Depending on which study you believe, between one-third and one-half of Canadians don’t have a valid will. Even at the low end, that’s a sorry state of affairs—fear of lawyers notwithstanding.
Those statistics don’t segment out business owners; a group for which it’s safe to assume contact with the legal community is more regular. But even if 20% of that group is without a will, that’s worrisome because private enterprises represent nearly half of Canada’s economy.
If those companies, and the wealth they generate, aren’t properly passed down to succeeding generations, it sucks capital out of the economy (financial support of litigators notwithstanding) and fractures families.
Assets held in limbo by lawsuits benefit no one.
Reaching conclusions about what percentage of a business or other assets should go to which child is time consuming. And the thought process is made more complex when one child works in the company (and adds economic value to it) while other children do not. Keeping it all fair, and not sparking a firestorm among heirs, is a real challenge; so much so that it often inspires procrastination.
But the reality is, time is tight.
There’s an old joke that the baby boomers watched their parents grow old and decided not to. But the levity of that maxim hides a grim reality—the post-war generation, which soon will be leaving assets to its heirs, is in stubborn denial about its mortality.
One of the first clauses in any will requires the person whose name’s at the bottom to declare himself or herself to be of sound mind and body. That’s easy enough, provided you’re reasonably young and healthy when you’ve signed on the dotted line. Wills are also more court-proof if they clearly articulate the writer’s wishes. Many of them do not.
Wills get challenged every day, and the odds of it happening jump exponentially when the proceeds from a multi-million-dollar company hang in the balance. The younger you are when you make your will, the less likely it is that some form of cognitive impairment can be discovered (or suspected) if the family disagrees about the division of your assets after you’re gone. And, while soundness of mind doesn’t guarantee a will won’t be challenged, it certainly helps.
Of course, if the family unity argument doesn’t persuade, you can always try this trick. Say this phrase out loud, “The federal and provincial governments know exactly how I want my assets handed down and are fully aware of my preferred choices for philanthropy.” Unless that phrase is 100% true, buckle down and start determining your wishes today.
This article originally appeared in Canadian Capital.