Common Estate Planning Mistakes

Due to the nature of estate planning, it’s important that any errors are identified before it’s too late. By the time the plan is executed, the testator has already passed away and is unable to clarify any ambiguities. In this blog, we hope to identify some of the most common errors will-writers make and how to avoid them.

Choosing the Wrong Executor

The duties of an estate executor are by no means simple and can often be exhaustive. Will-writers should work with their executors to make sure they know what they’ll be tasked with. The last thing you want is for your executor to do a poor job, harming the interests of your beneficiaries. Further, if an executor is unaware that they were named as your executor, they may renunciate (or decline) the executorship. To avoid this, will-writers should get the approval from their executor(s) before appointing them in the will. It’s a good idea to name alternate executors in case the primary executor is not able or declines the role. For more information, read our blog on choosing the right executor.

Mistake 1: Failing to Frequently Review and Update the Will

If you prepared your will early, there will be many changes in your life which warrant revisions to your will. These include getting married, buying a car, investing in property, or having a child. Whenever there is a significant change in your life or your assets, you will want to modify your will. To make a change to your estate plan you can either write an entirely new will, or prepare a codicil. Codicils are best suited when the desired changes are simple. An entirely new will might be more appropriate when the necessary changes are more significant.

Mistake 2: Not Choosing a Legal Guardian for Children

It’s usually unlikely that both parents will pass away before their children reach the age of 19. While unlikely, it can and does happen in rare circumstances. While it is terrible to contemplate, it is important to prepare for this tragic circumstance in your estate plan, rather than compound the tragedy should it occur. If both parents pass away before their children reach the age of 19, a legal guardian will need be appointed. Parents can name a guardian in their will to ensure that they have someone who they can trust to take on this responsibility. For more information, read our blog on naming a legal guardian in your will.

Mistake 3: Not Making a Residuary Clause

Because of administration costs and taxes that arise after death, it is often impossible to know your estate’s exact value. To avoid leaving assets unnamed, will-writers often make a residuary clause in their will. This usually looks something like, “the residue of my estate is to be given to my spouse.” If there is no residuary clause, the residue of the estate falls into intestacy and is distributed according to intestacy laws.

Mistake 4: Forgetting About Digital Estate Assets

In today’s day-in-age, everyone has numerous digital assets – photo collections, social media accounts, email accounts, and many more. Just because these assets have no physical presence doesn’t mean that they should be ignored in your will. Maybe you have a specific person in mind who you know will appreciate a certain digital asset. Sometimes, login information to accounts such as email can be extremely helpful for estate executors as they work to administer your estate. For more information, read our blog on preparing digital assets in your estate.

Mistake 5: Overestimating the Size of the Estate

While it’s not common for people to outright miscount their assets and accounts, people do forget about the taxes and fees that arise after they pass away. After your passing, your estate is still responsible for paying any debts owed and taxes incurred in the time prior to your death. Further, most wills are required to go through probate where, in British Columbia, they will pay approximately 1.4% of the total estate value in probate fees. To avoid accidentally giving a loved one a minimal piece of your estate, you should familiarize yourself with the fees or debts that your estate will be expected to pay.

Mistake 6: Forgetting About Pets

While pets aren’t considered “assets” in BC law, this doesn’t mean you can’t include plans for them in your will. What will-writers can do is name a caretaker for their pets and start a trust account for the pet. This way, you have control over (a) who will keep your pet and (b) the funds available for the maintenance of the pet. For more information, read our blog on how to provide for your pet in your will.

Mistake 7: Improperly Managing Multi-jurisdictional Estate Assets

Many people have significant assets in different provinces, or even overseas. Those who do must prepare a multijurisdictional estate plan. Different provinces and countries have varying estate laws and this can mean writing a will that is valid in multiple jurisdictions is challenging. To prevent assets in multiple jurisdictions from causing problems, it is wise to create an estate plan that can accommodate out of province or out of country assets. In some cases, this might mean making multiple wills (one in each jurisdiction where there are assets). Other times, it might mean making a single will with specific provisions to properly address each area’s estate laws.

Mistake 8: Not Specifying a Survivorship Period

By default in BC, there is a 5-day survivorship period. This means that unless the will states otherwise, if a beneficiary of a will dies within 5 days after the will-writer’s death they will be considered by the law to have passed before the will-writer for estate purposes. Rather, the will-writer’s other beneficiaries will receive the remaining piece of the estate. It’s usually recommended that people extend this survivorship period to the time that they estimate it will take for the estate administration process to complete. For more information, read our blog on survivorship periods. Will-writer’s can also specify what they’d like to have happen if a specified beneficiary dies before the will is administered, for example, a will-writer could specify that the share that would have gone to their deceased child be distributed to that child’s children in equal shares.

If you need help preparing your estate plan or simply want someone to review your will, contact an experienced estate lawyer who understands BC’s estate laws. We can help to ensure that there are no mistakes in your estate plan and that your will is executed exactly as you’re intending.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.