A 10-point will preparation checklist

Having a financial plan in place for your future is an essential, but often overwhelming task. There is a laundry list of things to think about: RRSPs, investments, life insurance, and the list goes on. No matter what goals you set for the future, no financial plan is complete without a valid last will and testament.

Think about it: you worked hard to build and protect your wealth. But, if you die without a Will in place, you undermine a lot of this success by letting the government decide what to do with your estate.  

The good news is it doesn’t have to be complicated or expensive to make a Will. 

We’ve broken down the ten essential components of a Will so you can easily prepare to make one without feeling overwhelmed.

Step 1: Get down to basics. 

You’ll need to gather the full legal names of anyone who will be included in your Will. This includes close friends, direct family members, and relatives like your nieces, and nephews. 

It’s important to know the birth dates for your children (specifically minor children) because that will determine whether you need to include a guardianship provision in your Will. 

Step 2: Get a ballpark of your assets. 

It’s a misconception that you need to know exactly how much money you have or what your assets are worth down to the penny.

To make a Will, you only need a general sense of your assets and their worth. In most cases, people don’t leave specific dollar amounts to their beneficiaries (unless they want to.) It is more common in your Will to divide your estate into shares to distribute to your beneficiaries. 

Step 3: Get a general sense of your debts.

A debt is considered to be anything you owe to another person or institution. It includes things like mortgages, car loans, and taxes. 

Just like with your assets, you don’t need to know precisely how much debt you have (plus, that will be different by the time anyone needs to look at your Will.) 

It’s a good idea to ballpark the amount of your debt so you better understand what will be left to be distributed to your beneficiaries after those debts are paid. Available cash is generally used first, but if there isn’t enough cash, your executor will likely need to convert some assets into cash (by selling them) in order to pay off the remainder of your debt.

The good news is that debt cannot be inherited by any of your next of kin. They can only be held responsible for any debt if they are a co-signer on anything like a line of credit, credit card, and mortgage.

The bad news is that your beneficiaries will only receive their inheritance after your debt has been paid off. This means if you pass away with a lot of debt it can delay the process.

Step 4: Choose a guardian.

If you have minor children, this is a big one and often the most critical decision you’ll have to make when making your Will. If you pass away and leave behind any minor children, your Will is the only way to legally appoint a guardian to take care of them. 

If you die without a will (called dying intestate), someone needs to apply to court to be placed in that role. This is usually a closer family member, but doesn’t have to be. When there is no Will, the court will have no idea what your wishes were or who you believed would be the best person for the job. 

When deciding who you want as a guardian, ask yourself some key questions, like:

• Does this person share your values?
• Will they raise your kids with a parenting style you approve of? 
• Do they live close to you, or would your kids have to move to a different neighbourhood and a new school? 

Guardians can also be named for your pets (well, sort of). A pet is legally considered to be property, which means that you can choose to leave your pets to a specific person in your Will. 

You can also choose to leave specific items to these “pet guardians”. This could be anything from an object, like that expensive dog bed or a monetary gift to cover future expenses like pet food and veterinary care.

Before finalizing your will, it’s best to have an open and honest conversation with the people you’ve chosen to be guardians to make sure they are up for the job. Being appointed as a guardian should never come as a surprise.

Step 5: Choose an executor 

Another important person you’ll need to name in your Will is the executor. This person’s job is to carry out your wishes and handle the administrative duties such as closing your bank accounts, paying your taxes and debts, and distributing assets to your beneficiaries, among other responsibilities. 

A good executor is someone you trust and who you feel has the practical, legal, and financial chops to wrap up your affairs. 

Step 6: Make a list of specific gifts 

A specific gift is an amount of money or a particular item that is left to a person or a charity. You probably have some personal belongings that hold some financial or emotional value—like an expensive piece of jewellery or a family heirloom. When you make a Will, you have the ability to list these items as specific gifts.

Specific gifts can come in the form of:

• A sum of money
• An item of personal property like art, jewellery, a vehicle, etc.
• Real Property (like a house or condo)

When you choose to leave specific gifts in your Will, they get distributed after your debt is paid. Once your debt is paid and specific gifts distributed, the remainder of your estate (called the “residue” or “residual estate”,) can then be distributed to your beneficiaries.

