of the passage of time. So the fact that a will is, in my case, 36 years old, doesn’t make it invalid.”
That being said, there are circumstances where individuals feel changing a will may be necessary. Low said that to change a will there are two options: write an amendment, called a codicil, or create an entirely new will.
A codicil is perfect for minor revisions because it is quicker and cheaper than re-doing the entire will, Low said. While it may be cheaper, it is not necessarily easier if someone decides to change the amount they are giving to a beneficiary, he said.
“If someone changes it from 50 per cent to 10 per cent of their estate, you can make that change with a codicil, but then it’s going to be apparent to that person and to everybody.”
For the sake of avoiding hurt feelings, Low recommends people redo their wills to hide their history.
Getting to the dollars
Another tip to writing wills is limiting the amount of items listed. Low said his company has had clients come in with long lists stating every piece of furniture they own. Instead he encourages people to use percentages because he said these things are going to change a dozen times between now and the day someone dies.
Percentages are especially important in money matters.
He said: “If you use a flat dollar amount and say, ‘I want X dollars to go to this person and Y dollars to go to this person,’ what happens if your estate shrinks and you don’t have that many dollars, or what happens if your estate gets bigger and you haven’t given everything away?”
Dollar values are a cause for problems within families, much like an uneven distribution of one’s estate.
“There is no more fertile ground for bitterness and dissension within a family than parents who exercise an uneven hand amongst their children,” he said.
Some parents may have good reason to grant larger sums to certain children. But Low said he warns his clients that those reasons that seem important now, are going to create bitterness between brothers and sisters when children realize they have been shut out or given lesser amounts.
Lawyers can give great legal advice surrounding wills, but there is always the option of the cheaper will kit.
Laurel Murdoch created her will in 1994 using a lawyer, but is open to the idea of using a will kit. However, she said she would seek legal advice to make sure she didn’t miss anything important.
Murdoch sought legal advice for her father’s will before he passed away in February 2010. Murdoch’s niece, who was working at a law firm, asked one of her co-workers to take a look at his will.
They found that the beneficiaries’ names weren’t spelled out in full – meaning first name, middle name and last name – which could prove difficult if the will’s validity was tested in a court of law.
Low said every single word in a will could potentially get people in trouble under the law. Lawyers are often criticized for being needlessly wordy and using words that no one understands but he said they do this because they recognize that most people use language improperly.
If people write that they plan to give their estate to their “kids” for instance, he said, it could be interpreted in many different ways. It may include the children of the person’s present marriage, the children of a previous marriage, the nephew that lived with them but wasn’t ever adopted – and the list goes on.
In Murdoch’s own experience of writing a will, her advice for people is to keep it simple, keep it direct and know your wishes.
She said, “It doesn’t have to be fancy, it just has to be correct.”