# Writing a Will - Under 25



## 30seconds (Jan 11, 2014)

I have been thinking of putting a will together and would like advice. My friend sells life insurance so I have been learning more and more about the tax's/lawyer fees that could take a lot of ones savings if they are not properly prepared for a worse case scenario. 

So for my situation: single, living in ontario, no kids, renting, under 25, 75K+ savings and only tangible assets = less then 10k (paid off car, computer, etc.)

I did some reading and found there are a ways I could go about it and would like to know what would be the best.

- Holographic will: Write it by hand, date it and sign it. 

-Formal written: Typed out by myself or a lawyer. Must have 2 witnesses who cant be beneficiaries.

All I want it to say is who gets what (70% to my parents 30% between my 2 siblings for example) 
Should I see a lawyer, use a Will Kit online or just write it out my self?

On a side note, back to my insurance selling friend.. for some one my age is there any point? If I die all funeral expenses would be covered and I have no out standing debts. I see no need but he talks about it as a tax shelter.. which I don't fully understand or can wrap my head around so I steer away from it.


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## 1980z28 (Mar 4, 2010)

I started my will at 40

Update every 2 years until 50

Now update every year

After 60 I will redeploy % as life for my family will be on a straight line

Will live until 100 for sure


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## Eclectic12 (Oct 20, 2010)

30seconds said:


> ... On a side note, back to my insurance selling friend.. for some one my age is there any point?
> If I die all funeral expenses would be covered and I have no out standing debts. I see no need but he talks about it as a tax shelter.. which I don't fully understand or can wrap my head around so I steer away from it.


Do you care about the split you have identified (i.e. 70% to parents, 30% split between siblings)?

If there's no will, the provincial legislation takes over. 
Based on this link ... I believe it would mean that 100% would go to your parents and none to the siblings - assuming parents & siblings are living at the date of death.
http://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/heirclaim.asp

(I noticed that only blood relatives can inherit.)


Then too, the court appoints an administrator, who may or may not move quickly on dealing with your estate (I believe this generates more money for the gov't).


I'm not seeing the tax shelter part ... unless it's a slow moving admin who is taking their time.

Cheers


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## AltaRed (Jun 8, 2009)

First thing. Stay away from insurance salesmen. It is even creepier when a so-called friend tries to sell you insurance. They get enormous commissions from anything they sell. 

As a single person, you do not need any kind of life insurance, nor anything packaged as life insurance plus investment funds. The hidden fees are large and most of the underlying funds do not perform as well as a low cost investment portfolio. You will do a lot better over your 40-60 year investing career keeping investments entirely separate from insurance needs.

The only important insurance you need while single and needing earning power is disability insurance that will pay out if you become injured and cannot fully support yourself.


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## NorthernRaven (Aug 4, 2010)

If the OP was okay with the parents getting 100%, that would happen without a will. I think they could apply to be named executors of the estate, rather than a court-appointed administrator. But there would extra paperwork and probably expense, and at 70-30 split would be up to the parents to distribute, etc. I think this simple a will can be done for $100 in Ontario - there's a company saying $99 that is establishing offices in Walmarts, and I remember seeing some sort of annual will-awareness charity thing where lawyers did simple wills at this price (and donated the fee to charity).

For true market-realism types, the OP could argue to his family that since they would receive a chunk of cash by accepting his estate at his untimely demise, it is in their interest to pay some or all of the cost of writing a will, as it would reduce their cost and aggravation should he die intestate... 

I think the OP meant that the insurance-salesman friend is suggesting some sort of tax-shelter effect from the insurance while they are still alive. Not sure what exactly that might be, but I'd suggest asking the friend how much commission they make in selling the policy...  If the "insurance" part of life insurance (large payout in event of sudden unexpected death) isn't actually needed, there is almost certainly some sort of investment that will bring a better return on those dollars.


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## Mortgage u/w (Feb 6, 2014)

For me, a Will should be drawn up legally. But, do you really need a Will?

I think your insurance friend is just reading a script. Given your age and life situation, there is no major need for life insurance or a will, IMO. If you really want either one, it would be a personal choice, but for tax shelter? fees? Not sure I follow you're friend's advice either.

I think these two items are important when you are married and have children. They should definitely come up in your wealth management and while talking to a financial planner - but not something I would discuss with an insurance salesman.


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## NorthernRaven (Aug 4, 2010)

By the way, the Canada Pension Plan has a death benefit. It is capped at $2500, but the formula is 6 times the monthly payment your contributions to date would entitle you to if you were retiring now at 65. So even if someone has only been working a short while, there may be a few hundred dollars from CPP - I think 3 years around the max (~$50K in salary/eligible earnings) would come out around $500.


