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Complicated Wills – Do They Achieve The Perfect Balance Or Are They A Liability?
Author: 
Philippe Richer
October 26, 2022
Headshot of Philippe Richer, principal lawyer

We have drafted close to 2,000 Wills since 2015. For the most part, the Wills we draft are straightforward. Spouses leave everything to their surviving partner and later to their kids when both parents are gone.   

From time to time, clients express a concern about one or more of their children.  Adult children may be disabled or suffer from addiction issues. Minor children cannot receive inheritances. Sometimes a family breakdown can lead to other complications in otherwise close relationships.

In cases like this, we can help parents fulfil their desire to include their child or children as beneficiaries by establishing a discretionary trust on their behalf. Trusts can complicate things, but in some cases, they are an appropriate tool.

Complicated Instructions – Falling Down The Rabbit Hole

Sometimes we have clients who are very specific about their wishes. These clients fall into two categories. The first category consists of clients who want to prepare for all possible scenarios. Not only do they ask to set up the first and second class of beneficiaries (the spouse and the children in equal shares), they look to create a third and fourth class of beneficiaries in the event a catastrophe occurs, where the whole immediate family dies together (in a plane crash, for example).

While this is possible (both the accident and accommodating their wishes) we usually refer to this as falling down the rabbit hole. If a testator (the person signing the Will) only specifies spouse and children and a catastrophic event occurs, the Intestate Succession Act of Manitoba dictates how the assets will be distributed. I’ve previously written about dying without a Will.

Essentially, the Intestate Succession Act will dictate that your assets should be distributed to your nearest relatives. So even if you don’t address it in your Will, your families will inherit.  As I often say to clients, if both of you (parents) die at the same time as your children, do you really care who gets your assets if it’s going to your families?  It avoids the obligation and challenges of having to think about who will get what and in which proportion under every conceivable circumstance.

Testators are often torn by these decisions even though the possibility of occurrence is remote. I’ve seen clients agonize over appropriate distributions to nieces and nephews when their financial situations vary.“If we give 10% to Suzie, and only 5% to John, then how will they react?” when the likelihood of their children dying prior to them is minimal.

Ruling Beyond The Grave

The second category of clients seeking more complicated Wills are those who want to control how the money will be used after they are gone. These can take the form of conditional gifts. For example, John is to receive 5% of the residue if he completes a post secondary education by the time he reaches the age of 25. They can also take the form of trust where a trust is created to distribute funds to the beneficiary over time.

Trusts require work. Trustees must manage the funds and the persons named originally may no longer be suitable to act by the time their duties are engaged. They also require professional advice from accountants and lawyers, so ongoing costs apply.  

In the end, adding elements or layers to a Will can unnecessarily complicate the document.  Whenever legal documents become more complicated, unintended consequences are more likely to occur.

Aside from drafting all these Wills since 2015, we also assist families in administering estates. We have helped over 500 families since 2015 applying for letters of probate or administration. We rarely have problems with these files, however, when we do, it could be owing to either a poorly drafted or a needlessly complicated Will.

Unanticipated Changes

Human beings have a very difficult time contemplating a set of circumstances different  from the one in which they are currently living. 

Life takes twists and turns. It rarely goes as planned. A Will remains valid until the person dies. They can be several decades old by the time they are needed. Individuals named as trustee can move away, age, become incompetent, or die. An otherwise simple distribution may require a court application to remove inappropriate trustees, or seek direction when a provision in the Will becomes obsolete or ambiguous.

That’s why it’s a good idea to revisit your Will every few years to make sure it’s still up to date to the best of your ability. 

Simple Will Characteristics

The best advice is to make your Will as simple as you can. Simplicity stands the test of time. Simple documents are robust to changing circumstances. A simple document includes the following characteristics:

  • Clear, immediate gifts. (i.e. $5,000 to Cancer Care or Uncle John);
  • Enough executors (including younger ones) to protect against unexpected changes;
  • When trusts are necessary – broad trustee discretion. You trust them to manage the estate, you should trust them to make the right decision at the time the decision is made;
  • Percentages or equal parts gifted to residual beneficiaries (i.e. those who receive what’s left over after the specific gifts are made and the debts are paid off);

Keep the classes of beneficiaries short. Consider only the generations that matter most – after your spouse, your kids. Consider the next class ONLY if there are compelling reasons to do so, otherwise, the Intestate Succession Act should govern.

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