Table of Contents
A. Introduction
If there is no Will, there is no way. This saying explains what happens to your estate if you do not have a will that suffices for the distribution and disposal of your assets.
Moreover, making a will requires more than merely making one. You must update it with every important event in your life.
If an event appears to be demanding a change in financial distribution after your death, you should depict it in your Will.
If you do not alter it appropriately at events like a new marriage, new child, or adoption of a child, court interference will impact the distribution of assets, and legal procedures may alter what you had originally planned.
B. Explanation of The Importance of Updating a Will in Canada
Updating your Will is like ensuring the new realities in your life are mentioned in the will so that your heirs get what you plan for them. Remembering to update your will can directly affect the outcome of the estate division. It can also affect the beneficiary’s rights manifold.
Moreover, it can lead to disproportionate division of assets. It can lead to unnecessary legal complexities. Additionally, it can lead to legal battles between the beneficiaries. It can also strengthen the hands of third-party claimants.
C. Life Events Prompting Updates
- Marriage
Your spouse is entitled to receive a share of your estate.
Therefore, you must update your Will to depict your partners as legal beneficiaries.
If you do not update your Will, the following Will complexities can arise:
If you do not update your Will, the following Will complexities can arise:
- A spouse may find themselves deprived of their share.
- They may have to file a claim to get their share.
- A spouse may get more than they are entitled to.
So, it is essential to address these issues efficiently so that no complexity arises.
- Divorce
After a divorce, you must update your Will because your spouse’s rights to your inheritance cease with a divorce. Following are the consequences of not updating your will at divorce:
- It can lead to unnecessary claims.
- If you had designated your partner as the beneficiary of your property, your will ceases to be effective after his death.
- Birth or Adoption of A child
- Remember to update your Will at the birth or the adoption of a child.
- Every child born or adopted is a legitimate heir to your belongings.
- If you do not name him in your will, it can lead to unwanted outcomes.
Consider the following example:
Suppose Mr. James adopted a kid named Chris and died without making changes to his Will. Meanwhile, his previous Will contains a provision delegating $1,000,000 out of his total $1,500,000 worth of estate to his five children and the other $500,000 to a charity. Since he did not mention the adopted child in his Will, that child, Chris, files a claim. The court awarded him $500000, which is considerably greater than what his actual sons get i.e around $200000 each.
Hence, it is essential to update your Will after such vital events.
- Death of a Beneficiary or Executor
Likewise, after the death of a beneficiary or an executor, the Will-maker should make the due change and name a new executor or beneficiary.
Failure to do so can lead to a prolonged process of probation.
It can also cause disputes as to your intentions regarding the non-designated assets.
In addition, after a beneficiary’s death, his inheritance share will be considered a lapsed gift.
If you did not name any alternate beneficiary, the unallocated assets will be dealt with as if the deceased had made no Will originally, to the extent of that asset.
- Changes in Assets and Finances
Changes in finances are also a potent reason for the need to alter your Will. Following are some conditions when that happens:
- Acquisition of new assets All assets are subject to deemed disposition at your death except for some exceptions, like insurance money, investments subject to spousal rollovers, etc.
It would help to mention all the new assets you acquire in the Will.
Otherwise, some assets may not have any designated heir, which may lead to complexity in the estate distribution process.
- Investment in properties or businesses Investments in properties or businesses have consequences for your assets and inheritance. Some assets will accrue more taxes, and the others less.
If you do not address them in your Will, their different kinds and resultant tax liabilities can cause disparities in the share that the heirs finally get.
- Evolving Wishes and Preferences
Our wishes and aspirations continue to change and evolve. More than merely deciding in your mind on devolving an asset to a beneficiary is required. Your changing preferences must find their way to the Will document. There is no certainty as to how long a person lives. So, his desires should be in a document form.
- Updates in Canadian Laws and Tax Regulations
New regulations can lead to new tax realities. For example, the government may introduce new taxes on a particular asset. Not wanting any beneficiary (particularly the recipient of the increased tax-incurring asset) to be at a loss, you should change the Will to ensure that parity and equity prevail.
Moreover, to maximize your estate tax savings, you should reconsider the plan for distributing the assets in your Will, which would require a change in the Will document.
- Review of Will with a Legal Professional
A periodic review of a Will shows responsibility towards the vital estate management duties. Having a professional examiner’s Will ensures that there are no loopholes and that the document suffices for all the related legal consequences.
In this scenario, you should not hesitate to make a change in the Will if any such need arises.
- Ensuring The Suitability and Availability of Individuals Chosen as Executors
Human relations, just like human beings themselves, continue to change and evolve. To make sure that your Will sees its execution correctly, you must ensure that you have nominated an efficient executor.
If the person you had previously nominated is no longer available, is not satisfactory for you, or is unwilling, you ought to change the Will and appoint a new executor.
- Health and Incapacity Considerations
If you face any new health-related incident or even apprehension, you should nominate a trustworthy person as your decision-maker, who will act on your behalf when you no longer can. Such a nomination can require changing the Will or issuing medical power of attorney. Doing some documentation might save a lot of future hazards.
Bottomline
Making changes to a Will is as important as making the Will itself. Take time to make changes–so that after your demise, your grieving loved ones do not have to face any discomfort.