Why common-law marriage is a myth

Often times we end up writing articles that try and explain the kind of mess you can get into if you don’t have a Will. So often, the complexities of the law can be avoided completely if you write a Last Will and Testament. Common-law marriage is a case in point.

According to some statistics, about one in six people co-habit without getting married; clearly there are many reasons for this which we won’t get into, but if ever there was a case for preparing a Will, a common-law marriage is it. I will now attempt to distill the vagaries of the law across different jurisdictions.

In the UK, the law is simple and unequivocal;  ‘common law marriage’ has no recognition in law and unless you have both made Wills neither of you will have any automatic rights to inherit from the other. The intestacy rules dictate what happens if you die without a valid Will and they make no provision whatsoever for a ‘partner’; it is only a ‘spouse’ who will automatically inherit. You may have co-habitated for 50 years, but in the eyes of the law, you are complete strangers if one of you dies without a Will (you may be able to make some claim based on a “dependency”, but this would require a challenge to the default distribution of the estate). Incidentally, if you do inherit money or property from an unmarried partner, you are not exempt from paying inheritance tax, as married couples are.

In Canada, it is slightly more complicated. British Columbia, Saskatchewan, Manitoba, and the Territories do recognize common-law relationships, however, Ontario, Alberta, New Brunswick, Nova Scotia, Newfoundland and Labrador, and PEI do not recognize common-law partnerships and surviving partners will face the same challenges as those described for the UK (above).

The US also has very complicated State specific laws which I can’t go into here. I have spent literally hours looking through State laws to find a good explanation that would fit into this blog, but it cannot be done. In summary there is a common misperception that if you live together for a certain length of time (seven years is what many people believe), you are common-law married. This is not true anywhere in the United States. There are 11 states that recognize the existence of a common-law marriage, and this allows the surviving partner to inherit if there is no Will. For the other States there is no protection for surviving common-law partners.

In short, if you are cohabiting, in a “domestic partnership”, living in a putative Marriage (one that is simply implied) or a common-law situation, you absolutely must write your Will to protect the rights of your surviving partner. You should also prepare a Power of Attorney and Living Will because depending on your jurisdiction, your common-law spouse may have no rights if you were ever to be incapacitated.

Fortunately, a Last Will and Testament, Financial Power of Attorney, Healthcare Power of Attorney, Living Will and Advance Directives can all be created through the online tools at www.legalwills.ca , www.uslegalwills.com and www.legalwills.co.uk. The whole process takes no more than a few minutes and can protect the rights of your partner. It is a serious issue that should not be put-off.

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The funnel to a successful estate plan

It’s an unfortunate reality that very few people end up with a perfectly executed estate plan. In an ideal world we would see every person’s assets being passed to the next generation in a way that represents their wishes, in reality there are a number of key steps to this process and consequently too many points of failure. This post will explore those steps and what we are doing at LegalWills to try and improve the numbers;

1. 65% of people don’t write their Will

This is of course the most significant leak in the funnel. The vast majority of people never create a Will because it is too expensive or inconvenient. As a result, people procrastinate thinking that they can get to it some time next year. Alternatively they wait until there is stability in their life because they think that the writing of a Will is something that they only want to do once in their life. We often hear from people who say “I will be getting married next Summer, should I hold off writing a Will until then?”. On the one hand, it is true that getting married will invalidate the Will in most jurisdictions, but there is never a time that a person should be without a Will. So we recommend that the Will is written today, updated when the person gets married, and updated every time they experience another major life event. Which brings us to the second issue – Funnel

2. Most Wills are not kept up to date

When a person visits a lawyer to prepare their Will, they can pay a significant amount of money and with that, they would expect the document to last quite some time, if not a lifetime. The reality of course is that the document can be out of date by the time the person gets home. There are many high profile examples of Wills not being updated with dire consequences; new children not being included, new partners, Executors who are no longer fit to serve. In fact, most celebrity Will disputes are caused by a Will not being updated to reflect new circumstances. A Will should not only be updated when there are changes in personal circumstances, but also when a life event happens to anybody named in the Will. It may be that the personal guardians for your children have moved across the country, had triplets of their own or for whatever reason are simply no longer the best choice. Many times we hear from people who explain that “I do have a Will but it was written twenty years ago, before we had children”, in which case, although they are one of the 35% with a Will, it is all but useless.

