Basic Will Considerations
BASIC WILL CONSIDERATIONS
What is a Will?
You Will is a legal document that comes into force and effect only upon your death (it can be revoked, replace or modified at any time during your life while you have mental capacity). Your Will is meant to ensure that your intended wishes regarding distribution of your estate are carried out. Since it is a legal document, there are certain requirements that must be met to ensure it is effective. We like to point out that unless certain requirements are met, marriage subsequent to the execution of a Will acts to revoke the Will, however divorce does not. If you are considering having a Will prepared and you are contemplating marriage, you must ensure that the person preparing your Will is so advised.
Who Is Your Executor (or Executors)?
You Will should name at least one Executor. The Executor is charged with gathering you assets and paying your debts, and ensuring that your wishes in you Will are carried out.
Executors can also be “joint” or “alternate”.
Often, in a typical husband and wife situation, each Will will say, in very basic terms, “if I die first, give everything to my spouse”. In that case, the first Executor will normally be the spouse.
If you do not have a spouse, or do not want your spouse to be the Executor, or to provide for the case where your spouse has predeceased you, it is then necessary to consider who will be your Executor. Often this will be one or more of the Beneficiaries who will inherit under your Will, but need not be, it can be any person, or trust company that you are comfortable with. In the typical situation, a spouse might say “if my spouse dies before me, then make my three children Executors” (provided they are past the age of majority). The children in the example are “joint alternate Executors”.
It is recommended that at least one alternate Executor be named. There may be any number of reasons why an Executor may be unable to act, or may be unable to complete the work needed to be done, and therefore an alternate can step in.
Executors should generally be someone you trust, someone that is capable of handling the affairs of your estate. It also preferable that they reside where most of your assets are.
It is recommended, but not necessary that you advise your Executor or alternate(s) that they are named, it is also recommended that you tell them where to locate your original Will if you pass away. There is no obligation to disclose any details of your Will to anyone prior to your death. It is a good idea to periodically keep a listing of your major assets (names of financial institutions, account numbers, investments, etc.) and debts updated and with your Will, or with your Executor, if you do not mind the Executor having this prior to your death.
Who Will Be Your Children’s Guardians?
If you have minor children, you need to name guardians. As with Executors, they can be joint and alternate. It is recommended that you have alternate guardians in case the first guardian(s) are unable or unwilling to act. Executors can be, but need not be the same persons as the guardians.
Where Do I Want My Net Assets to Go?
By law, all of your creditors have to be paid, which is one of the first tasks of the Executor, to gather your assets and establish and pay debts. What is left is normally distributed to your Beneficiaries. Gifts can be specific, such as “give my father’s watch to my son, Joe”, “give $1000 to each of my grandchildren”, or they may be general “divide all my net assets among my living children”, or a combination.
Who Will Be Your Trustees?
If your Will establishes any trusts (for example, until your children reach certain ages), you must name a Trustee. Similar considerations are involved for Trustees as Executors, they can be joint, alternate, corporate, they can be the same or different persons than the Executors, although usually they are the same. In most cases, a Trustee’s function will last for a longer time period than that of an Executor.
What Trusts Do I Need?
People often will set up trusts, so that portions of their estate assets are held and distributed over time in accordance with their directions. The most common example is having a portion or all of a child’s inheritance paid out when they reach a certain age.
Other Considerations
This material is not meant to be a summary of all things that may be relevant in your particular circumstances; it is a fairly simple overview. Marital status including prior marriages, common law relationships, ages of children, disabilities and dependents, and the scope, extent and nature of your estate will all affect the contents of your Will. Wills normally also contain a series of directions and grant certain administrative powers to assist your Executor in completing the administration of your estate.