Why Canadians need to update their Wills, executor and power of attorney
After living through the COVID-19 pandemic, many Canadians are saying they need an up-to-date Will and estate plan. But, despite this, fewer than half of Canadians have a Will, according to a recent RBC Royal Trust survey. What’s more, only one out of three Canadians have appointed a Power of Attorney for themselves.
“During the pandemic, many Canadians talked about the need to get their estate plans in order,” says Leanne Kaufman, President & CEO, RBC Royal Trust. “So we wanted to survey the general public to see if they were acting on that. What we found is that Canadians are still underprepared when it comes to estate planning, with less than half even having a Will.”
The survey, conducted by Ipsos, also asked Canadians about their reasons for writing a Will, naming an executor in their Will, or appointing a Power of Attorney. It revealed that Canadians are holding onto some persistent misconceptions – or myths – about estate planning.
The foundation of any estate plan is a valid, up-to-date Will that formally documents your final wishes and names your executor. According to the survey, 48% of all Canadians aged 18+ have a Will. That number drops sharply among younger Canadians, with only 34% of Canadians aged 35-54 and 30% of Canadians aged 18-34 having one.
When asked about their reasons for not having a Will, 21% of survey respondents said they don’t have enough assets, 21% said they were too young, and 18% said their finances weren’t complicated enough.
Among those who do have a Will, 41% said they got one because they’d reached the age where they thought it was appropriate, while 14% said they’d reached a certain asset threshold. These were the top two reasons cited by survey respondents, suggesting that many Canadians see Wills and estate planning as something that you only need if you’re older or wealthier. In fact, there are many important reasons for adults of all ages to have an up-to-date Will and estate plan.
“If you die without a Will, your family may not know your wishes and there can be family disputes,” says Kaufman. “Ultimately, your province or territory will determine how your estate is settled, and this often means your estate pays more tax and takes longer to settle.”
By having a Will, you can ensure your family knows your final wishes for everything from how your assets are distributed and what funeral arrangements you want, to who you want to be guardian of your minor children and what happens to your pets.
A Power of Attorney (or Mandatary in Quebec) is someone you appoint to be responsible for making important decisions about your finances or health care if you’re unable to make these decisions yourself, for example, due to incapacity.
Yet, according to the RBC Royal Trust survey, only 35% of Canadians have appointed a Power of Attorney for themselves. “I’m too young” (16%) or “I’m in good health” (15%) were two of the top reasons why they haven’t done so.
“While it’s true you may need a Power of Attorney when you are older and experiencing poor health, the time to appoint your Power of Attorney is before you need one,” says Kaufman. “Things can change quickly, and you can’t always predict exactly when you will need your Power of Attorney. If you don’t have one in place when the time comes, your family members may need to get that authority from the courts, which can take time, add to their stress and cost money.”
Though survey respondents cited young age and good health as two of the main reasons why they haven’t appointed a Power of Attorney, the number one reason was simply because they don’t know where to start (23%). A qualified professional estate lawyer, in addition to helping with your Will, can also help with your Power of Attorney.
One of your Power of Attorney’s responsibilities is making decisions about your finances, including your investments, should you be unable to make these decisions yourself. That’s why it’s important for us to have the name and contact information of your Power of Attorney on file. Please keep your Investment Advisor up to date about your current Power of Attorney and how they can be contacted.
When creating or updating their Will, people generally name a close family member or friend as their executor. As an executor of a Will, you’re legally responsible for dozens of tasks from locating the Will and valuing assets to filing final taxes and paying bequests to beneficiaries. For some, it can be overwhelming, especially if they have to travel, take time off work or balance their own family responsibilities, all at a time when they’re grieving.
Yet according to the survey, relatively few Canadians are aware that they can get help from a professional executor, such as a trust company (41%). A trust company is one of your options – whether you’re naming your executor or you’ve been named an executor – and can assist with some or all of an executor’s duties.
For more information about how we can help with your estate planning, please contact your Investment Advisor.
A Will is a legal document that states how you want your estate to be divided among your beneficiaries after you pass away. Your estate includes your assets, such as your property, heirlooms and investments. An up-to-date Will helps your executor settle your estate according to your wishes. If you die without a Will, your province/territory will determine how your estate is settled.
An executor is the person (or professional firm such as a trust company) who you appoint (in your Will) to settle your estate. They are legally responsible for over 100 duties including locating your Will, making funeral arrangements, identifying beneficiaries, valuing and safeguarding estate assets, making tax returns, paying bequests and more.
You can appoint someone you trust to be your Power of Attorney (or Mandatary in Quebec). They are responsible for making decisions about your finances and/or health care should you be unable to make these decisions yourself (for example, due to age-related health issues).
Your overall estate plan is more than just your Will, executor named in your Will, and Power of Attorney. It also includes planning to minimize taxes, protect assets, give to charity and prepare the next generation for their inheritances.
As any art collector knows, the allure of art lies in how it makes you feel. However, feelings aren’t easily passed between generations.
Social connections can provide huge mental and physical health benefits, particularly as we age.
A sustained equity rally, one with the potential to reach or exceed the old highs, would require a powerful catalyst from here.