3. Many Wills are never found

The single most common question we receive at LegalWills for non-customers is “my father had a Will, but we don’t know where it is, how can we find it?” and the short answer is, you can’t. It doesn’t matter whether the Will is stored at home, or with a lawyer’s office, if the family and loved ones are not told where the Will is located, they have very little chance of finding it. We also hear from customers who aren’t sure how to revoke an old Will and explain that “I had a Will written 15 years ago with a lawyer, but I was living in a different city then, I’m not even sure that the lawyer is still there, how do I cancel this Will”. In this situation the testator can’t even find their Will, so there is no chance of a family being able to find it. So although this person is technically one of the 35% with a Will, it hasn’t been updated and it has no chance of being found.

4. The Executor has no idea how many assets there are

We are now left with less than 10% of the population; they have written their Will, they updated it regularly to reflect changes in their circumstances, their family and loved ones are able to find the Will when they need it, but now the Executor will have to find the assets. But there is no list of assets kept with the Will; so infrequently used bank accounts, online assets, dormant savings accounts, stock purchases, or even cash under the floorboards will never be found and never make their way to the beneficiaries. It is never a good idea to include a complete list of assets in the Will itself; they change frequently and you wouldn’t want to have to update the document every time a new account is opened, but the Executor needs to know when their job is complete.

At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we have tried to solve these issues. Firstly, we created a service that allows you to write your legal Will for $34.95 or £24.95 from the comfort of your home. We then allow you to update the document by simply logging into your account, making the change, and printing a new document. We then allow you to create messages that can be distributed to key people after you have passed away, and this can include instructions for locating your Will. Finally we have teamed up with My Life Locker™; the Ultimate Life Organizational System. Using this service you are able to maintain a file of your personal assets which can then be accessed by designated keyholders™ only at the appropriate time. This ensures that all of your assets make their way to your beneficiaries.

Writing your Will isn’t about you…

We occasionally hear people explain that they haven’t prepared a Will because they don’t really care what happens after they have died – they’ll be dead. This attitude always dismays me a little because writing a Will isn’t about you – your Will is for your loved ones. The excuse is often followed up with “I don’t need a Will, it’s obvious what will happen to my things”. A recent news article highlighted why these approaches are so disrespectful to one’s family.

In Canada, you can claim a tax free spousal rollover from retirement savings, as long as it is all completed within a year. A 54 year old widower lost his wife to cancer, and was the Executor of the estate. According to the rules, he has to submit the paperwork with the bank; including the death certificate, Will and probably probate documents. In this case, the bank lost everything and he was supposed to follow up. But guess what; he has 3 children from 5 years old to 16 and he had just lost his wife. In his words “I was overwhelmed with worry, and the priorities were always the kids. I was reading up on what happens with kids after they lose their mom….Oh, God. There were too many emotions and too many other things happening with the kids.” In this unfortunate case, he simply lost track and was expected to pay tax on the $80,000 savings (the bank has since stepped in and offered to pay).

This expression of being overwhelmed is very common for loved ones when a family member passes away. Throughout these emotionally desperate times there is a funeral to arrange, banking, taxation, care for the family, the list is endless. Many people have a hard time filing their taxes at the best of times, so imagine trying to do it shortly after your partner has passed away.

There are two key points to understand. Firstly, taking care of the bureaucracy is usually much easier with a Will in place. Furthermore, the Will  allows you to choose an Executor for your estate, and given the emotional toll on your spouse, it may make sense to appoint another family member or trusted friend to take care of the paperwork.

I find it odd that people care so much for their loved ones while they are alive, but leave them with a legacy of problems by dying without a Will. It only takes about 20 minutes to write a Will at legalwills.ca, legalwills.co.uk and uslegalwills.com and costs less than dinner and a movie.

Writing a Will isn’t for your benefit, it is for your loved ones.

Why can’t most people afford a Will?

We know that every adult should have a Will. There is never an appropriate situation to die intestate; it leaves a mess for your loved ones, and key appointments like those of the Trustee or the guardians for children are left up to the courts. However, lawyers continue to charge several hundreds of dollars or pounds to prepare what is often a very simple document.

