94 – What Is the Importance of Last Will and Testament?

Wayne Kay 00:00
Welcome to the Debt Matters podcast, where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada. 

I’m Wayne Kay, and in today’s show, we are going to talk about the importance of your last will and testament. Yes, it might be a little uncomfortable, might be a lot uncomfortable to talk about it, but there’s a lot of reasons why we need to learn more about this. 

What do you need a will for if you don’t own anything? What if you don’t have children and everything is jointly owned between you and your partner? What do you do then? Or maybe your family knows what your wishes are and how they’re supposed to divide your belongings up and what does it cost? 

We’re going to talk about all that and more today with my guest, Francyne Myers from Allan Marshall & Associates, Licensed Insolvency Trustee with offices in Alberta, New Brunswick, Nova Scotia, Prince Edward Island and BC. 

Francyne, welcome to the show.

Francyne Myers 01:10
Thanks for having me, Wayne. I really appreciate it.

Wayne Kay 01:12
This is a depressing topic and it’s shocking how many people don’t have it. And I’m glad we are addressing the last will and testament.

Francyne Myers 01:22
Oh, isn’t that the truth? And people I speak to are like, well, I know I should have one.

But it’s one of those things you never really, really get around to sometimes. And then a lot of people also say, well, I don’t own anything, so why should I do one? Well, the problem is that people, when they’re thinking I don’t own anything, they’re thinking like, well, I don’t have land, I don’t have investments, I don’t have this, I don’t have that, which a lot of people don’t own. What they don’t realize is that you have a lot more assets or belongings that sometimes may be more valuable. And specifically these days we’re talking about digital assets.

These are assets that are stored digitally and are uniquely identifiable. It can be like your social media presence, documents, audios, videos, logos, slide presentations, spreadsheets. I can go on and on. I mean, websites, anything like that, which a lot of people have. A lot of people have an online presence which may be of some value.

There’s also websites with passwords, all sorts of things that people don’t think that these things are going to have to be shut down and taken care of. There’s automatic payments that come out, there’s renewals things that have to be shut down. Things that have to be transferred. So you do own something regardless – that has to be looked after. 

You also may own something of sentimental value. It doesn’t have to be very valuable. It can be a pair of earrings that you got from your mother that your daughter wants. It can be some china. It can be pottery. It can be things you collected towards your lifetime that may actually mean a lot to someone that you may not realize. Sometimes these things can be lost if you pass away and there’s no will actually mentioning how to deal with it.

Wayne Kay 03:04
So now I’ve got anxiety.

Francyne Myers 03:07
Oh, no, Wayne, that’s not what I wanted to do.

Wayne Kay 03:11
I had no idea all that other stuff was wrapped into this. There’s a lot of stuff.

Francyne Myers 03:17
But you got to think of it, though. Your will also will cover, like what happens to Fido, right?

Wayne Kay 03:26
Yeah.

Francyne Myers 03:27
I mean, there’s an organization here. I’m based in Nova Scotia.

There’s an organization here, and probably a lot of them across the country called Elder Dog, who take in pets when seniors have passed away and don’t have wills and nobody looks after them because it’s a very real problem. There’s pets. I don’t want to get into this. 

How do you want to be buried?

Wayne Kay 03:52
Well, that’s the big thing.

Francyne Myers 03:53
A lot of people aren’t thinking about that. Like, what do you want to happen?

It’s not really something we have in casual conversation over a cup of coffee or tea, but all these things can be in your will as a direction to your loved ones as to what you want to happen. 

Keep in mind as well, if you don’t have a will saying how you want things spelled out, it’s the government that’s going to step in and regulate a lot of times how things are done either through the Intestacy legislation, which is just when you pass away without a will. It’s what it’s called. You pass away intestate and every province has who gets what and how it’s dealt with. And it may not actually be what you want during your lifetime, but it happens.

And keep in mind as well, in most of those pieces of legislation, common law spouses and stepchildren are not part of the heirs in provincial legislation. It’s only if you’ve actually been married or you’ve adopted a child or they’re your biological child. It would be very rare. And I can’t think of any across the provinces now because the Supreme Court ruled a long time ago that if you were common law and you weren’t married, it meant that you didn’t want the other person to get your assets unless you said something in your will about it. 

