Beneficiaries 101: Who Will Inherit Your Estate?
By Erin Bury, CEO, Willful
One of the first steps people take when writing their Will through Willful, is choosing their beneficiaries. Naming the people or organizations who will inherit your estate is a large part of the Will-making process. So before making it official, it’s an important topic to understand and think carefully about.
Why do I need to include beneficiaries in my Will?
Appointing beneficiaries in your Will allows you to decide what happens to the property, cash, and other assets you’ve accumulated throughout your life – things that have financial and sentimental value. By creating a Will and naming beneficiaries, you’re helping loved ones navigate difficult decisions after you pass away and preventing conflict from arising down the road.
Where do I include beneficiaries?
You can choose beneficiaries to inherit specific gifts, which are identifiable pieces of property or monetary amounts. For example, leaving a gold watch to your spouse. You can also choose beneficiaries to inherit your residue, which is everything left after debts and taxes are paid, estate expenses are paid, and specific gifts are distributed. For example, leaving 50% of your residual estate to your sibling and 50% to your spouse.
You can also leave a charitable donation in your Will by leaving a specific gift or a percentage of your residue to a charity you care about. This is a creative way to make a truly significant contribution to your cause, and also take advantage of Canada’s generous tax incentives.
Who can I name as a beneficiary?
Beneficiaries can be family members, friends, charities, schools, or organizations. Minors can be beneficiaries but keep in mind their inheritance is held in trust until they reach the age of majority (or another age outlined in the Will). It’s also important to know that if you plan on excluding those who you may owe a financial obligation to (such as a spouse or children), you should seek independent legal advice.
What happens if I don’t name any beneficiaries?
If you don’t name any beneficiaries in your Will, provincial intestacy laws decide who will receive your property. This could mean that your estate is distributed to people you wouldn’t have chosen yourself.
How do I name beneficiaries?
It’s best to use first, middle, and last names for people you name as beneficiaries. For any charities or organizations, include their formal name and Charity Registration number. You can look for charities and their details here.
Keeping beneficiaries up-to-date
It’s important to update your Will as your life changes. Life events like the birth of a child, marriage, divorce, or the passing of a relative, can all affect your wishes and require you to update your beneficiaries. As added protection, it’s also a good idea to name backup beneficiaries, and a contingent beneficiary (an ultimate backup beneficiary) to inherit your estate in the event that your primary beneficiaries are unable to.
About the author
Willful online Will platform makes it convenient and affordable to create your last Will and testament from the comfort of your couch. Using technology to provide simplified end-of-life planning, Willful set out to make it easy to get your affairs in order.
Willful worked with experienced estate lawyers to build the most comprehensive online estate planning service available in Canada, so you and your family can be prepared for tomorrow.