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It's Your Money  

Five times when you should update your will

Dealing with life changes

Over the years, we’ll be faced with many major life changes and while it’s easy to get wrapped up in diapers and weddings, we can’t forget the administrative changes that need to come along with life’s ups and downs.

One thing that many people forget to do after a life change is to update their will. Most people write it, file it and then forget about it. However, wills need periodic updating, especially when a change comes along.

When should you revisit your will?

Here are five times where taking another look at this critical document is a must:

1. A new baby. A newborn needs lots of attention early on, but the child will need even more care if something happens to you and your spouse. It’s in your will where you’ll indicate who will look after your child if you can’t. Designating a guardian is crucial so that someone is prepared to take physical custody of your children and their assets. Ensure the new child gets a fair inheritance, especially if you already have other children who are already named in the will.

2. Getting married, again. Getting hitched later in life, when one or both of you already has kids, should trigger a will update, too. But be prepared – it’s going to be a complicated revision. You’ll likely need to make sure that your child’s inheritance is not entirely up to the discretion of the step-parent. The will needs to carefully state which children get what, and what happens if a surviving spouse remarries. It’s important to ensure that children from a previous relationship aren’t disinherited when you have a new spouse.

3. Caring for people with disabilities. Having a special needs beneficiary in the family—such as a child born with health issues or a family member who develops them later in life—could necessitate a will change too. You’ll need to think ahead to that person’s needs over the long term and you should have a customized will that structures your estate in a way that maximizes their access to various social and medical programs.

4. Common law situations. If you’re living common law, you should definitely be drawing up a will as surviving common-law spouses don’t have the same rights of inheritance as a married person in many Canadian jurisdictions. It’s important to know the rules in your province and to structure your will and estate plan in a way that best reflects your intentions with respect to your partner.

5. A separation or divorce. A split will also necessitate a will change. Pay special attention to beneficiary designations on your pensions, RRSPs, RRIFs, TFSAs, insurance and group benefits. You may not want those dollars going to your ex.

Reviewing a will is easier said than done. It’s hard to think about mortality and what might happen after you’re gone. But creating a will, and updating it, is a must. Everyone wants those you love and who need care to be protected well into the future.

And while you’re at it, reach out to your financial planning professional to see if the above life changing events require any changes to your financial plan as well.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.



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About the Author

Brett Millard is vice-president and a member of the executive leadership team at FP Canada, the national professional body for the financial planning industry. A not-for-profit organization, FP Canada works in the public interest to foster better financial health for all Canadians by leading the advancement of professional financial planning in Canada. 

He has worked in the financial advice industry for more than 15 years and is designated as a chartered investment manager (CIM) and is a certified financial planner (CFP).

He has written a weekly financial planning column since 2012 and provides his readers with easy to understand explanations of the complex financial challenges they face in every stage of life. Enhancing the financial literacy of Canadian consumers is a top priority for Brett and his ongoing efforts as a finance writer focus on that initiative. 

Please let Brett know if you have any topics you’d like him to cover in future columns ,or if you’d like a referral to a qualified CFP professional in your area, by emailing him at [email protected].

 



The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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