Mary Luna never considered any kind of estate planning until her parents were hospitalized within a few months of each other five years ago.
“Prior to that, I didn’t think I needed a will because I was single with no kids and no property or large net worth,” said Luna, who is based in Newmarket, Ont.
However, when both her parents became ill, Luna and her siblings ran into issues while trying to handle their bank accounts.
“We found out that they had not created a will, so we couldn’t bring a power of attorney to the banks,” she said. There was also no record of their medical directives.
Her mother’s condition eventually improved to the point where she was able to provide enough information to complete online transactions for both parents.
The experience prompted Luna to create an estate plan a few years later at the age of 38 through the online platform Willful, but she wishes she had done so in her 20s.
“I think it’s one of those things that can easily be pushed aside for later on. When you’re young, you think you have time,” Luna said.
Through Willful, a Toronto business that helps Canadians create legal wills online, she was able to set up beneficiaries, power of attorney for property, power of attorney for personal care and her medical wishes. The names and roles of these documents vary by province.
“I don’t want to make anything more complicated or burden someone with sorting out my affairs. This at least puts everything in a legal document,” Luna said.
“It’s the power of attorney for medical and health that I believe is valuable to everyone,” she added. “Who would really know whether you would want all life saving measures or to withdraw support if there would be no quality of life? It’s not a conversation that really occurs and it is a hard decision to make for a loved one.”
Due to the pandemic, more people are thinking about their future and what they would want to happen in the event of death or serious illness, said Melanie McDonald, vice-president and regional director (Western Canada) of BMO Trust Company.
A power of attorney that manages your money and property is important because you want someone you can trust to take care of your finances and your bills if you were in a coma or couldn’t speak for yourself, she said. The same goes for power of attorney for personal care, also called a personal or health care directive.
“Health care decisions are very much tied to your religious values or other values and beliefs. You really want the right person in your life to make those decisions for you,” McDonald said.
In the case of wills, many young people may be reluctant to create one if they don’t have children, property, or significant investments or savings. However, it they want to pass on any belongings, particularly sentimental ones, then creating a will can be in their best interest.
Most people tend to have very strong wishes about what they want to happen to the belongings that they’re most passionate about. “This could be their shoe collection, their pets, their car, or their bike collection,” McDonald said.
Young Canadians may also want to protect digital assets, such as cryptocurrency, social media accounts, photos in the cloud, blogs or online credits or accounts. For instance, someone could have $200 in a sports betting account now that single-game sports betting is legalized in Canada, McDonald said.
Without a will, Canada’s default laws will dictate executors and beneficiaries for you.
“For a young Canadian, if they didn’t have a spouse or kids, the law says the executor will be their parents and all of their assets, property, pets and everything else will go to their parents. That may not be what their wishes are,” McDonald said.
“In my experience, lots of younger Canadians would prefer their siblings get their property and benefit from their estate.”
In Luna’s case, since she currently doesn’t have children or a spouse, she was able to ensure that her nieces and nephew inherit her estate.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.