Out of the many Wills that I might review each year, only a small percentage are prepared by individual clients without input from a lawyer. Some of these Wills are drafted by the individual and some are simply Will kits that are filled in by the individual.
In almost every case however, mistakes are made — in some cases costing an estate a great deal of money for additional legal fees after an individual's death (not to mention possible conflict between named and possible beneficiaries) and in other cases simply carrying a potential of future problems.
The following are the top six mistakes that are made when creating a Will. I see all of these (not all at the same time) a few times each year. Regardless of when, where or by whom your Will was drafted, it's a good idea to review your own Will to see if, by chance, you have any of these problems. 1t might also be a good idea to review your Will in any event. I normally suggest that a person review his/her Will every five years.
MISTAKE No. 1
Not having an alternate executor named in your Will. If your first named executor has predeceased you or is otherwise unable or unwilling to take over your estate administration, you should have a second or backup executor named. You may not care about this but if you have instructions or discretionary powers for the executor in your Will, it is a good idea to know who your executor may be and that he/she/it will carry out those duties. If there is no alternate executor named in your Will, the executor of your predeceased executor will be appointed your executor. Failing this, any of your children over the age of majority, any other family members or any other person with an interest in your estate (creditor) can apply to the Court to be named your executor.
MISTAKE No. 2
Not dealing with all of your assets in your Will. This usually occurs through inadvertence. Your Will may specify who gets the bank accounts, the house, the investments, your personal possessions but if you have any other (or acquire any other) assets that are not specifically dealt with in your Will, there is an intestacy with regard to the not otherwise specified assets. In most professionally drafted wills, there is a "residue" clause that deals with those assets that are not otherwise dealt with.
Regardless of whether you feel you have nothing else to leave, ensure that you leave the residue or the remainder of your estate to some beneficiary or beneficiaries.
Intestacy occurs when there is either no Will or there are estate assets which are not dealt with in the Will. In such occasions, the provisions of the Succession Law Reform Act ("SLRA") will apply. The SLRA is an Ontario statute and has been in existence in one form or the other for decades. The SLRA states that in an intestacy, the deceased's spouse (if alive) will receive the first $200,000 of the intestate assets with the rest of the intestate assets split between the deceased's spouse and the deceased's children. If the deceased's spouse is not alive, then the intestate assets are split among the deceased's children and failing them, the deceased's grandchildren. If no children or no grandchildren are alive, then the intestate's assets are divided among the deceased's parents if alive and if not, then the deceased's aunts and uncles, then cousins, etc.
MISTAKE No. 3
Not providing for the situation where one or more of your beneficiaries die before you. In most Wills, provision is made for this. Very often, wording is included in an individual's Will that provides for an alternative beneficiary if the first named beneficiary predeceases that individual. At other times, the bequest to the predeceased beneficiary simply falls back into the residue of the estate and is dealt with in that manner.
If the Will does not say what is to happen to this bequest then Section 31 of the SLRA applies. Section 31 of the SLRA states that where there is no alternate provision in a Will to say what happens to a beneficiary bequest and if that beneficiary leaves a spouse, children or siblings surviving, the bequest is shared equally between the beneficiary's surviving spouse and children (if alive) and if the beneficiary's spouse and children are not alive, then the bequest is shared among that beneficiary's siblings.
This may or may not be what the deceased would have wanted and this inadvertent result can be corrected if an alternate beneficiary is named for the bequest or the bequest is stated to be returned to form part of the estate residue.
MISTAKE No. 4
Not providing for your personal possessions. While not always the most valuable component of an estate, a deceased's personal possessions often are the most emotionally valuable. If there is something that you want to be sure goes to a beneficiary, make sure that this is put directly in your Will. If you feel it would be nice to have a particular item go to a beneficiary but you really don't care that much, then make a memorandum (or a letter) that you can leave with your Will or give to your executor (better to leave with your signed Will to ensure it does not get lost). This memorandum will be a set of wishes that you have requested your executor to follow. Because this memorandum is not part of the Will document, the executor does not have to follow your wishes. The reason, however, that you have picked a particular individual as an executor is because you believe that he or she will follow your intended instructions.
Normally, personal possessions do not include bank accounts or land but sometimes do include automobiles. Quite often this memorandum will not cover all of the deceased's assets. Those assets that are not otherwise included in the Will or memorandum will be disposed of by the executor as he or she sees fit and any proceeds received on the sale of the remaining assets will be included as part of the estate residue.
MISTAKE No. 5
Not providing an age for an under aged beneficiary to inherit. The default is the age of majority unless otherwise specified in your Will. These days, I am seeing ages of 23, 25 and 27 as more common ages for beneficiary children (or grandchildren) to inherit. Normally though, the executor is given the authority to use the beneficiary's share for the benefit of that beneficiary before the inheritance age. Quite often as well, the Will provides that the beneficiary is to receive his/her share at several stages or ages (perhaps 21, 23 and 25).
MISTAKE No. 6
Deciding to amend your Will yourself after it has been signed. I see this several times every year. In every case but one, the amendments were not done correctly and the result was that either the Will or the amendment to the Will was invalid. The Ontario statutes have strict rules on how a Will must be signed and amended. If these rules are not followed, the amendment will certainly be invalid and, perhaps, the invalid amendment will also invalidate the Will itself. My suggestion is to not try to amend your Will yourself no matter how simple you think the change should be.
Wills are an essential part of estate planning. To not have a Will at all is probably the greatest disservice a person can do to his/her beneficiaries. To have a Will that does not cover all eventualities is next in line. Unfortunately, thinking of death and Wills is not upper most on the "to-do" list of most people. I suggest that you add "review Will" to your 2013 "to-do list" and check to see if any of my top six mistakes apply to your Will.
John Peart is a partner with the Ottawa law firm of Nelligan O’Brien Payne LLP and part of its Wills and Estates Group. John is Certified as a Specialist (CS) in Estates and Trusts Law by the Law Society of Upper Canada and is also a member of the International Society of Trust and Estates Practitioners.
[This article originally appeared in the May 2013 issue of Fifty-Five Plus Magazine.]