Nobody wants to talk about death, but it is essential to ensure your wishes and affairs are taken care of properly.
Today I want to talk about your last Will, how you can create one, and why you need a Will.
How Death Can Affect An Executor Of The Will
When a loved one dies, the grief of death is often overwhelming and difficult to bear.
I know this feeling all too well, as my stepfather passed away in 2013 after a COPD diagnosis and several cancer recurrences.
If you’re a surviving spouse or a very close relative, you may have to oversee the funeral arrangements and burial or cremation rites.
During this time of mourning, it isn’t likely to be a forethought whether or not the deceased had a last will, significant assets or debts.
Settling an estate cannot be delayed for long, however.
Whether the deceased lived alone or had a surviving spouse, someone will need to assume the excellent task of sorting through the person’s financial life and personal belongings.
This is to meet the law’s requirements for settling an estate.
Last Will and Testament
Upon the individual’s death, one of the first questions that need to be asked is if the deceased had a valid last Will and testament.
There are commonly three types of Wills in Canada, which I will discuss below.
A formal Will is a typed document that outlines one’s wishes to sign in at least two witnesses.
Note that the witnesses cannot be beneficiaries or the spouses of beneficiaries.
A lawyer usually drafts formal wills as they are familiar with the proper wording and ensure that all issues are addressed.
Similar to a formal Will, a notarial Will is solely used in the province of Quebec.
The document is prepared by a notary and signed before the notary in the presence of a minimum of one witness.
The witness may also be a beneficiary or the spouse of a beneficiary.
A holographic Will is a handwritten document, signed by the person with no witnesses required and must be probated by a court or a notary if done in Quebec.
However, this option is potentially the most problematic because a holographic Will can be lost, damaged or destroyed.
They are often subject to misinterpretation and can be more easily challenged in court.
Check with your provincial government as some provinces do not recognize a holographic Will as a legal document.
Budget Options For Creating A Will
A cheaper option is using a Do It Yourself Will Kit, which uses a software program to generate pre-printed forms.
It’s up to you to review the pre-written legal terminology with this option.
According to the law, if the last Will is not worded correctly, it can render some of the provisions invalid.
My Experience In Executing A Will
My stepfather had listed me in his last Will to serve as the executrix of his succession.
Succession is the term used for an estate in Quebec.
He had also named his brother as an alternate executor if I predeceased him or if I chose not to accept the role.
My role as the executor was time-consuming and complex.
It took several months to complete everything that was required of me, mainly due to the processing times of the government.
There were several issues to handle when liquidating my stepfather’s estate properly.
You can hire an estate planning firm to serve as the administrator for those who don’t have the time, desire, or inclination to handle the details.
The administrator can help the executor/executrix navigate all government requirements, especially for large and complex estates.
I initially consulted with the family notary and accountant to clarify a couple of points, but I felt confident enough to handle the responsibility mainly independently.
Responsibilities As Executor of the Will After Death
The following summarizes the key responsibilities that I fulfilled in the role of executor for my stepfather’s estate.
- I asked the funeral home to conduct a notarial search in order to determine if the copy of the will I had was indeed the most recent one. The funeral home also filed the Act of Death (death certificate) request with the provincial government. These administrative services among others were purchased as part of the funeral costs.
- The funeral home requested the Quebec government the $2500 maximum death benefit payable for expenses related to his death. I received the cheque in about 4 weeks from the time it was requested. Note that this amount must be declared as income on the deceased’s final tax return. Check with your province to find out if they run a similar death benefit initiative.
- Notified both the provincial and federal governments of his death and ensured that they received a copy of the Act of Death (death certificate) along with a copy of the will. It took both government agencies about 4 weeks to enter on record that I was the executrix of his estate.
- Requested the cancellation of his SIN, medicare card, passport, other hospital cards and forms of ID.
- Visited each financial institution he had dealt with to close accounts and inactivate debit and credit cards.
- Opened an estate account and transferred the assets from his closed accounts. The assets were held until I was ready to distribute the proceeds.
- I called various companies to cancel any services he had contracted for.
- Completed a written inventory of his personal belongings, financial assets and liabilities.
- I reviewed his 2012 and 2013 tax returns to report his death before my accountant submitted them. Please refer to the government’s guidelines and timeframe for submitting a deceased final tax return.
- After receiving the tax assessments and paying any amounts owing, I applied for a clearance certificate from both the Federal and Quebec governments. This step was necessary because this granted certificate proved that any amounts owing to the government had been paid. I also felt more comfortable distributing the will proceeds after obtaining the clearance certificates. Note that it can take between 6 – 12 months before you receive the clearance certificate.
- My last act in the role of executrix was to pay any amounts owing to creditors, and distribute the net proceeds to the beneficiaries. I required a signed statement from each beneficiary that they received their share. I then closed the estate account.
Dying Intestate (Without A Will)
Someone who dies without a valid last will in Canada is one who dies “intestate”.
This means that the provincial government will be the one to decide how the deceased’s assets will be divided.
Every province has its own rules to define who can benefit from the estate and how much.
Usually, the legal surviving spouse and biological/adopted children become the beneficiaries.
Note that some provinces do not recognize a common-law spouse, which may lead the common-law spouse to petition the court for financial support as a dependent.
This decision can force the estate into litigation and lose money for the eventual inheritors.
Because the government cannot possibly know the true wishes of a deceased, you are strongly encouraged to make a legal Will to ensure that your intentions are honoured.
Resolving Debts After Death In A Last Will
Have you ever wondered what happens when a loved one dies and you learn after the fact that they had debts?
Well it happens more often than you’d think.
Besides the emotional loss you feel when learning that the person had financial secrets, you may worry that creditors can pursue you for repayment.
In short, nothing will happen to you directly as long as you are not contractually obligated towards their debt.
In other words, once you have never signed your name to a debt, you cannot be held liable to pay someone else’s debt – even that of a deceased spouse!
If a creditor ever contacts you to repay a debt you are sure you do not owe, ask them to provide you with a copy of the contract.
For a creditor to successfully collect on a debt, the deceased’s estate must have assets.
The assets will be liquidated to pay any creditor that has legally proven that the debt belonged to the deceased.
A payment to a creditor must be done prior to the distribution of any remaining assets to the beneficiaries.
Once it’s proven that the estate has no money, the creditor will have no other alternative but to write off the debt.
It is always wise to consult a legal professional before making any decisions concerning the debts of a deceased.
A Final Word Enacting The Last Will Upon Death
Please note that this article was written for general information purposes and based on my personal experience.
With time, the law and government procedures relating to death may change.
Consult with a lawyer or a notary for more information on Wills if you reside in Quebec.
The local and federal government websites may offer a free guide on what to do in death.
As well, many Canadian banks and credit unions offer fee-based trust and estate planning services along with free will planning guides that can be downloaded from their websites.
For detailed information on a federal clearance certificate, visit the CRA website.
Residents of Quebec can consult the Revenu Quebec website.
About The Author
Kassandra Dasent is a self-employed wife and step-mom striving to live life beyond what money can buy.
In addition to working as a freelance writer and business consultant, Kassandra blogs at More Than Just Money about a variety of topics and personal experiences that all intersect with money.
Subscribe To CBB To Get My Free Emergency Binder
Related Canadian Budget Binder Articles
- Canadian Law: Jury Duty in Canada can take its toll on your budget
- 5 Reasons You Won’t Get Out of Debt
- 5 Unusual Places to Stash Cash at Home
- Are Frugal Men Sexy And How To Potentially Spot One?
- How To Deal With A Shopping Addiction?
Photo Credit: Freedigitalphotos.net