Step 7: Make a list of beneficiaries 

Beneficiaries are the people and organizations (like, say, charities) that will “benefit” from your assets (hence the term “beneficiary”.) First, I’ll talk about leaving behind assets to people and then talk more about charities in the next section.

When it comes to individual people, there are two ways you can leave assets behind:

• You can leave specific gifts of money or property to your family and friends (like we discussed above); and/or 
• You can divide your assets into shares. With shares, you are taking whatever is left from your assets after the specific gifts have been distributed and are dividing what remains into shares (think portions, not specific dollar amounts) to be dispersed.

If you die without a Will, however, your beneficiaries will be determined by the rules in your province, not according to your wishes. Generally speaking, the province will follow a scheme based on your family relationships at the time of your death depending on which of your direct blood relatives survive you. So, if you die without a Will, you don’t get any choice on who receives your assets or how it’s distributed. 

Step 8: Select a cause or charity to include in your will

One of the most overlooked elements of a Will is the ability to leave a gift to charity. Only 5% of Canadians name a charity in their Will. And it’s not that we aren’t generous folks. In fact, over 80% of us give to charity in our lifetimes. 

Your Will is one of the most powerful ways to make a difference in the causes you care about most. This is what’s called legacy giving, and it offers  several advantages including:

1. You can leave a significant gift to a cause or charity you’re passionate about.
2. You get favourable tax treatment on charitable gifts left in your Will.

There are considerable tax incentives for Canadians to leave charitable gifts in their Wills. When you leave a gift to a charity in your Will, your estate receives a tax credit for the full value of the gift which can serve to reduce the taxes owing on your final income tax return.

According to Rick Goldring of The Bay West Group Inc., “most people are unaware of the income tax impact upon death and the very generous tax rules we have in Canada relating to donating to charity. With proper advanced planning, tax can be reduced dramatically (or eliminated) with the legacy being left for family and charity being maximized.”

Step 9: Make a list of your digital assets 

In this day and age, everyone (even my grandmother) has at least one email address. We live in a digital age and spend much of our time online, especially during a pandemic. 

Even though a list of your digital assets is not typically included in your Will, it can be a good idea to create a list and make it accessible to your executor, family, and close friends. This is especially true if your digital assets are valuable (i.e. domain names, crypto wallets) or sentimental (i.e. digital photo albums and blogs) 

If your Will includes a digital assets clause, having a list of your digital assets could help the person in charge of your estate locate these assets and determine what should be done with them. Keep in mind this list should not be included in your Will.

Step 10: Decide how you’re going to make your Will

The most traditional way to make a Will is to go see a lawyer. But gone are the days where that is your only option. The fact is,  lawyers often aren’t necessary for most people looking to create a straight-forward Will. 

Luckily, there are a number of  affordable options for creating a Will:

• Online will platforms, like Epilogue, let you make a Will online in about 20 minutes from the comfort of your own home with the advantage of being able to make additional updates for free!
• There are DIY Will kits available in select stores. Careful with this option as it leaves more potential room for mistakes if you aren’t very familiar with what goes into a Will.
• You can even write a Will by hand, which is called a holographic Will. This isn’t a common option but can do the trick in a pinch, like this story of a man who got pinned underneath a tractor and etched his final wishes on the vehicle’s fender. 

Keep in mind that online and DIY options aren’t for everyone. It’s important to choose the option that’s right for you. If you have a more complicated situation, you should definitely see a lawyer to make your Will. For example:

• If you have a blended family
• If you’re in the middle of a divorce
• If you own all or part of a business with substantial value
• If you have dependents with special needs
• If you own assets in other countries

Preparing a Will is important for future planning, but it doesn’t have to be that complicated. Get all your ducks in a row before you begin the process using this ten point checklist and hopefully making your Will should be a breeze.

Guest post by Epilogue, the only online will platform in Canada founded by estate lawyers.