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## AltaRed (Jun 8, 2009)

If the OP feels better about a simple will, then I agree it is worthwhile to do one just to ensure the estate whatever size it is, goes to who the OP wants it to go. It also avoids court and estate administration fees that would occur with court appointed administrators. Best to keep high priced professionals out of it. 

As long as the OP is single and does not have complicated assets such as business interests, a store bought version will work just fine. It may vary slightly from province to province so the OP should get a version designed for the province in which the OP lives.


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## 1980z28 (Mar 4, 2010)

Simple will to start maybe 250.00 at you local Lawyers office,can be updated at will


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## GreatLaker (Mar 23, 2014)

If an insurance policy has a named beneficiary the payout can bypass the probate process, getting money to your beneficiaries faster. If your beneficiaries may be in financial need without you and require the money quickly that could be a reason to buy a life insurance policy. But that does not sound like the case for you.

I have an insurance agent friend who also tried selling me life insurance, critical illness insurance and disability insurance, but my fee-only financial planner (who by the way does not get a commission from selling me insurance policies) evaluated my finances and suggested that such policies are not necessary for me. I never combine insurance and investing, as I see it as expensive insurance and expensive low quality investments. And I also don't like to get financial, legal or insurance services from my friends - too much possibility of loss of friendship, conflict of interest or bad feelings.

As far as a will, I had mine done by a lawyer and it gives me a sense of confidence that it is correctly done and will be unambiguous from a legal perspective. If you use a will kit or a holographic will do a lot of research to ensure it is done properly. My will and 2 POAs cost less than .05% of my net worth... well worth it IMO.

Did Walmart launch their low cost legal services in Canada? I don't see it on their website.
http://www.thestar.com/business/personal_finance/2014/04/21/walmart_shoppers_can_now_get_99_wills.html


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## Ag Driver (Dec 13, 2012)

Anything to do with the law -- get legal advice. I learned this when dealing with real estate. Never trust anyone for legal advice unless they are a lawyer. 

Personally, when I get around to having a lawyer draft up my will, my one sibling will get 100%. My parents don't need the money, and when my grand parents croke, they will be receiving an inheritance. My other sibling doesn't need the money either, but when my parents croke, both of us will receive THAT inheritance -- so really, sending it all to my sibling this is effectively cutting out the "middle man". 

The only thing I wonder or worry about are any investments that are passed on. I would like to see some sort of a claus that states my sibling must seek advice from a fee only Financial Adviser for how to proceed with my investments. Cashing them in might not be the greatest idea at the time.


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## NorthernRaven (Aug 4, 2010)

GreatLaker said:


> Did Walmart launch their low cost legal services in Canada? I don't see it on their website.
> http://www.thestar.com/business/personal_finance/2014/04/21/walmart_shoppers_can_now_get_99_wills.html


Axess Law is the firm mentioned in that story. They have offices in 4 GTA Walmart locations. It is the Ontario Lung Association that does the charitable Will Campaign. $100 for a simple (1 hour of lawyer time) will; contact the Lung folks to find a participating lawyer.


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## Eclectic12 (Oct 20, 2010)

Mortgage u/w said:


> For me, a Will should be drawn up legally.
> But, do you really need a Will? ...


As I say ... for someone in the OP's position - the main benefit is having the split one desires done, instead of having the provincial law split it, where it may depend on family good will to end up with the desired split. I've seen families and extended families do bizarre things when money or property is at stake.

Then too, I don't know too many kids who discuss how they want their estate split with their parents, so even if the parents want to pass on the money it may not end up being the split intended.




GreatLaker said:


> If an insurance policy has a named beneficiary the payout can bypass the probate process, getting money to your beneficiaries faster. If your beneficiaries may be in financial need without you and require the money quickly that could be a reason to buy a life insurance policy. But that does not sound like the case for you...


As I understand it, insurance proceeds are not taxable when paid to a beneficiary instead of an estate. 
So over and above making money available more quickly, some use it to end up with a lower tax bill with more useable money being passed on.

I'm not for or against it ... I'm pointing out that there are benefits than simply the speed of the cash being available for use.




Ag Driver said:


> ... Personally, when I get around to having a lawyer draft up my will, my one sibling will get 100%.


So in the meantime you are happy with the province/territory setting who will get the money with potentially no mention of your sibling, right?




Ag Driver said:


> ...The only thing I wonder or worry about are any investments that are passed on. I would like to see some sort of a claus that states my sibling must seek advice from a fee only Financial Adviser for how to proceed with my investments. Cashing them in might not be the greatest idea at the time.


