Creating a Will is a vital step in ensuring your assets are distributed according to your wishes. However, there are common misconceptions that often deter people from taking action. Let’s debunk these myths and highlight why creating a Will in Alberta is essential:
Myth 1: “Everything Goes to My Spouse”
- Reality: Not always. Without a Will, if you have children, its possible that only a portion goes to your spouse, potentially leaving them financially strained.
Many married couples assume that if they pass away without a Will, everything will automatically go to their surviving spouse. However, this isn’t always the case. For example, under the current provisions, if the deceased spouse has children, a minimum amount as stated in law will go to the surviving spouse along with personal belongings. Any remaining assets in excess of this minimum amount will be divided equally among the deceased’s children, creating potential complications in asset distribution and potentially leaving the surviving spouse inadequately provided for.
Myth 2: “My Unmarried Partner Will Be Taken Care Of”
- Reality: Unmarried partners need a Will to inherit assets. Jointly-owned assets may not pass automatically, causing unintended consequences.
Unmarried partners, regardless of how long they’ve been together, may inherit assets from a common law partner but subject to certain limitations being the amount as stated in law or 50% of the estate. While certain jointly-owned assets may pass automatically to a surviving joint owner, this depends on the nature of joint ownership. The limitations and complexities for unmarried partners dying without a will can cause financial and emotional hardship. It’s therefore crucial for unmarried partners to create a Will that reflects their wishes in such circumstances.
Myth 3: “My Children Will Be Looked After”
- Reality: Intestacy rules (dying without a will) don’t address guardianship or protect children adequately. A Will lets you decide who cares for your kids and when they inherit.
The intestacy rules don’t adequately protect children for several reasons. First, they don’t address who would care for any children if both parents die before they reach 18. Without a formal appointment of guardians, family members or friends would need to apply to the court for necessary powers. By creating a Will, you can designate who should care for your children in case something unexpected happens before they turn 18.
Second, if you die intestate and your spouse survives, the surviving spouse could create or modify their Will, potentially disinheriting your children after your passing. Specifying your wishes for your children’s inheritance in your Will can prevent this. Third, you may want to set conditions for when your children inherit your assets upon your passing. You might feel that 18, 21, or 25 years old is too young for them to inherit, so outlining a plan or including a trust in your Will can address this. Lastly, it’s important to note that the intestacy rules don’t provide for step-children.
Myth 4: “No Impact on Taxes Without a Will”
- Reality: Your tax situation can differ significantly with a well-structured Will, potentially saving your loved ones from unnecessary tax burdens.
Some people assume that their tax situation will remain the same whether or not they have a Will, but this is not accurate. Inheritance tax rules are complex, and structuring your Will in a particular way can potentially maximize available inheritance tax reliefs and prevent your estate from paying more tax than necessary thereby leaving more to you beneficiaries.
Myth 5: “Everything Goes to the Crown”
- Reality: This rarely happens. The Crown benefits only when there are no surviving relatives, ensuring your assets go to your intended beneficiaries is vital.
You might have heard jokes about needing a Will to prevent everything from going to the Crown. In reality, this only happens in very rare cases, and the Crown would only benefit if the deceased had no surviving relatives, including parents, grandparents, siblings, aunts, uncles, nieces, nephews, and their respective descendants. This could lead to distant family members inheriting from a relative they’ve never met or didn’t know existed. Creating a Will ensures that only those you wish to benefit do so, whether they’re family members, friends, charities, or other organizations.
In summary, creating a Will in Alberta is not only about asset distribution but also about safeguarding your family’s future. Dispelling these myths emphasizes the importance of proactive planning for your peace of mind and your loved ones’ well-being.
To ensure the accuracy of the information and to understand the specifics of your situation, it’s crucial to consult with a qualified legal professional or review the most recent legal guidelines in Alberta related to Wills and estate planning. Legal requirements can change, and individual circumstances may vary, so personalized legal advice is essential.