So that’s why the judges ruled, the Supremes ruled that it must be why you don’t get married, because you don’t want the other person to have your assets unless you actually dictate in a will how you want your assets divided.

So you may think, oh, well, a common law spouse is a spouse. No, not equivalent. If you pass away, your spouse, your common law spouse is not going to get anything, nor is a stepchild. Your biological children will, your parents will, but that’s it. Those people will be totally cut out.

And perhaps your parents are very reasonable people, let’s say, then there shouldn’t be too much of a problem. But you may run into a problem because if you haven’t already prepared for it and already put in a will that this person is getting this, there’s a chance they may not.

Wayne Kay 06:12
Right. So even if it’s your wish that you say so and so is going to get this and I’m giving this much money to, they get everything. Even if it’s your wishes, they can contest that.

Explain that. So even if I say, okay, this is a common law and I’m saying that she gets everything, the law doesn’t see it that way. So if somebody wants to be unreasonable about it, they can say, no, we’re going to fight this.

Francyne Myers 06:40
Exactly. Well, actually, it would be the spouse that would have to fight it, not the other person.

Because you have to remember, the law is on the blood relative side, usually because this is what it says. It would be half up to a common law spouse to show why. And that could be quite a legal battle. So having a will will put all those issues to rest.

Wayne Kay 07:05
Wow, okay. Now a lot of people worry about where to get a will. Can we talk about that? Because I see these things online. I can buy one for $47 or I can go to a lawyer for, I think about $1,000 to get a will. I think for a couple it is about $1,000 to get everything set up. But that also includes Power of Attorney. So there’s more to it than just who’s getting what.

Francyne Myers 07:33
There absolutely is. And what you quoted for legal and what have you is probably about an average across the country. I would definitely agree with that. And you’re right. So when you do a will, you definitely would do up the will document.

You should also do a Power of Attorney, which you just mentioned. An enduring Power of Attorney is what they’re usually used these days. And what that means is that it gives somebody the power to deal with your assets before the executor kicks in. Because sometimes if you do have, you have set up a will, it takes a while for you to get a grant to probate for the executor to be able to deal with things. In the meantime, bills have to be paid that aren’t being paid.

So there are definitely issues. You do this Power of Attorney to give somebody that you trust the power to deal with things and then perhaps the executor would and a lot of times they are the same person. But it gives it a very seamless approach. 

The other thing is, I guess the easiest way to call, would be like a directive. This can also be dealing with things with respect to, for instance, how you want to be buried. That doesn’t necessarily have to be in a will. A will can mostly deal with your assets and who gets what and what the powers of an executor can be. 

And then you can have a separate directive being very clear on what you want to happen with your remains. So those three documents are really necessary, I think, for everyone just to deal with everything. And it really doesn’t have to be very long either.

And you said those $40 jobbies, you see them online, you see the will kits available, like at Staples or anywhere like that. I’ve looked at them. They’re actually not bad, Wayne.

Wayne Kay 09:22
Really? Okay.

Francyne Myers 09:23
They’re really not bad. If you have fairly straightforward, not a lot of investments and not trusts and not a lot of complicated issues to deal with, they’re actually not a bad way to go. Just make sure you read everything very carefully so that the form of the will is the form that will stand up in court, because if it’s not properly executed, then somebody can contest it because they say, well, this will is not valid. And that’s the last thing you want.

Wayne Kay 09:52
Right.

Francyne Myers 09:53
Going to a lawyer will give you peace of mind that your will is actually valid and stop a whole bunch of fights if that happens.

Wayne Kay 10:00
Right. And there’s going to be fights. But I remember when we had little kids and there was the big discussion, well, we got to get our will. And my wife and I could not agree on who was going to take the kids if something happened to us.

So at that point, we said, well, we’re not going to die and we’re not doing a will right now. It’s ludicrous.