Canada’s top judge once again berated the legal profession for making themselves inaccessible to the majority of citizens. It’s nothing new, she said the same thing a year and a half ago. She made the point that writing a Will is a basic right, and everybody needs one, but how many people can afford $600, and why would a lawyer charge this much for a Will that could be generated by an intern by using Will creation software.

If we look at the average pay of “the 90%”, in the US, they are making about $36k a year. After paying bills, it doesn’t leave much for a discretionary spend of $600 for a Will. Particularly, if the Will might only have a useful lifespan of a few months or a year. Does this mean that 90% of the population have to just do without?

One of the comments under this article summed it up beautifully

When you have to work a week to pay one hour of legal fees, the system is broken.

Other options are available, like the blank form Will kit, but as we’ve written in the past, they are terrible, and it’s not fair that people on a tight budget should have to make do with a solution that is inherently problematic.

Yesterday we received a wonderful letter from a customer;

I have just completed an on-line Will for my 82 year old mother-in-law who is about to have a hip replacement operation, not serious but made her think about her Will. She has no property and her estate is worth less that £10,000 enough for her funeral and a few Premium bonds left to the children. She is currently living off a state pension so £200 solicitors fees for a Will would have meant hardship. Your software was easy to use and took up very little of my time.   The price of £25 was excellent value for money and affordable for a person on a state pension….You should be very proud of your Company and I wish you every success

We are indeed very proud of our company and what we are able to do. Through the services at LegalWills.caUSLegalWills.com and LegalWills.co.uk we have been able to help tens of thousands of people prepare their own Will, every bit as solid as a Will created by a professional, but at an affordable price. We do feel that writing a high quality, legal Will is a basic human right and that legal professionals are too expensive for the vast majority. We also feel that lawyers and solicitors charge too much for what is often a very simple service.

Unfortunately today, this is a conversation you will rarely hear

Client: “I want a simple Will, everything I own to go to my spouse, and if something happens to both of us, to be shared equally between my two adult children”.
Lawyer: “You know, that will only take about 10 minutes, and I can get a legal clerk to put it together – let’s call it $25”.

The broken system of the Last Will and Testament

morse

Samuel Morse invents the telegraph and the UK Wills Act was written

We live in a wonderful age of smartphones, social media, biometrics, geolocation and even “smart clothing”. There is however one industry that seems to have dodged the world of technology – the system of writing a Last Will and Testament hasn’t changed much in centuries. In fact, the law pertaining to Wills in the UK was written in 1837, the year that Samuel Morse invented the telegraph, and aside from a few minor updates, the law has not really changed very much. Today, there are at least three major issues with our system of writing a Will;

1. Most people don’t have one

Everybody should have a Will, but most people don’t have one, and for those that do, most are not kept up-to-date. This is a serious issue as people end up dying intestate and their estate is not distributed according to their wishes, or worse, their wealth goes to the government. There are a number of reasons for this;  general procrastination and cost are most frequently cited. In most cases though, it comes down to the misconception that the only people who can write Wills are legal professionals. This is of course not true, anybody can write their own Will, but the legal profession continually scaremongers the general public by making weak analogies (“you wouldn’t perform your own brain surgery, so why would you write your own Will?”) or making it sound more difficult than it actually is “use a lawyer because you have to sign it correctly or it is invalid” (you have to sign the document in the presence of two witnesses….most people can understand this instruction). But the best method for making the process seemingly beyond the understanding of the general public is persisting in using the language of Chaucer and Shakespeare. Wills are still filled with terms like “hereinafter”, “thereof”, “hereunder” and 250 word sentences (I counted an actual sentence in my Will). There is absolutely no justifiable reason for forcing a document written in 2013 to be totally unreadable. There is also no legal requirement to use impenetrable prose to write a Will.

2. Finding the Will

The most frequent call we receive at LegalWills is from a loved one who thinks their family member had a Will, but they can’t find it. There is no registry of Wills, and if there were, most people wouldn’t use them. There is also no way of knowing whether a Will that has been found is the latest version. It is a system that should not exist in the advanced technology age that we are living. The only legal Will is a printed piece of paper with a scrawled signature. Electronic Wills are not legal, nor video Wills, nor digital signatures on Wills. If a person dies in a house fire, chances are their Will went with them. Everybody who dies from a natural disaster will probably be deemed to have died intestate as their Will went with the tornado…flood…tsunami. And don’t assume that writing a Will with a lawyer is any help, we often hear “my father died in Vancouver, he wrote a Will with a lawyer, but we don’t know which one, but I think he wrote it about 25 years ago”. It is a hopeless situation.

