Do I NEED A Will?

I am often asked by friends, neighbours and fellow small business owners the above question – Do I NEED A Will (emphasis on NEED)?

We kind of know that part of “adulting” is getting a will and other estate planning documents drafted at some point.  But where should this rank in the list of priorities of a busy business owner’s legal needs?

Legal Risk Assessment

Assessing any risk is made up of two parts: (1) considering the probability of something going wrong and (2) the impact of the negative consequences if it does.

A will is a legal document that names our legal representative and deals with our assets and liabilities on our death.

In the case of our own death, we are 100% sure this event is going to occur (probability), but in most cases, do not know when.  You will be dead (and therefore may not care), but the negative consequences set out below will be felt by surviving family members and in the case of a business, potentially employees and other partners.

Dying Without A Will

Dying without a will can create a big mess (i.e. negative consequences) for remaining family members.

The size of the mess may be increased by the presence of business assets, children, real estate, a second marriage, difficult family dynamics and poor record keeping.

Here are some potential problems if you were to die without a Will:

1. Without a Will, you have not appointed an Executor or Legal Representative. This will cause difficulty for family members in getting information from banks, service providers etc. and will result in delays in dealing with your assets and liabilities.

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2. Without a Will, your assets are distributed according to provincial legislation and this is likely not what you would have wanted. Want your spouse to get everything? This may not happen unless all of your assets are jointly held.

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3. Without a Will, if you have a common law spouse, they will not be recognized as a “spouse” for purposes of distributing your assets.

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4. Without a Will, it will be unclear who has the authority to deal with your business upon your death. Who can sign cheques and contracts and pay the bills including to CRA?

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5. Without a Will, someone will have to agree to step forward to be named your legal representative (now called an Administrator rather than an Executor). This person may need to post a bond of security in order to act (which will cost more money) and there may be disagreements about who should fill this role.