There may be no choice ... at death, unless there is a provision for a tax free rollover to the beneficiary - I understand the investments are deemed to be sold at death, triggering capital gains (CG) taxes (same as owing a cottage that has increased in value).

http://estatelawcanada.blogspot.ca/2010/03/does-canada-have-death-taxes-or.html


Unless there's been something done over the years to reduce the CG (ex. sell shares and rebuy to increase the cost) or there is cash from some source to cover the taxes - selling the investments regardless of how good or bad the timing is ... may be the only recourse.


Cheers


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## Ag Driver (Dec 13, 2012)

Eclectic12 said:


> So in the meantime you are happy with the province/territory setting who will get the money with potentially no mention of your sibling, right?


Yes. My sibling is currently in the middle of a drawn out common law separation. In case you were wondering. I'm not being hypocritical, thank you very much. To put it plainly, I personally don't think there is a need for a will until you have a more complicated scenario. (ie Assets, family issues, etc). I only considered getting a will once I bought my house. At the time of purchase, my sibling was in a shaky relationship status. As this comes to a close, and my sibling is established in a new home, I will have a will drafted up. 

Wills are very personal. Do as you please. I only recommend that if/when you wish to proceed with a legal will, I suggest getting legal advice form a lawyer.


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## 30seconds (Jan 11, 2014)

Thanks for the responses! 



> "Do you care about the split you have identified (i.e. 70% to parents, 30% split between siblings)?"


 - Not really. If it goes 100% to my parents thats fine. I have talked about how I would want it to be split among the family to them. They are also financially smart so my investments I wouldn't be to worried about being sold at the wrong time. I guess timing would be something I would want a bit of control of.. give my siblings half immediately after then the rest three years after



> "The court appoints an administrator, who may or may not move quickly on dealing with your estate"


 - Would having a will make this process faster? I guess thats kind of what I am trying to avoid is crazy lawyer fees/some one (gf/friend/cousin) interfering with the process. If I don't have a will and 100% of it goes to my parents, are these possibilities.. or does it automatically default to them?



> "If an insurance policy has a named beneficiary the payout can bypass the probate process, getting money to your beneficiaries faster. If your beneficiaries may be in financial need without you and require the money quickly that could be a reason to buy a life insurance policy. But that does not sound like the case for you."





> As I understand it, insurance proceeds are not taxable when paid to a beneficiary instead of an estate. So over and above making money available more quickly, some use it to end up with a lower tax bill with more useable money being passed on.


- This is what he is talking about. I just could never get out why it would make sense for a person in my situation to do this...lower lawyer fees? Once I have dependents then it makes sense to me.




> There may be no choice ... at death, unless there is a provision for a tax free rollover to the beneficiary - I understand the investments are deemed to be sold at death, triggering capital gains (CG) taxes (same as owing a cottage that has increased in value).


 That is interesting! I assumed the account would just get moved to the beneficiary.


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## Eclectic12 (Oct 20, 2010)

Ag Driver said:


> Yes...


... fair enough.




Ag Driver said:


> ... My sibling is currently in the middle of a drawn out common law separation. In case you were wondering.
> I'm not being hypocritical, thank you very much ...


I wasn't wondering but the info does make the preferences clear.
I'm not following why someone having a preference one way or the other is being hypocritical.




Ag Driver said:


> ... To put it plainly, I personally don't think there is a need for a will until you have a more complicated scenario. (ie Assets, family issues, etc).
> ...


That's where having seen family issues and not always having time to track if there are any changes to the legislation - I'm happier to have it defined.
But that's me.


Cheers


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## Eclectic12 (Oct 20, 2010)

30seconds said:


> ... If it goes 100% to my parents thats fine. I have talked about how I would want it to be split among the family to them.


You are ahead of most then as I don't have any friends whose parents are aware of what they'd want. It makes the "no will" option more likely to end up with the result you are looking for.




30seconds said:


> ... - Would having a will make this process faster?
> I guess thats kind of what I am trying to avoid is crazy lawyer fees/some one (gf/friend/cousin) interfering with the process...


As part of a will, you can identify who (there can be multiple) the executor will be. It does not guarantee things will be efficient but hopefully out of respect, the executor(s) will work as fast as they can. If it's court appointed - there's less personal connection and potentially incentive to be efficient.




30seconds said:


> ... If I don't have a will and 100% of it goes to my parents, are these possibilities.. or does it automatically default to them?


As I read the link, it sounds like they'd tick off what it isn't there (ex. no spouse, no kids) and when it hits the part about:


> If there is no spouse or children or grandchildren, the deceased person's parents inherit the estate equally.


