Having a child is one of the key events in life that lead people to think about what might happen if they weren’t around anymore; all of a sudden it’s not just about you. Creating a will is one important way to ensure your loved ones are financially provided for if you pass away—yet, according to a study conducted by Willful*, only 48% of Canadian parents have a will. That number soars to 65% among parents with children under 18—and they’re the group that need one most (we’ll talk about why in a moment). When looking at millennial parents, the proportion without a will jumps to 77%!
Just like we all say we’re going to hit the gym every morning before work but we hit the snooze button instead, a lot of parents out there intend to create a will, but just never get to it because of time, money, or the old “thinking about death sucks” rationale. So we thought we’d break down why you need one, what to think about before you create it, how it works if you have a blended family, what to do if you and your partner have different wishes, and why creating a will is easier than you might think.
Why do parents need a will?
A will is a legal document that outlines your wishes after you pass away. It’s an essential document that ensures your wishes are followed in the event of your passing, which becomes even more important when you become a parent. Like life insurance, wills aren’t sexy—but they’re also not for you; they’re for your child.
As a parent, you need a will for two key reasons: first, to outline how you want your assets distributed to your child/children, and second, to assign a guardian for your minor child/children. What’s important to know is that if you die without a will, you’re what’s called “intestate”—a fancy word that means the court will decide how your assets are distributed (and when), and who gets to look after your child. You put yourself in the driver’s seat of your own legacy by creating a will, And you can create a legal will online in less than 20 minutes, so there’s no excuse for not doing it during your toddler’s naptime.
The key components of wills for parents
The hardest part of your will isn’t the actual creation of the document; it’s the conversations and decisions that need to be made beforehand. A will simply outlines who your executor is (the person who will put your wishes into action), how you want your assets to be distributed (everything you own goes under the umbrella of your estate, so you don’t need to worry about dictating where each thing will go), who your minor child’s guardian will be, and at what age they receive their inheritance. Sounds simple enough, right? Not so fast.
Choosing a guardian
If asked who your chosen guardian would be, what would you say? Maybe you’d have a simple answer —your sister, your mother, that really responsible friend you went to high school with. But, in most cases, it’s more complex. If you have a partner, chances are they’ll want to weigh in, which could mean a larger debate about who is best suited to look after your child or children. Selecting a guardian can involve more thought and debate than just picking a close relative, so make sure to set aside time to discuss.
Even when you and your partner do agree on someone, there’s still the question of whether they want to be a guardian—not everyone wants to sign up to be an instant parent. Having the discussion with them now is key to ensuring they’ll be up for the job. (You should also have a similar conversation with your executor.) Approach them with the ask, but also outline your parenting style and any other key things they should know about how you want your child to be raised. The will outlines who will look after your child, but it doesn’t outline how your guardian should look after them. Communicate your preferences about the big things—where you want them to be raised, your approach to their education, your important values, opinions about discipline, etc.—and share any of the traditions, rituals and fun things you’d want them to continue.
Passing on assets
Again, it sounds simple to outline who gets your assets, but there’s more to think about than meets the eye. Do you want your spouse to inherit your estate if you pass away, or would you rather leave everything to your child? If you die without a will in Ontario, for example, the surviving spouse is entitled to the first $200,000 of your estate, and the remainder is split equally between the spouse and your children. If that doesn’t work for you, then you definitely need to outline exactly how things should be allocated. In addition to thinking about how things would be divided between a spouse and child, what happens If you both pass away at the same time and leave everything to your child? What age should they get access to the estate—at 18, or when they’re 21 or 25 and might be at a place to spend that money more responsibly? Decide for yourself, or have that discussion with your partner if you have one so you’re both on the same page, and ensure you put your wishes into your will so your executor can follow them properly.
Being in a blended family is becoming more and more common in Canada. According to the Canadian Census in 2011, one in eight Canadian families are blended. Gaining new family members can be exciting, but becoming a blended family can come with challenges, one of which is estate planning.
In most provinces, marriage revokes a will—meaning that as soon as you marry your new partner, any will that you’ve created in the past is no longer valid. While that might sound straightforward, it actually means that you’ll need to update your estate plan (or create one, if you haven’t already) to reflect the new people and changes to your life. This can get tricky as questions around what’s “yours, mine and ours” come up, and you may even find that you and your new partner have different wishes. For example, if you each have your own kids that you want to pass on your assets on to, you’ll need to create individual wills instead of mirror wills which each name the other partner as the main beneficiary to each partner’s estate. (Mirror wills do not guarantee that your assets will go to your children alone.) There are a number of complexities that come with estate planning for blended families, so it’s best that you seek guidance from an estate lawyer in this situation.
The same can be said for couples who are separated but not divorced. Your previous will only becomes invalid by a legal divorce, so if you’re separated, you’re still considered to be married and your ex can still receive your property if something happens to you. If it’s been several years since you’ve separated and you’re now living with a new partner, you may technically have two spouses, a common-law spouse and a spouse that you’re still legally married to. In this instance if you don’t update your will or you pass away without one, your ex could still benefit from your estate while the partner that you’ve been living with for years is left out of the equation. It can create a messy situation that nobody wants to deal with. So if you don’t want your ex to be included in your will or to act as your executor or power of attorney, you’ll have to update your estate plan (and if you don’t have one at all, it’s crucial that you make one ASAP). Breakups are a difficult time full of emotion, and it can be hard to make clearheaded decisions on your own, so it’s a good idea to get an estate lawyer to help you through it.
One last thing: the outdated will
An estimated 1 in 10 wills is out of date because the person has gone through a major life event—getting married, going through a separation or, yes, having a child (or a second, or a third…). Pat yourself on the back if you already have a will, but don’t forget that if you have a will and don’t update it after your child is born, you haven’t answered the key questions above.
Erin Bury is the CEO at willful.co*, an estate planning startup that provides an affordable, convenient, and easy way for Canadians create a legal will online* for a fraction of the cost of visiting a lawyer. She only created her will when she launched this company, so she’s no stranger to procrastinating on this key to-do.
What does the * mean?
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