Life comes with many planned and unplanned changes. Therefore, it is important to revisit your estate plan regularly to ensure that it accounts for these changes.
The frequency at which an estate plan should be reconsidered depends on your unique circumstances. This blog post will provide information on circumstances where an estate planning update might be necessary, and how to do so.
Elements of Estate Planning in Canada
Estate planning lets you determine how your assets will be handled when you die. In some cases, estate planning also involves considering different strategies and creating additional documents beyond a simple will.
A comprehensive estate plan may also include some, or all, of the following documents:
- Power of Attorney which allows an individual to appoint another individual to handle decisions relating to finances, property, and personal care if the individual loses the capacity to make such decisions.
- Substitute Decision-Maker Cards which enable an individual to appoint a substitute decision-maker to make healthcare decisions on their behalf if they are incapable of doing so themself.
- Retirement Plans and Insurance Contracts which allow an individual to designate a beneficiary to receive the proceeds of certain funds after their passing.
- Inter Vivos Trusts which allows an individual to gift an asset, or allow someone else to handle an asset, during the individual’s lifetime.
When Should I Review My Will and Estate Plan?
At a minimum, it is a best practice to review a wills and other estate planning documents annually to ensure the terms continue to reflect your wishes accurately.
Due to the frequency at which the law changes, reviewing your estate plan regularly ensures that your estate planning strategy remains relevant and takes into account changes in the law. For example, annual amendments to the Income Tax Act can create new strategies to consider within your estate plan.
However, the anticipation or occurrence of a significant life event should also trigger a review of your estate plan. Examples of life events where reviewing your will and estate plan are essential may include, but are not limited to:
Childbirth or Adoption
If you are a new parent, revisiting your will to ensure there is a plan in place for your child’s care is essential if something happens to you.
While many wills can consider the inclusion of unnamed grandchildren by default, it is prudent to review your estate plan during these milestones.
Changes in your financial circumstances
Circumstances such as inheriting a large sum of money, or getting a significant promotion, may require a change to your estate planning strategy.
Changes in personal circumstances
Both positive and negative changes in personal circumstances should trigger a review of your estate plan. For example, if your child is getting married, you may want to consider whether changes to your will are necessary. Sadly, family dynamics can also turn sour, leading will-makers to rethink their estate planning strategy.
Changes of heart
Over time, feelings can change. You may have previously decided to leave assets to one beneficiary, but later determine that you would prefer to distribute them differently.
Changes to executors or beneficiaries
If an executor or beneficiary moves, develops a critical illness, goes through a separation or divorce, or passes away, you may need to consider how this will impact the instructions in your will.
Getting divorced or separating
When you divorce in Ontario, the provisions in your will referring to your ex-spouse are revoked. However, it is imperative to revisit your will to ensure that the assets intended for your ex-spouse are distributed following your wishes.
Getting married or entering a common-law relationship
While getting married or entering a common-law relationship does not negate an existing will, reviewing your will to ensure it still reflects your wishes and provides for your spouse or common-law partner is important.
Gifts of property or assets that are named in your will or other estate planning documents
If, for example, you gift property to your children that is specifically mentioned in your will while you are still alive, you should remove references to that property to avoid future confusion or disagreements.
If you become ill, review your estate planning documents to ensure they meet your needs and include the proper documentation. For example, powers of attorney allow you to appoint individuals to handle decisions if you lose the capacity to do so and substitute decision-maker cards allow substitute decision-makers to make healthcare decisions if you are incapable of doing so yourself.
How Often Can a Will Be Updated?
Ultimately, a will may be amended as often as the will-maker wishes before their death. The caveat is that any time a will is changed, the will-maker must have testamentary capacity – meaning that they understand that the will is being updated and that they understand the changes being made along with their potential consequences.
However, incapacity can arise quickly and without warning. Therefore, it is important to ensure that estate plan revisions and amendments are made proactively.
How Do I Update My Will?
Generally, there are two methods under which a will can be amended in Ontario. A will-maker can amend their existing will by way of a codicil, or they may entirely revoke an existing will and draft a new one. Each of these methods have different requirements which must be satisfied.
When amending a will, an experienced estate planning lawyer will draft a codicil. This document incorporates minor amendments to the will and is then attached to the existing will.
If a will is revoked and a new one is drafted, an estate planning lawyer will draft a revocation document confirming the revocation and will subsequently draft a new will.
Codicils are appropriate for minor changes to the existing will as they are typically less time-intensive and can be cheaper than creating a new will. However, revoking an existing will is best used in cases where a will-maker intends to overhaul their entire existing estate plan.
Contact the Trusted Wills & Estates Lawyers at Campbells LLP in Oakville for Estate Planning
Planning for the future is not often at the top of everyone’s mind. However, effectively managing your wealth and protecting your estate is something that everyone should do to ensure that their express wishes are carried out.
The best way to guarantee that your wishes will be carried out exactly as you would like them to is to consult with an experienced estate lawyer. At Campbells LLP in Oakville, our wills lawyers have been helping clients with wills and estates matters since 1999. Contact us online or at (905) 828-2247 to learn how we can assist you plan for your future.