Do you have a will? Read on to see why you should have a will and information on the new legistlation for wills that came into effect earlier this year.
Tax Question:
What are the new rules for wills and why do I need a will?
Facts:
The new Wills and Estates Succession Act (WESA) came into effect March 31, 2014. There are major changes for those people that do not have a will. There are only minor changes for those who currently have a will.
Discussion:
Everyone should have a will to facilitate the distribution of your possessions and assets upon death. A will is also important for the following reasons:
- appointing a guardian for any of your children under the age of 19
- appointing a representative to look after your affairs, which is called the executor
- designating a certain age for your beneficiaries to receive their inheritance
- avoiding the provincial laws if you die without a will such as the government appointing a public guardian and trustee for your children
- reducing the cost of administering your estate
- business succession planning
Here is a list of major changes as per the WESA for a person who dies without a will:
- the spouse is entitled to $300,000 if all the children are shared with the deceased (previous spousal share was $65,000). The spouse only gets $150,000 if the deceased’s children are from another relationship
- the spouse receives 50% of the balance of the estate not including the matrimonial home (previous spousal share was split equally with the children)
- the children will get the remainder of the estate to be split equally (previous share split equally with spouse)
- the spouse does not get a life interest in the home (previously the spouse did have a life interest in the home). The spouse will have a right to purchase the matrimonial home or elect to have it considered to be part of the estate
- different distribution rules for those who do not have a spouse or child. The new rules will be based on closeness to a parent rather than just blood relations
- new probate rules and forms which are required to be sent to all beneficiaries and heirs
A will should be reviewed when there is major change in your life such as a birth, death, marriage or marital breakdown in your family. You may also want to change the will if you have a substantial change in assets/liabilities or if there is a change in tax laws.
Recommendation:
If you would like more information on estate planning or business succession planning, please contact us at Gilmour Knotts Chartered Accountants.