Members of the millennial generation are taking a little longer than their baby-boomer predecessors to hit life landmarks things like marriage, home ownership and the birth of a child.
These are the milestones that traditionally spur thoughts of estate planning, but there’s no need for the millennial cohort — who are now aged roughly between 25 and 40 — to wait until then to get started.
Below are some of the key considerations they should take into account when drawing up an estate plan:
If you’re thinking about getting a will at all, you’re heading in the right direction.
In my view, too few people understand the consequences for their estate if they die without a will in place, often assuming that it will all go to their partner or spouse — if they have one.
In fact, there is no provision for automatic inheritance by a common-law spouse in Ontario’s Succession Law Reform Act (SLRA), which determines how assets are distributed in an intestacy.
Even married spouses may not get everything if there are children involved since the SLRA only provides for them to get the first $350,000 from an estate. The rest is divided between the spouse and any offspring of the deceased. If there were any minor children who survived the deceased, their share of the estate will be frozen until a court appoints someone (usually the surviving parent) as their guardian for property — a potentially exhausting and expensive process.
If you want your married or common-law spouse to receive all or part of your estate, you need to make a will that states exactly that. The same goes for any other person that you would like to see benefit from your estate: take control of your legacy by drafting a will that ensures your wishes are met.
Choosing your executor — also known as the estate trustee — is one of the most crucial estate planning decisions you will have to make.
It can be a tough job with plenty of responsibility, so you should run the idea past your chosen executor before making the appointment, to ensure they’re ready to commit the time and effort required.
However, it’s also important to pick someone who is able as well as willing. On the practical side, a trusted friend or relative who has plans to leave the country or province may not be a realistic choice.
When it comes to the substance of the estate, the increasingly digital nature of millennial estates could pose a problem for older or less technologically savvy executors who may struggle with the intricacies of cryptocurrency investments, social media profiles and digital accounts.
Some people like to solve this problem by appointing more than one trustee so that they can rely on one another to fill gaps in their individual expertise. Either way, your pick(s) should have a good grasp of all your assets — what they are, where they are held and their approximate value. If you decide to name more than one executor, it is crucial to ensure they can work cooperatively.
Although it’s an unlikely (and distressing) scenario to consider, millennial parents should turn their minds to the possibility that they and their partner may die before their children reach adulthood, so that they can pick a suitable guardian to care for the surviving minors.
Factors such as the potential guardian’s health, age and existing relationship with the child will help determine the final choice, with many opting for a family member or close friend who has indicated a willingness to take on the role.
Many parents also use their wills to set up trusts for their minor children. These trusts will allow your chosen estate trustee(s) to access the money for the child’s benefit while they are growing up, and to hold on to the funds for the children beyond the age of 18 until they’re ready to manage the money on their own.
Those with pets consider them members of the family, which is why I always ask clients if they’ve thought about who will take care of their furry friends when they’re no longer around.
Indeed, a recent survey of U.S. millennials found 78 per cent of those with a will had incorporated guardianship arrangements for their pets in the document.
If you have a pet guardian in mind, make sure you check that they’re on board before naming them in your will. It’s worth identifying an alternate in case they change their mind when the time comes, and you may also want to bequeath some money to go with the animal since the costs for food and vet bills can add up over the years.
Anyone with a will in place should revisit it periodically, not only to account for their own shifting preferences, but also for legislative changes affecting the area.
In the last year, Ontario’s estate laws have undergone one of their most significant reforms in a generation, thanks to the passage at Queen’s Park of Bill 245, the Accelerating Access to Justice Act, which made several amendments to the SLRA.
For instance, a person’s marriage no longer revokes any of their existing wills under the new law, which did away with the traditional need for newlyweds to draft a fresh one.
The changes also mean that separated spouses are treated more like divorced spouses when it comes to the distribution of an estate. The SLRA already acted to undo unintended gifts by the deceased to a divorced spouse by treating the former partner as if they had predeceased the testator.
Bill 245 means that the same rules now apply if the parties remained legally married but had been separated for more than three years or had a valid separation agreement in place by the time of the testator’s death.
If you have questions about estate planning and would like to explore your options, we would be happy to help you.