The Wills and Succession Act of Alberta gives every person the right to distribute their assets, upon death, to anyone they choose. Yet many people do not take the steps they need to take to properly exercise this right. A will and an estate plan is the only way to ensure that your wishes are honored after your death. While facing the reality of your own eventual death is never pleasant, it does empower you to take care of the people who matter most to you. You’ve worked hard to gather assets all your life. Shouldn’t you leave the legacy you hope to leave? The estate planning team at Merchant Law is here to help you do just that. Our estate planning lawyers here in our Calgary SW office have the experience and perspective you need to craft a solid estate plan that will meet your goals and aims for the future. Reach out to us today to get the help that you need.
Who should invest in a formal estate plan?
Many clients are confused about why they might need a lawyer to put together a will and an estate plan. After all, all you really need to create a legal will is a written document that clearly communicates your wishes after death, one that is witnessed by two individuals who are not beneficiaries of the will. Alberta even allows handwritten wills, also known as holograph wills. It is true that some people have simple lives and assets and so do not require a very complex will. For these individuals writing their own will or even using a software package will be sufficient. Yet you should be very sure that your life is simple enough. Most people’s lives are anything but simple. Do you:
- Have children from multiple marriages?
- Own more than $250,000 worth of assets?
- Own more real estate than your primary home, such as vacation homes, AirBnB properties, commercial properties, or rental properties?
- Want to give any part of your estate to charity?
- Own a business, or multiple businesses?
- Own intellectual property, and receive income from licensing fees or royalties?
- Have minor children?
- Have a desire to plan for relatives other than adopted children or blood children, such as step-children, grandchildren, or siblings?
If you answered “yes” to any of the above questions then you would benefit from a wills and estates lawyer who can ensure that your wishes are carried out after your death. You should also consider reaching out to a wills and estates lawyer if there is any part of the process that you don’t understand very well. This can give you the peace-of-mind that comes from knowing that you’ve used the correct legal language to communicate your wishes and secure your family’s future.
What happens if you die without a will in Calgary, AB?
If you die intestate then the Wills and Succession Act outlines a default schedule for how your assets will be distributed. Priority goes to your spouse, especially if you have children in common. This also includes common law spouses or adult interdependent partners. If you have children in common and there are no children from a previous marriage then your spouse gets everything. If there are children from a previous marriage your spouse gets half the estate and the other half will be distributed among your children. Note that step-children are not eligible: only your natural-born or adopted children may inherit. If there is no spouse and there are no children then the courts start moving through your next-of-kin in the following order: grandchildren, parents, siblings, nieces/nephews, and still more distant next-of-kin, if they can be located. If no blood relatives may be found the entire estate reverts to the province of Alberta. Few people like the idea of their assets going to the government, and while this is rare it nevertheless does happen. Even if next-of-kin can be found are you so sure you would be happy with that result? This default inheritance schedule makes no allowances for the needs of anyone involved. They make no allowances for the state of your relationships or whether or not you were even on good terms. For most, the default schedule is simply an unacceptable eventuality. Most people prefer to plan their estate with a well-crafted will.
Estate Planning Checklist
To have the most productive estate planning appointment possible you need to make sure you are prepared. Here’s what you need to gather and do before meeting with your lawyer.
- Speak to the person who you hope to make the executor of your will, if you don’t plan on making your lawyer into that person. Obtain their permission to name them and verify their contact information.
- If you have minor children, speak to the person who hope to appoint as your children’s guardian. Obtain their permission to name them and verify their contact information.
- Gather bank statements for all accounts, all types.
- Gather tax returns.
- Gather deeds for all real estate.
- If you have income-bearing real estate, gather profit and loss documents for these properties.
- Gather titles for all cars, trucks, RVs, and boats.
- If you have collectables such as paintings, coins, comics, antiques or other art, make a list of these properties.
- Gather life insurance policies.
- If you own a business gather all business agreements, as well as profit and loss statements and information on your business partners.
- If you own income-bearing intellectual property bring those licensing agreements or royalty agreements.
- Gather stock and bond certificates.
- Gather copies of all of your bills and debts.
- Gather contact information for all beneficiaries, including name, address, phone number, DOB, and social insurance numbers where possible.
Once you have all of this documentation in place, make an appointment with your lawyer. You’ll have everything you need to give your lawyer a thorough understanding of your estate, as well as to help your lawyer meet all of your goals for your estate.