Then that's what will happen ... the next line about siblings starts with:


> If there are no surviving parents, the deceased person's brothers and sisters inherit ...


which to me, says as long as one or more of the parents are alive - 100% will go to them.

The estates I know details of all had wills so I can't be sure there won't be a mix ... maybe someone with experience can comment.



30seconds said:


> ... - This is what he is talking about. I just could never get out why it would make sense for a person in my situation to do this...lower lawyer fees?


The lawyers fees will be the lawyers fees ... having an insurance policy won't change the fees. It will potentially avoid taxes while providing a means to pay the fees.

The question is whether in your situation - there's a need for cash quickly and/or if you want to pass on cash tax free. It doesn't sound like either are an issue so the only other concern I can think of is that if you end up getting married at say 50 - the insurance policy choices will have change (just as hopefully you will have more assets). 




30seconds said:


> ... That is interesting!
> I assumed the account would just get moved to the beneficiary.


Death is the ultimate windfall for the gov't ... RRSP/RRIFs are collapsed, tax deferred investments become taxable to the estate etc., which means a top income in a short time.
(For a complicated estate, one can spread the tax returns over two years, doubling the minimum allowances/credits/charitable donations.)

That's why estate planning is big business (and the mention of the insurance policy payout being tax free) to make sure as much as many tax reduction options as possible as well as plans are in place to redirect what would go to the gov't goes to heirs or charities.

http://business.financialpost.com/2...res-what-happens-to-your-assets-when-you-die/
http://retirehappy.ca/what-happens-your-rrsps-when-die/
http://www.getsmarteraboutmoney.ca/...s-to-your-RRIF-when-you-die.aspx#.VMfrqi4gpyE
http://canadianaccountanttips.blogspot.ca/2010/11/what-will-happen-to-your-tfsa-when-you.html


Cheers


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## OhGreatGuru (May 24, 2009)

If you have over 75K in assets your should probably have a will. Otherwise your relatives will have to apply for a court-appointed executor to settle your estate, for which the executor will be entitled to charge a prescribed fee. Depending on the province you are in, filing for this appointment may require significant legal fees. Financial institutions will not release that kind of money to people claiming to be "next of kin" without a court-appointed executor or trustee.

If you die intestate (without a will) your estate will be divided amongst surviving relatives in accordance with formulas prescribed by estate law in your province. This division may not agree with your intentions.

Part of the process of writing a will is to consider a number of "What if" scenarios. What if my sibling dies before me? What if one or more of my parents die before me? What if I have a child before the will is revised? Who is able and willing to be my executor? I recommend going through this process, at least the first time, with the advice of a professional such as a lawyer.

There are ways of having assets pass to beneficiaries outside of your estate, keeping them out of probate entirely. You will find some of them discussed on other threads. But these have to be exercised with caution to avoid legal and tax complications.

PS: I suggest you look up the duties of an executor sometime. If no one is appointed your family will be waiting forever to get your estate settled.


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## NorthernRaven (Aug 4, 2010)

OhGreatGuru said:


> If you have over 75K in assets your should probably have a will. Otherwise your relatives will have to apply for a court-appointed executor to settle your estate, for which they will be entitled to charge a prescribed fee. Depending on the province you are in, filing for this may require significant legal fees. Financial institutions will not release that kind of money to people claiming to be "next of kin" without a court appointment.


I'm neither a lawyer nor an Ontario resident. But if you look at the page I linked to earlier, it would appear that, should the OP die intestate in Ontario, the parents (for instance) could apply to be named Estate Trustee, by filing an "Application for a Certificate of Appointment of Estate Trustee without a Will (Form 74.14 or 74.15)". The parents would be sole beneficiaries of the estate of an unmarried, childless intestate, and first in priority to apply for the trusteeship. Presumably once this application is approved, they would be in effectively in the same position as if they had been named executor in a will. Even with a will, a similar application would need to be filed with a will; for the fairly straightforward case like this there might be a little extra work involved, but presumably not a lot.


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## OhGreatGuru (May 24, 2009)

Ag Driver said:


> ... I would like to see some sort of a clause that states my sibling must seek advice from a fee only Financial Adviser for how to proceed with my investments. ....


If your sibling is an adult, you may have to put the funds in a trust in order to bind him/her in this way. All the more reason to get legal advice.


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## coptzr (Jan 18, 2013)

Get a Will. Once it is done, you can just update when need be and you won't look back in 10 years thinking it was a waste. Do it right, with a well known credible lawyer. 

As far a life insurance, it fine to think you will have the same amount of money in cash down the road but there are some thing you just can't prepare for. When you look back and see your premium is 5x higher because you delayed it until you felt you should have it, you will kick yourself.


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