Life is unpredictable – that’s what makes it so exciting (most of the time). But that doesn’t mean you can’t plan for the BIG moments, the kind that can spin your family’s life out of control. Protect your kids with a will. Here are five reasons why a will should be an integral part of your life plan:
- Guardians. Your will is your only opportunity to appoint a guardian to have custody of your children should something happen to you and your spouse. The appointment is only temporary for 90 days but it’s a great start towards permanent status.
- Gifts to minors. Minors generally cannot inherit property directly. If you die without a will and your child automatically inherits by the default inheritance rules, the money would have to be paid into court until they turned 18. There’s little opportunity to grow that money and severely restricted ability for anyone to access that money to support your child’s needs before they are 18. You need a trust to properly manage that money and set the terms of what can be paid out when to help the child succeed in life. But that needs to be set up in your will BEFORE you need it!
- Set Ages for Inheritance. Without a will, receiving a windfall life insurance payment or inheritance at 18 might not be most parents’ ideal age. A trust created in a will can push the date out (e.g. 25, 30) or even stagger distributions so children receive some at 18 , some a few years later and the bulk at 30 when they are established and more settled in life.
- Beneficiary Designations. Most new parents have life insurance or RRSPs/TFSAs with the other parent as primary beneficiary and then the kids as alternate or contingent beneficiaries. This is a huge problem if those kids are under 18 for the same reason above. You need to have the money go into a trust for the kids for maximum flexibility. Overlooking beneficiary designations is a huge no-no, and any wills and estates lawyer worth their salt should ask about them (if not, look elsewhere!).
- RESPs. Despite popular belief, RESPs are not trusts for your kids. They are the property of the subscriber (usually the parents). If you die without a will, they will likely be terminated and folded into your estate to be appropriately distributed. But, in your will you can stipulate that you want the RESP to be continued for the benefit of your children since that it what most people want!
CALL or EMAIL me if you have any questions. I’m here to help.