What is probate and how does it work?
Probate is the legal process of validating your will in court and authorizing its execution. While many people speak of avoiding probate it’s not always desirable to do so. In many cases, probate protects you and your family. Nevertheless there are ways to pass assets to beneficiaries outside the estate, thus keeping them out of the probate process. You can do this through additional estate planning vehicles, like trusts. Alberta has some of the lowest probate fees in Canada, and probate isn’t something you should spend a lot of time worrying about unless you have left your will open to challenge by failing to put a proper estate plan into place. If you have no will, or have a poorly-constructed one, probate could indeed end up overturning your will, or will be the process by which your assets are distributed when you die intestate.
How much does a will cost, and how long does it take to make one?
If you come fully prepared for your appointment you should only need to plan an hour or two to sit down with your lawyer. From there your lawyer can generally have the will done in 24-72 hours. More complex estate planning vehicles, like trusts, may take about a week to put into place. Wills are a very affordable investment. You can generally get one done for $300 to $3000.
What’s the difference between a will and an estate plan?
A will is one document in an overall estate plan. Your estate plan might also include trusts, insurance plans, buy/sell agreements, and joint ownership of properties. It may also include succession planning for your business. Some individuals won’t need more than a will, but you shouldn’t make assumptions until you meet with your estate planning lawyer. The more complicated your assets, the more estate planning will be necessary to help you meet your goals.
What is a trust?
A trust is a legal vehicle for holding certain assets. Trusts commonly hold bank accounts, but they can hold other assets, like real estate. Each trust comes with a trustee, an individual who has a fiduciary duty to you and your beneficiaries. They manage the trust and distribute funds according to your wishes. There are two types of trust. A testamentary trust passes to beneficiaries in the event of your death, once your will has been probated. A living trust passes directly to your beneficiaries upon your death. While you cannot leave conditional gifts in your will you can place conditions on the use of assets placed in trusts. For example, if you are trying to meet basic living expenses for a loved one you can set up a “spendthrift” trust that will disburse funds monthly instead of gifting a relative with a lump sum of money. If you want to support a real estate business that will in turn support your relatives you could set up a trust that only pays out when a property needs repairs. Speak to your lawyer about how different trusts may be set up and what you’ll need to put yours into place. Trusts are a very powerful estate planning vehicle that should be treated with respect and given a lot of thought.
When can a will be challenged in Calgary, AB?
Wills may not be challenged simply because someone is unhappy with the will. Nevertheless there are specific people who can issue a challenge, and specific reasons why a challenge may be considered valid. Wills may be challenged by:
- Spouses and adult interdependent partners.
- Adult children.
- Beneficiaries of the estate.
- Your own lawyer.
- The Public Trustee.
Wills may be challenged when:
- You have dependents and your estate plan has failed to make adequate provisions for their support.
- Your will is legally invalid.
- You were not of sound mind and body when you last made changes to your will.
- The challenger can prove you changed your will because you were a victim of harassment, intimidation, or fraud.
- Your will is worded in a vague way that makes it impossible to understand your wishes.
- There are mistakes in your will which make it impossible to carry out your wishes.
To avoid challenges you should:
- Work with a lawyer to make sure your wishes are as clear and concise as possible.
- Review your will every three to five years to ensure that your will continues to reflect your financial circumstances and wishes.
- Ensure that you start your estate planning early so that you cannot be accused of being incapable of understanding your own estate.
When the will is challenged the court has several options. The judge may uphold the most recent version of your will. The judge may revert to an earlier version of your will. The judge may make certain adjustments allowed for by law to ensure that your dependents are cared for while honoring the rest of the will as much as is possible. Or the judge may invalidate the will and treat your estate as if you had died intestate. The more closely you work with a lawyer the more likely it is that your wishes will be honored by the courts.
Why choose a Merchant Law lawyer to put your estate plan into place?
Our lawyers have been helping our clients with estate planning for decades. We also have backgrounds in real estate law, business law, and civil litigation. This gives us a broad background for helping our clients create air-tight estate plans. We’re responsive, attentive, and easy to work with. Make an appointment today by calling (403) 237-7777. We have offices in Airdrie, Calgary Bowness, Calgary, Cochrane, Red Deer, and Edmonton, but we serve the entire province. We even offer remote appointments! If you live in Alberta, don’t hesitate to reach out. We can help. Call today to get started.