Earlier this month, for Make a Will Month, we shared five common myths about Wills in Ontario. One of those myths was the idea that once you have a Will, you never need to think about it again. We wanted to spend a little more time on that one, because it comes up more often than you might expect.
Most people feel a real sense of relief once their Wills and Powers of Attorney are signed. And they should! Then the documents go into a safe and nobody looks at them again for fifteen or twenty years.
The problem is that your Will was written for your family as it looked on the day you signed it. Families do not stand still. At Fieldstone Law, we regularly meet with individuals and families throughout Burlington and the surrounding communities who are surprised to learn that a Will that made perfect sense ten years ago may not work for them today.
It is not only your life that changes
Most people know to update their Will after a marriage, a separation, or a death in the family. Those are the big ones, and they are about you.
What people often forget is that the lives of the people named in your Will change too. Children grow up. Some do wonderfully, and some struggle. The nephew you named as your Estate Trustee at 30 might be living in British Columbia at 50. The daughter who was finishing university when you signed might now be dealing with a serious illness.
None of this is anyone's fault. It is just life. But it can mean that the provisions you set out years ago no longer do what you intended.
What if a beneficiary's situation has changed?
Many Wills say something simple, like "divide everything equally among my children." When everyone is doing well, that is often exactly right. But what if one of those children is in a very different place now?
Addiction: Clients sometimes tell us, quietly, that one of their children is struggling with drugs, alcohol or gambling. A large lump sum may not help that child at all, and in the worst cases it can make things much worse. A trust that pays out over time, or pays for specific things like rent or treatment, can protect them from the inheritance itself.
Not good with money: This one is more common, and it does not have to be dramatic. Some people are just not careful with money. Maybe there is a history of debt, a spouse you worry about, or a business that always needs "one more loan." You can still leave that child their share. You may just want someone steady holding the purse strings for a while.
Estrangement: Sometimes relationships break down. A child stops calling, or there was a falling out that never got resolved. You may still want to leave them something, or you may not. Either way, the decision should be yours and it should be clear. A Will written when everyone was close can leave a lot of hurt, and sometimes a court challenge, if it does not reflect how things really ended up.
Social assistance: If a beneficiary now relies on government support, an outright gift can actually take that support away. This is the one we worry about most, and we will come back to it below.
Is your Estate Trustee still the right person?
Your Estate Trustee (also known as Executor) is the person who will handle everything after you are gone. They deal with the bank, the house, the taxes and your family. It is a big job, and it can easily take a year or more.
When you first chose that person, they were probably the obvious choice. It is worth asking yourself a few honest questions today:
Do they still live nearby, or have they moved away from Burlington or out of the province?
Are they still healthy enough to take this on?
Are they going through their own separation, financial troubles or addiction?
Do they still get along with your beneficiaries, or would putting them in charge start a fight?
Would they even want the job anymore?
If any of those questions gives you pause, it is time to take another look. We also see a lot of older Wills that do not name an alternate Estate Trustee at all.
Why does ODSP need special attention?
This is the part we really want families in Burlington and across Halton Region to hear.
The Ontario Disability Support Program (ODSP) has strict limits on what a person can own. A single person on ODSP can generally have no more than $40,000 in assets. Gifts and voluntary payments over $10,000 in a 12-month period can also be counted against them.
Now picture this. Your son has been on ODSP for several years. Your Will, signed before he was diagnosed, leaves him one third of your estate. That might be $150,000. The moment that money lands in his account, he is over the limit. His ODSP benefits can be suspended, and if he cannot get back under the limit in time, his file can be closed altogether. That can mean starting the application process all over again, which can take months, and he may be left without income support in the meantime.
ODSP is not only a monthly cheque either. It also provides drug, dental and vision coverage, which can be very difficult to replace.
The good news? This is almost always avoidable with proper planning.
What tools can protect a loved one on ODSP?
There are a few options we commonly use when a beneficiary is receiving, or may one day receive, ODSP:
Henson Trust: A fully discretionary trust set up in your Will. Your loved one does not own the money. Instead, the trustee decides when and how it is used, so it is not counted as their asset, no matter how large the trust is.
Qualifying trust under $100,000: ODSP does not count up to $100,000 of an inheritance held in a trust that meets its rules.
Registered Disability Savings Plan (RDSP): Money held in an RDSP is not counted as an asset, and it can work well alongside a trust.
The right choice depends on the amounts involved, who you trust to manage the money, and what your loved one actually needs day to day. What matters most is that a Will signed before someone went on ODSP, or before you knew they might, could be working against them right now.
Please keep in mind that ODSP rules and limits do change, so it is always best to get advice for your specific situation.
How often should you review your Will?
As a general rule, we suggest pulling out your Will every three to five years and reading it with fresh eyes. You should also review it any time something significant happens, to you or to someone named in it, including:
A beneficiary struggling with addiction or money management
A beneficiary applying for, or receiving, ODSP or other social assistance
An estrangement or falling out in the family
Your Estate Trustee moving away, becoming ill or no longer being a good fit
Marriage, separation, the birth of a child or grandchild, or a death in the family
Buying or selling property, or a significant change in your finances
A review does not always mean a brand new Will. Sometimes we read it over together and it still works perfectly. Sometimes it needs a small change. Either way, you walk away knowing your plan still does what you want it to do.
Make a Will Month is the perfect time for a check-up
Your Will is meant to protect the people you love. If their lives have changed since you signed it, your Will may need to change too. If it has been a few years since you last looked at yours, November is a great time to take it out of the drawer.
Contact Us
If you have questions about updating your Will, Powers of Attorney, Estate Planning, or planning for a loved one who receives ODSP, our team at Fieldstone Law is here to help. We work with individuals and families throughout Burlington, Oakville, Hamilton and the surrounding communities. Contact our office today to book a review of your estate plan.