Common Misconceptions about Wills & Estates in Alberta
Young adults should have a Will to ensure their assets, no matter how large or small their estate, are given to the people of their choosing if they were to pass away. Contact Safi Law Group today and ask to speak to a Wills lawyer who can guide you through the easy process of creating a Will.
Many people fail to get a Will done for the wrong reasons such as “I do not have many assets”. However, surprisingly, many people also get a Will done for the wrong reasons such as “If I do not have a Will, the government will take all of my assets”. Unfortunately, there is a lot of misinformation about this very important area of the law. In this blog entry, we cover some of the biggest misconceptions people have regarding Wills & Estates in Alberta.
Please note that this blog entry is only for informational purposes and is not meant to be legal advice for your specific case. If you require legal advice, please contact our office, and book a consultation to discuss your matter.
“I do not need a Will because I do not have many assets”
The flaw in this statement is perhaps best demonstrated with an example.
Imagine an individual named Bob. Bob is 25 years old and does not have a spouse or any children. Bob’s parents passed away when he was very young. His only close relatives are his brother, John and his uncle, Tom.
After graduation from university, Bob has been able to save $10,000, which is kept in a savings account. Other than this savings account, Bob does not have any other significant assets.
In the unlikely event of his death, Bob would like the $10,000 to go to his uncle, Tom, who helped Bob get through university. He certainly does not want the money to go to his brother, John, whom he never got along with. Also, John has a bad gambling problem and will likely gamble the savings away. However, because Bob is young and does not have many assets, he does not see a reason to get a Will done.
One fine day in summer 2020, Bob attends a party (contrary to advice from experts) and attracts coronavirus. The complications from the virus lead to Bob’s untimely demise.
Because Bob did not have a Will, the entirety of his estate passes to his brother, John in accordance with government legislated intestacy rules. Bob’s uncle, Tom receives absolutely nothing.
Despite the fact that Bob only had one asset, he nonetheless had a very specific wish as to who should receive that asset after his death. However, because Bob did not have a Will, his specific wish had no legal effect.
The result above demonstrates that the number of assets or the value of an estate has no bearing on whether someone should have a Will or not. If an individual has specific wishes on how their estate should be distributed, they need a Will. Otherwise, unintended consequences may follow (even for a relatively small $10,000 estate).
“If I do not have a Will, the government will take all of my assets”
If an individual dies without a Will, the government legislated intestacy rules determine how their estate would be distributed. However, this does not mean that the government will take all of their assets.
As long as an individual has “heirs”, the estate will be distributed to those heirs in accordance with the intestacy rules. However, only in the rarest cases where an individual has no heirs at all would the estate be transferred to the government. This would be a case where a person does not have a spouse, children, grandchildren, parents, siblings, grandparents, uncles/aunts, cousins etc. In plain English, basically a lot of people will have to die before the government is entitled to an individual’s estate!
“If I have a Will, my executor does not need to go through the Court to distribute my assets”
A Will allows you to nominate a personal representative (formerly called an executor) as well a specify how your estate should be divided. However, before your personal representative can use your Will in any significant way (such as to sell your home and divide the proceeds or to access a bank account with a significant balance), they will be required to get something called “probate” from a Court.
Probate is legalese derived from Latin and means “to prove”. When an individual dies leaving a valid Will, their personal representative will need to “prove” the Will before they can take significant actions pursuant to the Will. The proving is done by making an application to Court and submitting the Will. Our website has some helpful information on the Probate process for you to review.
Without probate from the Court, organizations such as a bank or Land Titles Office will likely not accept your Will and may not even want to talk to your nominated personal representative. Essentially, those organizations need assurances from the Court before they are willing to allow someone else to sell your land or withdraw $100,000 from your account.
“If I have a Will, then all of my assets will be distributed in accordance with my wishes as outlined in the Will”
It is important to note that both a Will and the government legislated intestacy rules only distribute the assets that are part of an individual’s estate. However, there may be many significant assets that may never become a part of an individual’s estate. Those assets will not get distributed in accordance with the individual’s Will.
Two broad categories of those types of assets are:
- Assets held in joint tenancies (such as land)
- Assets with designated beneficiaries (such as a life insurance policy)
For assets held in joint tenancies, the surviving joint owner inherits the asset upon the death of the individual. The asset does not go to that individual’s estate and therefore does not get distributed in accordance with their Will.
For assets with designated beneficiaries, the beneficiary inherits the asset upon the death of the individual. The asset does not go to that individual’s estate and therefore does not get distributed in accordance with their Will.
However, like many things in law, there are many exceptions to these two broad categories. As a result, it is best to obtain legal advice when dealing with assets involving joint tenancies and designated beneficiaries.
Learn More About Wills & Estates
Surprisingly, there many other misconceptions about this very important area of the law. If you have any questions about a Wills & Estates matter, our office may be able to help.
Reach out to us for a consultation using our Contact Us page or call (780) 760-7234. We’re waiting to answer all of your questions and help you secure the future of your estate.