Yes it's important to have a will, but simply having one isn't enough. It is equally, if not more important, to regularly review your will to make sure it is up-to-date with major life events and changes in estate law that could impact your intended wishes or even invalidate your entire will. So what exactly is a 'major life event' that constitutes a review? The following list identifies some common circumstances and their effect on your will.
Change in marital status
Did you know that in Ontario your will is automatically revoked upon marriage (unless the will specifically states that it was made in contemplation of such marriage)?
Common law marriages are not recognized in Ontario for the purposes of succession and thus a common law spouse has no right to the property of the deceased unless specifically outlined in the will.
A separation alone will not affect the validity of your will or any of the appointments or gifts in it. If you are separated, fail to update your will, and you die before your divorce is finalized, then your spouse will still receive all gifts and appointments as laid out in the existing will.
Divorce, unlike marriage does not revoke your will but rather the appointment of your former spouse as an executor and/or any gifts to your former spouse will be treated as though your former spouse has predeceased you. The Executor appointment and gifts in the will will go to the backups named (if any).
Don't forget to also review your beneficiary designations on insurance policies, RRSP's, TFSA's etc.
Creation of dependency
The most common creation of dependency is the birth of a child. If you do not provide “adequate provision” to a dependent under the terms of your will and were providing support to such person or had a legal obligation to provide such support at the time of your death, your estate may be subject to a dependent support claim. It is also important to ensure you have appointed a trusted guardian for minor children and have taken steps to provide for them financially.
If you have a child with a disability, reviewing your estate planning options can allow you to ensure that your child is cared for when you are gone. Without proper planning measures, your child’s access to government benefits could be clawed-back or taken away entirely.
Death of the executor
If your appointed executor predeceases you and there is no named alternate, the courts will select a personal representative from your next of kin. It should be noted that the court has substantial discretion in the appointment of a personal representative and it may end up being someone you would not have chosen for the task.
Moving out of province/country
Each province in Canada has different laws governing estate succession and planning strategies used in one province may not be valid or effective in another. Moving to another country or acquiring assets in another country adds an even further level of complexity to your estate plan and would require revisiting your will with a specialized cross-border estate lawyer.
Change in financial situation
Recently come into a large sum of money or set up a new business? There may be special estate planning strategies that can be utilized to effectively distribute your estate in the most tax-efficient manner.
The situations above are only some of the possible reasons why you should review your will. Our general rule of thumb is to revisit your estate plan every 3-5 years or at the time of a major life event. If you would like to be put in touch with one of our estate planning lawyers, please contact us.
Posted In: Estate Planning