Unique ideas for your last will and testament


When you write a will, it is your opportunity to ensure your final financial and other wishes are carried out by your executors. given how many people have no will at all, I am happy to see technology is making it easier to prepare and sign a will without having to leave home. But there are circumstances where a little creativity may be worth considering, and that generally requires guidance from an experienced estate lawyer. 

I often talk to clients about estate planning, and sometimes those discussions involve planning for a meeting with a lawyer. Here are a few ideas to fuel your own discussions.

If you have young kids

The math I like to bring people through is meant to help them to understand the value of their estate. This is generally calculated as:

Value of estate = (assets + insurance) – (debt + income tax + estate costs) 

Real estate values are so high in some cities that estate values have risen considerably, even for middle class families. However, insurance is also a big consideration. Life insurance is relatively affordable at a young age, and many young people are well insured against the risk of death, even if they are not well insured against other risks. 

In the case of a couple, in the unlikely event they both died, their life insurance alone could be well over a million dollars without considering their other assets. This potential double life insurance scenario (if both parents died) could leave a sizable estate for surviving children. These funds would generally be held in trust, used to provide for their needs while they are minors, and then distributed at some point after the children have become adults. 

The big question is: How much estate  is too much? 

In other words, if you died and left behind children, should the whole estate be split between your kids? Although the likelihood of both parents dying while they have young children is low, you should write your will based on what you would want to happen if you both died tomorrow. 

If an estate’s value, including insurance, could be a lot of money, consider whether your will should include other beneficiaries like extended family, friends or charities in addition to your children. 

An interesting trust clause for young children is to tie their inheritance to academic or other goals. One example could be advancing a certain percentage of their inheritance upon successful completion of a post-secondary degree before age 25, or otherwise delaying the trust distribution to age 30. This could motivate a child academically. 

If you’re in a second marriage

Many people are in second marriages and have children from a first marriage. In these kinds of situations, a portion of their estate is left to the new spouse as well as to the children from a first marriage. 

Planning related to the home is important. Real estate in second marriages is often held as “tenants in common” so that each spouse’s share can be left to their respective children. Wills sometimes include clauses permitting a surviving spouse to live in a home for a period of time before it must be sold, often allowing the surviving spouse the first right of refusal to purchase the home from the estate of the deceased spouse. 

It is important to consider things like who will pay the operating costs for the home during the period before it is sold, as well as how the home will be valued if the surviving spouse decides to purchase the home. These may not seem like important factors, but can lead to disputes after your death between your children and their step-parent. 

Another consideration is to ensure sufficient life insurance coverage is in place, so the surviving spouse has cash available to purchase the home. A joint first to die life insurance policy can work well for this purpose, either in lieu of or in addition to individual life insurance policies for both spouses. 

Including charitable planning

Charities can be named as beneficiaries in a will. Some people leave specific bequests of dollar amounts before dividing up the residue, while others leave a percentage of their estate value. 

An interesting alternative is to leave money indirectly to charities rather than directly. Some banks offer programs whereby a donation can be made to a gift fund that has certain advisory rights. These rights can include:

  • selecting a name for the fund
  • allocating annual grants from the fund to be donated to charities
  • naming successors to manage the fund

This can be a way to involve your beneficiaries in ongoing donations that will be made in your name or your family’s name. 

Royal Bank offers their RBC Charitable Gift Program with a minimum gift of $25,000, and Toronto-Dominion Bank offers their TD Private Giving Foundation with a $10,000 minimum. There are non-bank alternatives like Canada Gives and Abundance Canada as well. These flexible, donor-advised funds can allow your beneficiaries to make ongoing gifts to various charities in your memory. 

Some charities allow donor-advised funds to be created directly with that charitable organization. The donor or the donor’s estate may be able to make non-binding recommendations for the use of those funds by the charity thereafter. 

Bottom line

Wills are important, and every adult should have one. Estate plans do not need to be overly complex, but sometimes a little creativity and the help of the right professionals can help ensure your loved ones are well provided for and your legacy is yours alone. 

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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