Estate Planning and the Single Woman
In the romantic novel “The Notebook”, author Nicholas Sparks chronicles an everlasting romance in which young, naive hearts grow old together. As the story concludes, the elderly couple affectionately reminisce on a lifetime spent at each other’s side. It is a storybook ending when they pass away together in the same room. Unfortunately, the reality for most married Canadian women is that they will become widowed by their fifty-sixth birthdays. In excess of 40% of Canadians over the age of sixty-five are single. The vast majority of this total, over 85%, are single because of a spouse’s death, divorce or separation. Since women generally live longer than men, the majority of these singles over the age of sixty-five will be female in the coming years.
Estate Planning is a Process….NOT an Event
It is a common myth that only married people with young children or the very wealthy need to estate plan. Moreover, the focus of single’s planning is often that they only need to create a framework for substituted decision making in the event of death or incapacity. This viewpoint is an overly narrow view of the actual process of estate planning as an event rather than an ongoing process. Traditionally, only tactical tools such as wills, powers of attorney and life insurance were considered to combat estate shrinkage caused by various taxes at death or to ensure decision-making continuity over asset control. However estate planning is a long term, strategic process that demands attention to values, vision and purpose as well as to tactical considerations about plan execution. This is ideal for female decision makers as they tend towards solutions that are longer-term and achieve broader strategic goals for their heirs or philanthropy.
Estate planning for the single female at any age or relationship status has some unique elements that require particular attention. As well, the now aging baby boomers represent a significant demographic cohort in the population both in terms of the absolute number of individuals and total wealth under control. Women are the future of Canadian estate planning and single women will increasingly be making most of the decisions about wealth transition. And it will be substantial with almost $1.5 trillion being transferred over the coming two decades.
This Series of Articles:
In this series of articles, I will examine some specific areas of consideration for single females planning their estates including:
- I’m single, do I really need a will?……..Yes!
- CHOOSE an Estate Planning Lawyer
- CHOOSE Your Estate Trustee
- Powers of Attorney are Very, Very Important
- Planning for Your Heirs & Beneficiaries
- Building Your Advisory Team
- Incorporate the Long View In Your Planning
I’m single, do I really need a will?……Yes!
In 2018, an Ipsos Reid poll revealed that 50% of all adult Canadians did not have a will. Of those who did, another 15% had wills that were badly outdated. If you are an adult female you should have a will. The alternative to dying with a will is called dying intestate. An intestacy means the relevant provincial legislation will make all the important decisions for your estate. It is a common misunderstanding that the default regime is basically what most people do in their wills (if they had done one). In reality, it isn’t even close. For example, absent other planning, beneficiary designations or shared ownership, in an intestate estate distribution:
- If you wanted to give to a charity at death they will not be considered;
- If you wanted to care for a parent or sibling with some of the estate assets this will not likely be achieved;
- If you have a common law or same sex partner they may not be treated as a spouse and their property and support rights may be quite limited;
- If you have minor children you will not be able to choose and direct their guardianship;
- If you have friends you wanted to make gifts to at death this will not happen;
- If you had an adult step-child or grandchildren you wanted to specifically include in the estate this will likely not happen;
- If you were concerned that loved ones and heirs would be unprepared to receive wealth or damaged by the inheritance you have lost the ability to manage that risk;
- If you wanted privacy the estate will now be a Court case open to the public;
- If you wanted control over beneficiary access to capital and income this will not occur as most statutory beneficiaries will receive their full entitlement when they turn eighteen;
- If you wanted to choose the person or team to administer the estate this will not happen;
- If you wanted to preserve some or all of the financial wealth to invest into the social, human and intellectual capital of your family in a long-term strategic manner, this will not happen
This is just a partial list of negative outcomes. It is difficult to overstate the importance of a will to a single person. Are any one of these outcomes important to you and your estate planning? If they are, consult with an estate planning lawyer to fulfil your abundant estate goals and do a will.
In my next post in this series – CHOOSE an Estate Planning Lawyer
Chris Delaney, B.A., LL.B., B.Ed., TEP, FEA is a Professional Keynote Speaker and author of “The Naked Opus: Growing Your Family Wealth for the Long Term” (2018). His next book “Twenty Estate Planning Mistakes Everybody Makes” is due in Spring, 2020.
The scenarios created in this article are fictional and meant for illustration only. Any similarity to any person is purely a coincidence. The suggestions and considerations in this piece are intended for general information. Your specific situation will be unique and every reader should consult with their own estate planning professionals including lawyers, accountants, insurance professionals and financial advisors for advice on which they can rely to achieve their specific estate planning goals. Not intended as legal or tax advice.