If you live in Quebec, please see this article.
Every physician knows that failing to take basic healthcare steps or not having good medical records at your disposal can be disastrous. Not taking basic estate planning steps or dying without a will can also have significant negative consequences.
Here are the five of the biggest reasons you don’t want to die without a will.
1. You decide who gets what, rather than leaving it in the hands of the provincial government.
Your will enables you to control how and when your assets are transferred to your loved ones. If you die without a valid will (known as dying “intestate”), your assets will be distributed according to your province’s legislative formula. And that formula might be very different from what you would have hoped.
2. You decide who handles your affairs.
The personal representative named in your will — also known as the executor1 — is the person or trust company who manages and administers your estate when you die. Among many tasks, your executor is responsible for making funeral arrangements, managing your professional corporation, dealing with your patient files, locating and protecting your assets, valuing and distributing your assets to your beneficiaries, filing all income tax returns for your estate, and obtaining clearance certificates from the Canada Revenue Agency.
If you do not have a will or have not named a personal representative who is prepared to act, it will generally take longer to administer your estate. If no relative (or other eligible person) steps forward to take on the task, then the court will appoint the Public Trustee2 to be the administrator.
If you’re unsure who should be the executor of your will, you can name MD Private Trust Company as your professional executor. If you choose this service, the people you care about will be spared the challenge of settling your estate during an already difficult time.
3. You want to leave specifics about how your family is looked after.
Without a valid will, you have no control over how assets are distributed to your family or how estate money is managed. For example, in your will you can create trusts for your children, so funds are held for their benefit until they are mature enough or experienced enough to decide what to do with the money. Without these trusts in your will, your children will receive all the estate money as soon as they reach the age of majority — whether they’re ready to deal with it or not.
It is also important to consider who should be responsible for the care of any children who are minors. Your will is the ideal place to express who you believe is best for that important task, and a great way to ensure the duties and responsibilities of the guardian(s), executor and trustee of the trusts you have established in your will are all aligned in the best interests of your children.
Grandparents, step-parents, adult siblings, other adult family members, and even adults who aren’t family members are all eligible to apply as guardian of your children, even if you named someone in your will. It is up to the court to choose a guardian from among the applicants; if you didn’t name a guardian in your will, the court has no way of knowing your wishes.
4. There may be others you want to provide for.
If you have elderly parents you are caring for, or family members with special needs, you won’t be able to properly provide for them or plan for their care without specific instructions in your will. Also, if there are charitable organizations, friends, or other family members to whom you want to leave money, assets or heirlooms, then you need to do this in a valid will.
5. You leave more for your beneficiaries.
Upon your death, all your personally owned accounts will be “frozen” by the financial institution, meaning that no one can write cheques or pay bills from such accounts. There may be a couple of exceptions (depending upon the financial institution), such as paying for your funeral and paying your outstanding taxes to the Canada Revenue Agency.
It can generally take anywhere between six and nine months for your executor to obtain probate, so that they are authorized to deal with transactions on your personally owned accounts. Having a current will and naming an executor in your will avoids unnecessary costs, delays, and a possible decline in value of your assets.
When drafting your will, be sure to consider the tax implications. An MD Private Trust Company Estate and Trust Advisor can help you understand this.
Taking the time to prepare a will goes a long way toward ensuring your assets are distributed in the way you wish — and it will certainly minimize the burden on your loved ones after you pass away.
To learn more about creating an estate plan, contact your MD Advisor*.
* MD Advisor refers to an MD Management Limited Financial Consultant or Investment Advisor (in Quebec), or an MD Private Investment Counsel Portfolio Manager.
1 An “executor” is called a “liquidator” in the province of Quebec and an “estate trustee” in the province of Ontario.
2 In the province of Quebec, the “Public Guardian and Trustee” is called the “Public Curator.”