Francyne Myers 10:24
Well, it is, but I understand because, well, your kids are older. My kids are in their late teens now. But that discussion of who will take care of our children if we’re not here, well, there’s nobody worthy enough, right?

Wayne Kay 10:43
Yes.

Francyne Myers 10:44
And it’s a very hard discussion to have with your spouse. The thought of you not being around for your children is a very difficult discussion to have. You know what chances are you’re not going to die. But what if you do?

It’s a good discussion to have because you have to provide for children at that point, because you have to maybe set up a trust for them. So it definitely is some kind of discussion to have because you’re going to have to sit down with a sister, a cousin, an aunt, whoever, a close family friend, and have a discussion of, look, if we go, we want you to look after our kids.

Wayne Kay 11:29
Yes, but there’s also the other side, too, of maybe the infighting of family. So here’s a question. Well, I guess this is more of a statement.

So all of a sudden, dad doesn’t get married, but he’s with somebody else. You don’t get along. For myself, I had to tell my dad, you need to make sure that it’s written and the will is out there because otherwise there will be some kind of a war.

Francyne Myers 11:57
It’s funny how people change after somebody passes away.

Wayne Kay 12:02
Yes.

Francyne Myers 12:03
And I’ve noticed this time after time after time. I don’t know what it is. It’s like mom or dad kind of kept the family together, and everything was okay. But once mom or dad is gone, then everything kind of breaks loose and Lucy wants the jewelry box, and then somebody else wants the china, and it becomes such a sore point, and you end up with siblings who aren’t even talking to each other after a while. So it has to be very clear in a will, who gets what.

If you want to avoid that kind of infighting, because I have seen it time after time after time, everybody seems to get along fine. Everybody understands that we’re going to split the property, we’re going to do this, we’re going to do that. And then invariably, even if you have a will, Wayne, invariably you’re going to get some kind of disagreement between the siblings. But at least when you have a will, you can try and mitigate some of that as much as you can by basically having what you call, a person makes the will. It’s called a testator.

It’s just a family fancy word for somebody who’s died who has a will.  Actually, it’s like the testator is speaking from the grave, because that’s what you’re basically doing in the will. Your will is now speaking for you, saying, this is what I want it to happen. So it speaks for you beyond the grave.

And it has to be clearly drafted. And again, maybe this is where a lawyer comes in, has to be very clearly drafted so there’s no ambiguity or it’s not unclear as to what somebody meant.

Wayne Kay 13:37
Right. These days, you also have through investments and pensions, and you get to designate who gets that money.

A lot of people may just have most of their money in investments, and they will say, well, I don’t need a will because who the beneficiary is, is already there. The bank already knows who gets everything.

Francyne Myers 14:06
Yes, that’s a really interesting point. So let me just run and work with me on this. Let me run through a scenario.

And I hear that a lot, right. Well, everything’s jointly owned. I don’t need a will. So let’s say husband and wife pass away in what we call a common accident. All right? So I don’t know about you, but my husband and I are in a car together a lot, and it does happen.

Wayne Kay 14:34
Yes, that’s right.

Francyne Myers 14:39
Okay, so here’s what happens in the situation where a husband and wife pass away. So number one, if you can determine the date of death, okay, then if somebody passes away, then it goes to the other person, but the other person is dead.

Wayne Kay 15:01
Yes.

Francyne Myers 15:02
If you don’t have a will, then the government decides where your assets are going to go.

Wayne Kay 15:06
Right.

Francyne Myers 15:07
Okay, here’s another kind of interesting twist. If you both, I know it’s a terribly morbid subject, but let’s say you’re both killed in an accident and somebody happens upon the wreck and you’re both dead.

Nobody knows who dies first. How would you think you’d figure out who dies first for the asset distribution? Well, the law says the oldest one is deemed or supposed to have died.

Wayne Kay 15:36
Wow, okay. I had no idea.

Francyne Myers 15:38
So, for instance, I’m older than my husband, so if this happens to us, here’s an interesting scenario. Okay, so my husband and I each have children. I have a stepchild, he has a stepchild because we both have biological children. All right? So let’s say I didn’t have a will, so we were both killed in an accident.

