A few years back, roughly seven to be exact, we started thinking about the level of service that we were offering to our clients and in turn the level of service that most advisors were providing to their clients. We struggled with the idea that in order to provide our clients with the best advice for all of their financial needs, I felt like I needed to vastly improve my education.
This ultimately would have been an impossible task as there is no way to be all things in all areas needed and so we chose a different path which was to build out our team and bring in specialists in the various different areas required. This ultimately became a core belief behind our business. In order to provide the best advice it needed to be specialized advice, and in order to provide specialized advice we needed specialists.
In light of building out our team this way we are able to provide clients with a variety of services which all contribute to building a cohesive financial plan. One of our external specialists, an estate and trust lawyer, has done a great job of helping to ensure that our clients' best wishes are being taken care of in the event of their death and she is continually reminding me about the importance of asking whether or not clients, or new people we meet with have wills and power of attorney in place.
Some of you may be surprised to know that the vast majority of new clients we sit down with do not have a will in place despite having sizable assets (if you are in this boat don't worry, you're not alone). It goes without saying that if you have sizable assets or dependants it is important that you have a will in place, along with a power of attorney and also a health care directive. I understand that this is a topic which most people don't like to discuss. Obviously talking about your own death isn't that fun, but we thought it would be worthwhile discussing what happens if you do die without a will. Perhaps it might light a fire under you to get it taken care of.
First, your assets will be divided according to the law which may not be in the manner which you would have chosen. For example, if you are not close with your nieces and nephews who happen to be you're next of kin and you would prefer a charity receive the benefits of your estate, this could have been planned for with a will.
Second, there may be extra time delays and expenses involved in wrapping up your affairs which could cause additional hardship for your family which is already grieving. If you die without a will, the law states that you have died 'intestate' which means that you have died without leaving valid instructions as to how your property is to be divided and distributed. Under these circumstances, your property will be divided according to the laws of the province in which you live. In order to know exactly what this would mean for you we would have to look at the specific province you live in and the laws. Here are some general guidelines for what would happen:
In all provinces except Quebec, your spouse inherits everything. A spouse is defined in provincial legislation as someone who was legally married and in some provinces include common-law partners. If you have a spouse and children
In BC, MB, NWT, NS, Nunavut, On, SK and the Yukon, spouses are generally first entitled to a preferential share of the estate before it is divided among heirs. Some provinces may give more or less to your children if they are also your spouse's children. This amount can vary depending on the province or territory.. Anything left over is called the residue and if anything is left over it is divided between your children and spouse in the proportions which are set out in the laws of any particular province.
Generally the children each inherit an equal portion of your estate, followed by the grandchildren and great-grandchildren, if any.
Your parents inherit your estate.
Your siblings will divide your estate.
Your nieces and nephews each inherit an equal portion of your estate.
Any other next of kin inherit an equal portion of your estate together with the next of kin of the same degree of kinship.
Your estate may be paid into the government to be held in trust until such time as a next-of-kin is identified. Keep in mind that in order to understand exactly what would happen in your situation we would need to know which province you live in. Depending on where you live could mean large differences from what we have written above.
In addition to the rights of any person that would benefit from your estate under intestacy, many other laws may affect how your assets are distributed, including family and property laws, and dependent relief laws. Needless to say, if you have assets and/or dependants who you care about, it would be wise to have a will created and taking the guessing game out of where your assets will go in the event of your death.
If you have any questions on this, feel free to reach out to us. As I mentioned, our team has extensive experience and our specialists would be happy to provide you with guidance no matter what situation you are in.
- Grant White, CIM, CFP
Grant White is an award-winning Portfolio Manager/Investment Advisor at Endeavour Wealth Management with Industrial Alliance Securities Inc. Together with his partners he provides comprehensive wealth management planning for business owners, professionals and individual families. Industrial Alliance Securities Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Securities is a trademark and business name under which Industrial Alliance Securities Inc. operates.
This information has been prepared by Grant White who is a Portfolio Manager for Industrial Alliance Securities Inc. (iA Securities) and does not necessarily reflect the opinion of iA Securities. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Portfolio Manager can open accounts only in the provinces in which they are registered. This cannot be interpreted as legal advice, please consult your attorney.
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