No one wants to dwell on a topic like their own demise, but it is one that needs to be discussed as part of your overall financial plan.
How do you want your assets divided when you pass on?
It’s a complicated issue, and one that you will need to think about carefully.
The worst thing you can do is put off dealing with this issue because it makes you uncomfortable.
Talk to your financial advisor, get some legal advice, and avoid these common mistakes that far too many people make when it comes to updating your estate plan.
Mistakes to Avoid When Updating your Estate Plan
1. Failing to Make a Legal Will
What happens if you die without a valid will in British Columbia? As of March 31, 2014, the Wills, Estates and Succession Act determines how your estate will be divided.
Your spouse would be entitled to $300,000.00 from your estate. He or she would also be entitled to the household furnishings and half of the residue of the estate — regardless of the number of children you have.
The law does not guarantee a surviving spouse the right to remain in the matrimonial home after you pass away. Your surviving spouse does have the option of using the $300,000 he or she is guaranteed to receive to buy the matrimonial home from the estate. (If you own your matrimonial home as joint tenants, this provision does not apply.)
The legislation also deals with the situation of people who die without a will and who have children from a previous marriage. In this instance, your current spouse’s entitlement is cut in half to only $150,000.00. The balance of the estate is divided in half, with one portion going to your spouse and the other one being split among your children, regardless of which marriage they were born from.
2. Neglecting to Update your Will
Your will should be updated as circumstances in your life change. If you get divorced, you will probably want to make a new will (unless you want your former spouse to inherit a portion of your estate). You will also want to write a new one if you decide to remarry.
Other situations where you will need to update your will would be if one of the beneficiaries dies or if you sell an asset that you mention in it. If you acquire a major asset, you’ll likely want to update your will to provide instructions for it on when you pass on. You may also change your mind about how you want your estate divided, and this will mean consulting a lawyer to make changes to your will.
Once you update your will, consider registering a wills notice with the Vital Statistics Agency. You would pay a small fee to register a document stating that you have made a will and where it is kept. The Agency does not keep a copy of your will or have access to any of its contents. Your next of kin would be able to search the Wills Registry to make sure that they have the latest version of your will after you pass on.
3. Writing your Will on your Own
Going the DIY route is not the best choice when making your will. You may miss out on some important details that can make a big difference to your estate, such as failing to include all of your assets or using incorrect wording. This is a situation where you really need to consult with an attorney.