Estate planning is a tricky topic for most people. It can be morbid and awkward but is often very illuminating. When we prepare wills for our clients, we often hear them say, “we can redo this in five years.” However, most of our clients never do revise their wills so our goal is to spend the additional effort to create something to stand the test of time. With that in mind, there are some big decisions that need to be made to create a will that lasts and reflects your wishes. The following three elements of a will are the ones that I consider most important.
- Executor (and Alternates)
When you begin estate planning, one of the first questions is usually, “who do you want to be your executor?”. This is the person (or persons) who will gather up all of your assets, pay your debts, and administer your estate. They are generally the trustee of any trusts that you create. On its face, this is relatively simple – most people pick the family member with whom they are closest. A lot of clients initially want to pick two or more people to act jointly.
Here’s the thing: being an executor can be a lot of work. The job goes most smoothly when the executor has a good grasp of finances (or a good advisor) and can handle potentially disgruntled family members. The best executors are the most organized ones. While clients often want multiple executors, that can lead to more fights than amicable estate distributions because the executors have to work together and agree. Thus, we generally recommend a primary executor, with at least two alternate executors. We often suggest that at least two of them be your age or younger, just to ensure that the Will can stand for some time.
Because the executor essentially stands into your shoes and handles nearly every aspect of your estate, this is possibly the most important decision in preparing your Will.
- Distribution of Assets
This is usually the question that starts people down the path of estate planning: “where do you want your stuff to go?”. For many people, this answer is an easy one: my spouse/partner, and my kids when they’re old enough. If the answer isn’t that easy, this could be more of a consideration. Even if you know you want your estate to go to your spouse and your kids, questions remain:
- Do you feel comfortable gifting everything to your spouse/partner initially and relying on them to provide for your children, if you are the first to pass away?
- At what ages do you want your children to inherit their gifts?
- In what proportions?
- What do you want to happen if the whole family passes at the same time?
- Are there any individuals to whom you do not wish to gift assets but who may have a claim against the estate, such as dependents or former spouses?
Lawyers who prepare wills must ask these questions, which are sometimes awkward but always necessary. The aim is generally to set up a distribution that works well if the client passes in weeks, years, or decades, and that works in both best-case and worst-case scenarios.
- Trust Setup
If you are gifting parts of your estate to your children/nieces and nephews/friends’ kids, but not until they reach certain ages, you are creating a trust. You can get pretty creative, depending on when you think the young beneficiaries will be old enough to not squander your hard-earned riches. You may create other types of trust in your will as well, perhaps for a family member with a disability or problematic spending habits. Your executor can serve as a trustee, or you can appoint someone else.
As soon as you create a trust, your estate will take longer to administer. Make sure that you select a trustee with longevity and the ability to administer the trust thoughtfully. Finally, talk to your advisor about standards of care. It sounds like a boring legal concept but, if you don’t address it, your trustee may be held to an extremely high standard of care while maintaining and administering the trust. While that may work for some sophisticated trustees, you may wish to merely require them to act honestly and in good faith.
Estate planning necessitates serious conversations, but it is an excellent way to assess how you want your affairs to shake out once you are gone. It is also commonly a great conversation starter with your family and your accountant. You can of course prepare a will on your own, or using the internet, but may miss out on some of the “worst-case” questions that your lawyer will ask you. We encourage you to seek some advice on your estate sooner rather than later, in order to not get caught empty-handed on a plan. Using the above three important items, you’ll be well set to advise your lawyer on your biggest decisions.
Chaylene L Gallagher
Chaylene Gallagher is a fifth-year associate at Bryan & Company with two primary areas of practice: wills and estates and labour and employment law. She also maintains a broader practice in civil litigation, particularly in more complex shareholder dispute and construction litigation.
Chaylene offers a full-service practice, where she is part of her clients’ team. She takes pride in being a trusted advisor and is both responsive and strategic, efficiently resolving current issues and helping prevent future ones. Chaylene is a member of the Canadian Bar Association and a certified graduate of the LESA Annual Intensive Advocacy course.
She serves on the board of ABC Head Start, a charitable organization providing educational and social services to at-risk preschool children. She regularly volunteers with Student Legal Services at the University of Alberta and other charitable legal initiatives.
Chaylene enjoys distance running, baking, painting, reading, and spending all the time she can at the lake.