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Writing a Will? Don’t Let These Legal Mistakes Cost Your Clients Loved Ones

It is easy for a lawyer to make mistakes when drafting a will. Spotting and fixing the mistake before the will is finalized may not be so easy.  These mistakes can be expensive to fix, if they can be fixed at all, and could result in lawsuits and court proceedings after the death of the will-drafter. Mistakes can create tremendous hardship and cost to the deceased’s family and loved ones.

Here are several common errors and guidance on how to avoid them.

1. Frustrating Beneficiary Designations

Minimizing estate administration tax can be a worthwhile estate planning goal. Registered financial accounts, such as RRSPs, RRIFs, and TFSAs can help achieve this, as can life insurance policies. When properly designated, these assets fall outside the estate and will not be subject to estate administration tax. The proceeds and benefits will also be available much quicker than if they were estate assets. 

Common legal errors concerning these designations include some of the following:

  • accidentally directing these proceeds to the estate or its trustees. Even using language in the will purporting to be a “designation,”  this may not achieve the same goal depending on how it is worded, and these funds will become estate assets with all the cost and delay that goes along with it;
  • trying to replace or provide for an alternate beneficiary of an insurance policy or registered financial account can get tricky. This should be done either entirely on the forms provided by the relevant financial institution, or entirely in new wills with new designations that revoke the old ones. Using a hybrid approach is not appropriate and will not achieve the desired outcome; and
  • failing to properly advise your will drafting client that their beneficiary designations only apply to the accounts that exist at the time, and failing to advise that a later designation will replace an earlier designation.

2. Improper Wording of the Survivorship Clause

A survivorship clause requires a beneficiary to live for a specified period of time to inherit what is bequeathed to them, usually thirty days. In the unlikely event that spouses die together in a common accident, or within days of each other, a properly drafted survivorship clause will ensure the gifts pass to the person or people the will writer wanted them to go to had they known their spouse was no longer alive. It’s important to word this clause correctly to avoid paying estate administration tax twice on the same assets (i.e. once upon the death of the first spouse, and again upon the death of the survivor). 

Common errors in the survivorship clause include:

  • using vague or event-based language (e.g., “when the estate is distributed”) instead of stating a fixed time; and
  • applying the survivorship clause to personal property, which unintentionally may deprive surviving family members of household items.

3. Misinterpreting the Client’s Instructions

Clients express their wishes in words that make sense to them, but they don’t always translate properly into legalese. For example, there are situations where the intent is to manage or distribute funds over time—such as through a trust—but in the will, it may sound like an outright gift. Lawyers must ask the right questions to determine which is appropriate and draft the will accordingly. If the will writer wants there to be specific conditions on if and how the gift will be given, wants periodic payments/gifts at specific dates (e.g. upon a person attaining a specified age), upon specific events (e.g. upon a person graduating from professional school), or any other type of control after-death is involved, a trust is likely required.

4. Distributing Assets Not Owned by the Writer of the Will

Another common error is directing the distribution of property the client does not legally own. These may include:

  • a house that is co-owned by a spouse or parent/friend/business-partner;
  • property and assets that are owned by a corporation, not directly by the client;
  • property and money held in a trust; and
  • property or belongings the person only thinks they own.

It’s essential to verify ownership, especially if the property has a significant value.

5. Mistakes with Percentages

Using percentages to divide an estate can lead to ambiguity and unintended results. For example, unclear language can raise questions about whether a percentage of money or property applies to an individual or to a combination of people. Worse, if the percentages do not total 100 per cent, what will happen to the money or property that is unaccounted for?

Using “equal shares” or “parts” is preferable. It simplifies distribution and provides a built-in mechanism for handling the death of a beneficiary. This is achieved by ensuring their share can be reapportioned equally between the surviving beneficiaries.

6. Payments to the Parents of Beneficiaries

A will may direct the estate trustee to make payments to the parent or guardian of a minor who is a beneficiary. A clause like this must be carefully worded to ensure it does not extend beyond the age of majority (18 in Ontario). Clauses that allow payments to parents beyond this age may be ineffective and the money could end up going directly to the adult child. If that is the will writer’s concern–that an 18+ year old child or grandchild not benefit from a gift until they are older–then a trust is needed with sufficient terms to ensure that result.

Conclusion

Estate planning demands a thoughtful, client-focused approach that anticipates legal and practical challenges. By avoiding common errors, lawyers can better serve their clients, avoid professional negligence claims, and reduce stress and cost for their client’s loved ones after they die.