A month ago I was at a dinner party. I met a couple who had young children and the conversation naturally led to how we make a living. I explained that I was one of the founders of LegalWills.ca, the online convenient affordable service for writing a legal Will. The couple were thrilled, they had two young children, they knew that they needed to prepare their legal Will, but hadn’t got around to it. It was on their list of things to do, but as with all tasks with no real deadline, it never seem to make it to the top of their list.
They loved the idea of just going online one evening, stepping through the service, compiling their document, and then printing, signing in front of witnesses and creating their legal Will. So excited were they, that I gave them my business card with a discount code.
One month later, they still haven’t written their legal Will.
They still haven’t named an Executor for their estate, guardians for their children, made any charitable bequests, set up trusts for their children, created a distribution plan for their estate.
I spend a great deal of my time trying to convince people that they should not delay in writing their legal Will. It’s not something that should be written in contemplation of death, it ‘s not something that you write if you are suicidal, or 90 years old. It is an important document that forms a part of everybody’s sound financial plan.
So here’s the confessional.
A little over a year ago we had a new daughter. I have not yet updated my legal Will.
I work on LegalWills.ca every single day. I talk to new parents every single day telling them that they need a Will. I shake my head when I hear the stories of people not having the time to prepare their own legal Will and explain to them not only how important it is, but also how convenient and affordable it can be using an online service like ours.
My one year old….
How can I, a person who works with the services at LegalWills.ca every single day of my life, not have updated my Will? I have a constant dread in the back of my mind that something may one day happen to me, and the newspapers will report that the founder of LegalWills.ca didn’t have an up-to-date Will. So rather than wag my finger at all of those parents who haven’t prepared a legal Will, I need to explain that I do understand, really I do, and there are a number of reasons why the vast majority of adults in Canada have yet to put their estate plan in place.
The barriers to preparing a legal Will
The most important barrier to preparing a legal Will is that there is no time sensitivity. It really doesn’t matter if you prepare your Will today, or next week. And next week, it can probably wait another week. Statistically, the chances are that nothing is going to happen to you in the next few days that would call upon a Will, Power of Attorney or Living Will. We know that today, somebody will find themselves in that position, but chances are it will not be you. We also know that at some point in your life (at the end of it) you will need a Will, but chances are, it won’t be in the next few days.
However, we also know that once you have written your legal Will, it is probably going to serve you for many years, so there is no advantage in delaying.
Perceived lack of consequence of not preparing a legal Will
An excuse associated with the lack of time sensitivity is that, if by some unfortunate chance something did happen to you, what is the real consequence of not having a legal Will in place? surely everything would just all go to your spouse anyway. The surprisingly reality is that in fact, this would only be true in 2 Canadian Provinces. Most Provinces and Territories divide the estate between the spouse and children if there is no legal Will in place.
More serious though is that the process of administering an estate without a legal Will is far more difficult than arranging the affairs if a Will is in place. The first troublesome task is to prove that no Will exists, which is far from straightforward.
I have nothing to leave
Amazingly, even people with an absolute fortune can sometimes die without a legal Will. Take that case of Roman Blum a year or so ago, a $40M estate, and he just never quite got around to preparing a Will. It was on his list of things to do, he even talked socially to his lawyer friends about needing a Will…he just never quite got to it.
Of course, he knew he was worth a fortune, but for most of us, we have absolutely no idea how much we will be worth when we die. Or even how much our estate will be worth after we are gone. If we are killed through an accident with a corporation being held liable, our estate can be worth a fortune. We are indeed worth much more dead than we ever were when we were alive.
Waiting for a life event to happen
Back in the days when most Wills were written using a lawyer, this excuse made more sense. If you are planning to get married, or have children, or your children are nearly adults, or they are thinking about getting married, you wouldn’t want to have to update your legal Will every year. After all, it can cost hundreds of dollars each time.
The obvious flaw in this argument is that your life is rarely in stasis, and throughout these life changes, you should always have a legal Will in place. We often receive calls from prospective customers asking “I am expecting a child in 6 months, but I don’t have a Will, should I wait until the baby is born?”. Using LegalWills.ca the answer is simple; No, write the Will now, and in 7 months, login to your account, make an update and print off a new Will. But you should not go for another half a year without a legal Will in place.
The barriers to updating your legal Will
There are well documented statistics on the number of adults in Canada who have prepared a legal Will (around 35 percent), but it is more difficult to quantify how many of these are accurate, up-to-date and reflect the individual’s current circumstances. There are certain life stages that require a Will to be updated or it becomes meaningless. In fact, in most Provinces getting married automatically cancels any legal Will.
Having a new child, children becoming adults, children getting married, or grandchildren arriving would all suggest a review of your Will.
But the most overlooked trigger for updating a legal Will is with the appointments in the document. Is your Executor still the most appropriate choice? We saw this with the son of Bernie Madoff who named his father as Executor, but Madoff’s 150 year prison term disqualified him from fulfilling his duties.
Maybe your guardians have had children of their own, or moved to another Province or country. This would likely prompt a review of your legal Will.
You may have acquired new wealth which changes your plans for distribution. Perhaps there is now room for a charitable bequest, or a new asset like your cottage may have to be written into your Will with a specific plan.
Family dynamics also change; your son may be showing signs of irresponsibility and the trust that you have set up to expire at 18 may seem a little young. You could update your Will and move the trust expiration date to 25, or 28. You may have loaned money to one of your children and need this to be reflected in your distribution plan, or who knows, perhaps one of your beneficiaries has done something that you regard as unconscionable or laudable, and you feel that their bequest should be adjusted to reflect this.
So where does this leave me?
In the time I have written this blog post, I could have written my Will, Financial Power of Attorney and Living Will. My wife has her Will written and printed, she just needs to get it signed. Maybe it will take a major event to give us the trigger to finally prepare our Wills.
At LegalWills.ca we typically see spikes of activity after news reports of natural disasters, but most people are driven to write their Will after their own mortality is exposed to them for example, after the diagnosis of an illness.
The most frequent driver however is when people have to deal with the estates of family members who did not have a Will, and they suddenly appreciate the disastrous mess resulting from dying intestate (without a Will).
My distribution is classic, everything to spouse, if something were to happen to us both, divided between our children. We know who our guardians will be, and I know my Executor appointments. I even know of some specific bequests that I would like to add to my Will including charitable bequests.
I’m taking a break.
I found that writing these words was too compelling for me. I went back in to LegalWills.ca and quickly stepped through our service adding our new daughter. I have now downloaded a printed an updated PDF of my Will. I know I am meeting with friends over the weekend who will be able to witness the signing of the documents. By Saturday lunchtime, my complete estate plan will be in place, including a trust and guardians for our one-year old.
It really was that simple after all, and there really is no excuse.
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