No one wants to leave behind long, bitter and expensive litigation when they die. While having a will is a good place to start, there is more you can do to decrease the likelihood that your family will take to the courtroom after you depart. This article contains a few tips to protect your estate from lawsuits.
1. Have a Valid Will
To protect your estate, the first step is to have your will drafted by someone who knows what they are doing. Using a do-it-yourself will kit is asking for trouble; the law surrounding wills and estates in British Columbia is complex and it is changing. You should be consulting professionals who are familiar with the landscape. A valid will must be in the correct form and must be properly witnessed. Once the will is signed and witnessed, do not alter it. Don’t unstaple it, don’t cross anything out or write in changes and don’t attach additional pages. It is possible to make changes to a will, but there are very specific rules to follow. You also want to make sure you don’t accidentally revoke your will or parts of your will; for example, by getting married or divorced.
2. Have a Will That is Easy to Find
The next step is to make sure people know you have a will and make sure they can find your most recent will. You can do this by storing the will in a safe, and preferably fireproof, place and registering the will with the Vital Statistics Agency in the B.C. Wills Registry. Once you pass away, your family will be able to search the Wills Registry, which will tell them the date and the location of your will.
3. Understand What Your Will Does
Make sure you know what does and does not pass under your will when you die. Do you own a piece of real estate, or does your holding company own the property? If you have designated beneficiaries named on your bank accounts with your financial institution, those accounts will likely not pass under your will either. Property and assets owned jointly, for example, houses or cars, will likely not be dealt with under your will. Joint ownership is a tricky issue that can cause unforeseen results and that is often the subject of estate litigation. Estate planning involving joint tenancies should be done with careful consideration.
4. Be of Sound Mind
A key requirement for a valid will is that you are of sound mind when you make it, so make sure there is proof that you had all your marbles when you wrote the will. Hiring a lawyer is helpful here as they are trained to take and keep careful notes regarding the mental capacity of a will-maker. Some people get letters from their family doctor, but even a doctor’s assessment may not prove you had the capacity to write a will if there is any doubt.
Whether or not you have the capacity to write a will is a legal test, not a medical test. Not all doctors are familiar with the test, and the courts don’t always put a lot of weight on a doctor’s evidence. A good rule of thumb is to do your will early; don’t wait until you are on your deathbed.
5. Have a Will That is Hard to Vary
In B.C., the Wills Variation Act allows your spouse or children to have a will varied if it does not provide adequately for them. If you avoid unequal treatment in your will, you may be able to reduce any feelings that one child was treated unfairly. If everyone is treated equally, it is harder to argue that one child deserves a bigger share than another.
Equal treatment can be a tricky exercise if you have a blended family. You should put careful thought into how you will treat step-children and new spouses in your will. You may want to consider using a trust, and it is often a good idea to consider having a marriage agreement that spells out what sort of claim your current spouse will have against your estate.
6. Leave a Paper Trail
If you are going to treat a child differently, in any way, be sure to leave behind clear evidence of why you have made that choice. This explanation should be carefully written to address the relevant legal factors that a judge would consider when making their judgment. You should also leave detailed evidence, in writing, of any loans or gifts that you have made to children during your lifetime. If you are transferring your family business to one child and not all your children, you should do it by the book; consider selling the business to them under a clear written contract.
7. Choose Your Executor Carefully
Your choice of executor is very important. You should choose an executor that has some understanding of your assets and the sophistication to wind them up. Your executor will have to deal with and account to all of your beneficiaries, so choose someone who will be able to get along with everyone. Consider appointing an impartial executor who does not stand to inherit anything. Naming one child over the others can often lead to hard feelings and accusations of unfair dealing, and naming all of your children as joint executors can often lead to disagreements and stalemates.
8. Lay it all Out
The best plan is to start early and be as transparent as you can with your last wishes. Consider sitting down with your family now and explaining your final wishes in front of everyone. Often, when people are shocked by the contents of a will, they are more likely to believe that it was written under coercion or when the will-maker was not of sound mind. Your family will hopefully be less likely to dispute something that came straight from the horse’s mouth.