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Everyone knows they should write a will before they die. That’s a big ‘should.’

Only 48% of Canadians have a will and even fewer take the time and spend the money to hire lawyers and accountants to make sure their finances are in order before that fateful day.

Which means families are left with complicated legal and financial affairs that may take accountants and courts months to sort out.

“Unfortunately, death is expensive,” Jen Schreurs, an associate with FHP Lawyers in Kelowna, told iNFOnews.ca. “It does take a long time and it does take a lot of money.”

Legalwills.ca did a survey in 2021 and found that 57.6% of respondents did not have wills. Of the 42% who did have wills, 10% said they were out of date. The site says it has been Canada’s number one provider of online wills for 22 years and offers wills starting at $39.95.

Even better is Free Wills Month held each spring in B.C.

That’s a system where charities team up with lawyers to offer free wills to those 55 and older. They will be encouraged to donate to sponsoring charities in return.

Those may sound like great deals but, as with anything, you get what you pay for. The cheap route may be fine for people with no assets, like a home, but not for most people.

“More thought should go into it other than just an internet will,” Schreurs said. “It can be incredibly complicated with subtle nuances.”

First up, is naming an executor or executors for the will. This is something that needs to be agreed upon with the candidates for the task since it's a lot of work and can take up to two years.

It’s not something that should be taken on lightly and may be better contracted to a professional. That, of course, costs money.

The lawyer drafting the free will (or any other will for that matter) is likely to recommend that a person be appointed with the power of attorney to handle financial matters, especially in the case of sudden or unexpected deaths. That’s not included as part of the free will, or the basic online will.

Representation agreements should also be considered. Those give the named person the right to make medical decisions on your behalf. Those can be drafted by a lawyer but there are costs attached, likely to be at least several hundred dollars.

Then there’s the accountant fees.

“Anyone with assets that’s drafting a will, it might also be a good idea to work with an accountant at the time of the drafting,” Nancy Lum, a Chartered Professional Accountant with D & H Group LLP in Vancouver, told iNFOnews.ca. “Sometimes there can be tax savings opportunities that come up or there can be tax consequences on how certain things are distributed under the will and maybe that’s not the intention of the testator.”

The whole process becomes complicated as soon as there are things like more than one beneficiary, assets with different ownership titles, stocks or non-residents to consider.

Even with a simple estate, like a home and one beneficiary, an accountant can be useful. Anything more than that, Lum recommends that an accountant specializing in estates be hired.

The other key thing to do before death is to be organized with your financial information.

“If I was the person having the will, I would write down all the assets I have and be very descriptive about it,” Lum said. “That will help the executor a lot. So, if you have multiple bank accounts, investment accounts, properties, make a very specific list of account numbers, location and include the cost information of the asset.”

There are questions to consider about, for example, leaving a home in your own name or listing the beneficiaries on the title.

As with so much of this, there are no simple right or wrong answers. It all depends on the complexity of the estate and the wishes of the people involved.

“Death is a very complicated process,” Lum said.

No matter how well a person prepares before death, there is still a lot of work for the executor to do afterwards to wind up the estate.

READ MORE: Why you need to talk about death before it's too late

It’s not a simple matter of distributing investments to the beneficiaries, selling the house, car and furniture and divvying that up according to what’s said in the will.

Then there's likely to be the whole probate issue.

“Probate is a process that verifies a will is real under B.C. laws,” states a Government of B.C. website.” Whether a will needs to be probated or not depends on the agencies and financial institutions that hold assets within an estate – they may require that a will is probated before the assets are distributed or accessed by anyone.”

Probate can take up to a year and has be completed before property can be sold.

“In all my years, I only had one estate that did not require probate,” Schreurs said. “In that case, the only asset was a joint bank account.”

There is a probate fee of 1.4% of the value of the estate over $50,000 that is paid to the provincial government. Lower fees apply on the first $50,000.

“Generally, only assets that are in a deceased person’s name without a beneficiary designated are subject to probate,” according to Westcoast Wills and Estates’ website.

That’s why legal and accounting advice is helpful in offsetting some or all of those fees. Part of that advice is to list a beneficiary for all assets, like investments and bank accounts.

There may be capital gains taxes as well. Those could be generated on property over the years before death, depending on circumstances.

But, the beneficiaries may see capital gains taxes erode some of the value of sold property.

When a person dies, all their assets go into the estate.

The executor needs to value the property at that time, usually by paying to have a professional assessment done.

When the property sells, whether that takes months or years, the increase in value since the death is subject to the capital gains tax.

Since real estate fees charged for selling the property are deducted from the sale price, capital gains on many properties sold in a relatively short term are not a factor. A property is exempt from a capital gains fee if it has been a person’s principle residence for the entire time they owned it. That means a “principle resident election form” needs to be filed.

Then there’s the Canada Revenue Agency.

Income tax returns have to be filed as per normal up to the time of death.

Upon death, a person’s assets are deemed to be the property of the estate so, since there will be no further income, that year’s taxes can be filed.

Depending on the time of death during the year, that may have to be a deferred task since tax forms are not available until early the following year.

An estate tax return also needs to be filed once everything is concluded. The estate cannot be fully paid out until a “clearance certificate” is received from the Canada Revenue Agency. That also exempts the executors of any personal liabilities for any unpaid taxes. It, too, can take months for the government to process.

While the various forms can be filled out by the executors, if they’re not done precisely right – and Lum stressed that the Canada Revenue Agency is very strict on this – they could be sent back for corrections, which just delays the process further.

It may be worth the money to pay an accountant to fill them out right in the first place.

While most expenses will come out of the estate when it’s finally settled, cash money is needed up front.

Lawyers generally require a retainer and accountants charge by the hour. There may be other expenses, such as furniture removal and repairs in preparation for the sale of property.

Neither Schreurs nor Lum would speculate on the minimum cost of settling an estate, since each firm has different fee schedules and the amount of time needed to do the work is complicated by the complexity of the estate.

But, it’s fair to say that, since fees for both professions are generally at least $100 per hour and can be many hundreds of dollars per hour, the cost can easily reach into the thousands as a starting point and into the tens of thousands for larger and more complicated estates.

Families need to be prepared for the fact that, while there may be an inheritance in their future, it could take well over a year to collect it and it may cost them plenty of money to get it processed.

And, of course, none of this includes the costs of cremation or burial and the services that generally go with those activities.

To contact a reporter for this story, email Rob Munro or call 250-808-0143 or email the editor. You can also submit photos, videos or news tips to the newsroom and be entered to win a monthly prize draw.

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