Home ownership and estate planning – the two go together. For most people their home is their largest asset. But many homeowners have not adequately protected this asset by taking the time to prepare a will.
Preparing a will is one of those things they will “get to” sometime. The only problem is that “sometime” may be too late. You may be at the wrong place at the wrong time or have some unexpected health event that leaves you mentally incapacitated and therefore unable to prepare a will. Under new legislation anyone 16 years of age or older can make a will.
So why should you have a will, regardless of age?
1. If you do not have a will, government legislation determines how your estate is distributed. In many instances this is not how you would like to see your assets distributed. One of the worst examples is for families with children. If one spouse dies without a will, the legislation provides that a portion of the estate is shared with the children and if those children are minors the surviving spouse must now deal with the Office of the Public Guardian and Trustee. Now I know there are a lot of nice people who work there, but why would anyone want to put their spouse in such a position?
2. Without a will, your family will need to get a court order appointing an administrator to distribute the estate based on the legislation. So not only will this result in your estate not necessarily been distributed as you would have wished, there are additional expenses and your family would likely need to hire a lawyer.
3. You may also want to structure your will and estate plan to reduce the amount of tax payable on your death.
4. And in most wills where there are minor children beneficiaries you may want to set up a trust so the children are not getting their inheritance in a lump sum at age 19 – which what would happen without a will. Often you want to appoint a trustee to manage the funds until your children are older than 19 – we often see trusts for children with release dates at 25 and 30.
5. Similarly if you want part of your estate to go to charity, the lack of a will eliminates this option.
6. And of great concern – if you have a disabled child receiving government benefits, the lack of a trust provision in a will may eliminate ongoing government benefits.
At the end of the day why put your family through the stress of an intestacy, legislated distribution and additional costs as they cope with the loss of a loved one?
So do yourself and your family a favour – get your will done sooner than later, as later may be too late.