Nobody knows who died first. So the law says, hey, Franny, you died first, so he gets everything. Okay, but he’s dead. So now who’s cut out? My daughter.

Wayne Kay 16:11
Oh, wow.

Francyne Myers 16:12
Because she’s his stepchild.

Wayne Kay 16:14
Right.

Francyne Myers 16:15
And the law says she’s not entitled to anything, so he can’t say, oh, no, we always agreed both girls get everything, right? Then it would be up and let’s say it happened and he was deemed to pass away first because somebody actually took a pulse and I had the last breath.

Then my stepdaughter is cut out, which is a result I never wanted. So that’s what would happen. And everything is jointly owned. But if that happens, where you have a common accident, you may actually get what we call a little bit of mischief where you really didn’t expect that.

Let’s say you have no kids, which happens, same scenario. The couple passes away, whoever is deemed to die first, their family doesn’t get anything.

Wayne Kay 17:10
I had no idea. This is why we’re doing this show. But Francyne, it’s just such a great eye opener.

And yes, it’s morbid and we hate talking about it and thinking about it, but it is a fact of life and it’s going to happen and we just don’t know when, sadly. So this is amazing that you can share such great information because I think you’ve done a great job regarding wills. And it’s not just us regular people. There are celebrities with millions of dollars who pass away without a will.

Francyne Myers 17:47
And there is where you start to see the fights.

Wayne Kay 17:50
Yes, definitely.

Francyne Myers 17:52
You start to see the fighting.

Wayne Kay 17:53
Yes, right, no kidding.

Francyne Myers 17:54
And then it becomes very sad, right. Because everything’s in the public eye.

Now, you and I aren’t going to be in the public eye, but regardless, the last thing we want is to have some kind of conflict with family after we’re gone. That’s what we definitely want to avoid.

Wayne Kay 18:15
Here’s another thing. We’re talking about parents and providing for our children, and when it comes to the kids, money, RESPs, et cetera, that’s under the parents name. Can you explain how that works?

Francyne Myers 18:29
You know what I’m glad you brought up and you said an interesting phrase is the kid’s money. It’s not. It still belongs to the parents. A lot of people think because the child is the beneficiary of it, that it’s some kind of a trust.

So that if the parents pass away, it automatically passes to the child. That is not true at all. In fact, what happens is if somebody passes away or both parents pass away, if they’re joined on RESP, it just becomes part of the assets of what you would call an estate or the belongings. And if someone owes money to a creditor, you’ve actually lost that money because a creditor will take a higher ranking over that than your child. It actually does not belong to the child at all.

So you have to actually provide in your will. In a will, it says that you are a successor entitled for the RESP to be able to maintain that RESP. Apart from that, you are in danger of losing that for your child.

Wayne Kay 19:35
Had no idea. This show has just flown by. We’ve come to the end, we’ve run out of time. But please, final words of advice that you want to share with us?

Francyne Myers 19:48
Get a will. I’m just trying to think of real wisdom. I think that’s what I can pretty much come down to if you have very simple things to deal with and you don’t have the funds because a lot of people are struggling these days to go to a lawyer, at least get a wills kit, read it very carefully.

It’s not hard to do up a will. And actually in a lot of provinces, Wayne, if you handwrite your will, you don’t even need a witness as long as it’s in your own handwriting.

Wayne Kay 20:17
Wow, that’s another wonderful gem. Well, thank you so much for being on the show. This has been a terrific episode and I’m just so grateful for all the great information you shared. Francyne, you’re welcome anytime.

Francyne Myers 20:30
Thank you.

Wayne Kay 20:31
My guest today Francyne Myers. You can learn more or schedule a free consultation with Allan Marshall & Associates Licensed Insolvency Trustee through their website at wecanhelp.ca. So if you’re struggling, don’t know what to do in financial trouble and you’ve got questions, it is a free consultation –  wecanhelp.ca.

And that is it for today’s Debt Matters podcast. Make sure you subscribe wherever you get your favorite podcast from. And of course, for more information, you can always check out debtmatters.ca. Thanks for listening.