I DO! ….now what?!?
February is the month of L-O-V-E; it is the season of the color pink, chocolates, and wine. Valentines Day also falls in February, which is one of the most popular times to become engaged. With all this love, sparkles, diamonds, and new engagements in the air, I start to wonder about the next chapter for the newlywed's lives. Couples spend months, if not years planning out their dream wedding day. There is a lot of excitement surrounding dresses, colors, appetizers, and dances, but what happens after the big day?
It is not likely that the happy couple is thinking about their Wills and estate design on their honeymoon; however, they may want to consider some items shortly after the big day that will impact their plans for their new partner and possible family to be.
1) MAKE A WILL -Think of a Last Will & Testament as a set of instructions, without this document that outlines your wishes….well, to be blunt, there are no wishes. After you are married, there may be certain items or gifts that you would like to leave to special people in your life, and without creating an estate plan, you will not have a say in how it will be distributed. If someone has a Will before their marriage, it does not mean everything is great, and there will be no problems, so they should ignore any further planning. In Ontario, marriage revokes a Will, which means that many people are shocked when I tell them that the plan they put into place several years before marriage needs an update much sooner rather than later. Ensuring that a newly married couple completes the task of creating a new will, protects their wishes, and safeguards their plans for their new loved ones.
2) UPDATE BENEFICIARY DESIGNATIONS -When we are single and getting started in our careers, it is common to name a parent or sibling on insurance policies and registered investments. However, once someone marries, it is an excellent time to review your assets and ensure that the named beneficiaries you have are the correct people you want to receive the asset's proceeds. For example, my dearest friends have been married for over ten years now, and the topic of life insurance came up. It dawned on my friend's husband that he had never updated his insurance policy to reflect his wife as a beneficiary instead of his mother. We all laughed, and laughed, AND laughed when he made this realization…everyone was laughing…..except for his wife. It is also not wise to think that if you don't update the beneficiary, your parent or sibling will still give the proceeds of the asset to your spouse because everyone loves each other. If you want the investment to go to your husband/wife, then change the designation. Please do not leave it to chance.
3) MAKE A WILL -I know that I am repeating myself, but I cannot stress enough the importance of having a Will. Without the document that outlines your wishes, your estate is considered "Intestate." It will be distributed according to the SUCCESSION LAW REFORM ACT R.S.O 1990, c.S.26, which essentially distributes the estate by next of kin. If you have a surviving spouse and children, then there is a calculation where your spouse receives a "preferential share" before the remainder of the estate is split between spouse and children. The preferential share is the first $200,000.00 of the estate, with the rest split equally between spouse and children. Let us think about this from the perspective of a new family. The family home is likely the biggest asset of the estate. For the sake of this fictitious example, let us imagine that one person only owns the family home. This lovely fake family is married and has one young child. The spouse who owns the home dies without a will, which means the distribution would be the first $200,000.00 of the estate will go to the spouse, and the remainder will be split between the spouse and child. The proceeds of the amount being divided between spouse and child are actually payable to the child and spouse separately (the children's lawyer has to be involved, and monies are held in trust until they turn of age). To add salt to the wound of grieving, the spouse probably had to sell the family home to be able to pay out the child's share….all because there was no Will.
I do not mean to take the romance out of being newly married, certainly pour the wine and run the bubble bath, but do you know what else is sexy and romantic? Taking care of your loved ones after you are no longer here. xoxo