A will leaves you in control of your assets, even after death

Today, exercising seems to be the thing to do, except when it comes to exercising the power you have in your will. Nearly five in ten Canadians have not taken advantage of their right to make a will.

In legal jargon this is referred to as dying intestate. You might say: "So what! An intestate estate is settled by the government." Think about it... how would you feel if the government began to tell you how to spend your money? That's what happens when you die intestate!

When the government makes your will

Many Canadians assume that a will provided by the government is fair, equitable and a no-nonsense sort of thing. However, they forget that the law was written in a general way, and that legislators could not anticipate the infinite number of circumstances presented by millions of Canadians. Without a will, in essence, the government assumes the role of the deceased and decides how the estate is to be distributed.

An example of an intestate disposition

Dolores Smith, 42, was the main breadwinner in the family. She was killed in an auto accident, leaving her husband, Tom, and two minor children. There was no will.

Naturally, Tom assumed that her half of the estate would transfer to him. He was only half right. The house and chequing accounts, both held jointly, became Tom's property. However, the remaining $150,000 from securities and real estate was a different story.

After paying any debts, death taxes, probate and legal fees under provincial law, Tom would receive the first $65,000. The residue of the estate would be divided between Tom and his children. Tom would receive one third, and each child would receive one third.

Many surviving spouses find themselves in this all too real situation.

When there are no dependents

Tony Jones, 69, was a widower with no children. He destroyed his old will when his wife died, and never made a new one. Tony died leaving an estate of $120,000.

According to the government Tony's three nieces would share the estate equally. One of the nieces, Florence, remained close to Tony all his life. The others moved away and forgot about him. Under the law, all would receive equal treatment.

Decisions, decisions

A will is a legal document which enables you to retain control of your money, even after you've died. Making a will is not complicated. You only have three decisions to make.

• The first decision is to name your executor. Your executor will manage and distribute your estate as you have directed in your will. Remember that without a will the government will appoint an executor, perhaps not someone you would have selected yourself.
• The second decision is to select a guardian for any minor children, in the event your spouse does not survive you. The courts take into account the wishes of the deceased as stipulated in the will. Without a will the courts cannot know your intentions.
• Finally you make the decision on how to distribute portions of your estate among family, friends, and charities closest to your heart. This is known as planned giving.

Tax savings

An accurate and properly prepared will can help the testator (the maker of the will) avoid or defer some or all of these taxes. Leaving gifts to a registered charitable organization, such as the hospital, library or church will reduce taxes upon your death.

Probate costs

In essence, probate fees are another form of taxation. Probate is the fees charged by the government to settle the estate in court. The general practice is to charge a dollar value per $1,000 of estate, for example $14 per $1,000.

Your will is a privilege and a right

Exercising the power in your will is a privilege and a right. Don't relinquish your rights to the government.