3. Collecting the Assets

Assuming that a Will has been written (point 1) and the Will has been found (point 2), the Will probably says something like “I leave my entire estate to …” . The Executor then has to start gathering up these assets; the life insurance policies, bank accounts, government bonds, share certificates, cash, online accounts. The problem is, the Executor has absolutely no way of knowing when they are done. We wrote about this in a previous article when Citibank put out a 16 page supplement to the New York Times with a list of thousands of old accounts asking for people to claim them. There are some tools available to help, like www.mylifelocker.com. But again, it’s a problem that shouldn’t exist in 2013.

At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we are trying to help with each of these issues, and I will describe in more detail in future blog posts. But it is infuriating at a time when I can buy a pair of socks with smart sensors and an accompanying iPhone app that the Wills business seems to have been frozen for 200 years.

I’m trying to think of a good reason to not have a Will….

The story of Roman Blum has puzzled me all day. He was very wealthy – to the tune of $40M. He had many friends and was a fixture of the New York social scene. He was an incredibly smart business man, and employed a group of professional advisors including accountants and lawyers. He was obviously touched by many social causes having been a holocaust survivor himself. So how could a man in this position, reach the age of 97 and still be procrastinating over the act of writing his Will? How could a man with such a sizeable estate miss the boat entirely, and allow the whole lot to pass to the State treasury?

The New York Times article has some illuminating quotes from his friends and professional advisors, which has relevance to the 60 percent of adults who don’t currently have a Will;

He was a very smart man but he died like an idiot”
Paul Skurka, a fellow Holocaust survivor who befriended Mr. Blum in the 1970s

This comment demonstrates that writing a Will is often not about YOU, it’s about everybody that is left behind to pick up the pieces. It really is idiotic.

I spoke to Roman many times before he passed away, and he knew what to do, how to name beneficiaries,Two weeks before he died, I had finally gotten him to sit down. He saw the end was coming. He was becoming mentally feeble. We agreed. I had to go away, and so he told me, ‘O.K., when you come back I will do it.’ But by then it was too late. We came this close…”
Mason D. Corn, his accountant and friend for 30 years.

The man was 97 years old. He should have written a Will in his twenties and updated it throughout his life. Planning to prepare a Will just before you die is a desperately bad idea.

None of Mr. Blum’s friends know why he never wrote a will. Those close to him say it may have been superstition or, after coming so close to dying during the war, a refusal to contemplate his own mortality.”

At LegalWills, we can guarantee that you are no more likely to die if you have written your Will. We can also guarantee that you will die one day.

He may also have been unwilling to share the full details of his estate with a lawyer, the desire for secrecy a holdover from his experiences during the war.”

We have heard this before and explains why services like those offered by us at LegalWills.ca, LegalWills.co.uk and USLegalWills.com are increasingly popular. They are private and convenient, and your personal affairs need not be shared with anybody.

There is a lot of conjecture as to why Mr Bloom never created a Will, but there is real tragedy here. I am quite certain that if he had taken the few minutes to write a Will, he would almost certainly not left his entire fortune to the State of New York. That is not what he wanted.

Things can go wrong

Many people have a strange notion that the best time to write their Last Will and Testament is just before they die, and that preparing the document today is unnecessary. We’ve even had people on our Facebook page say that “fortunately, I don’t need a Will yet”. We made reference to this in an earlier blog article and explained that there are at least three important issues with taking this approach;

  1. You really don’t know when you are going to die
  2. When we are about to die, we may not have the facilities in place to write a Will, and it may not be the first thing on our minds
  3. We may actually lack the mental capacity to prepare a Will at this time and the document is more likely to be challenged.

It has also been suggested to us that some people feel that preparing their Will is actually tempting fate; in other words, if they write their Will, they are actually more likely to die!

We try to explain to people that a Will is not a final document; it can be updated throughout one’s life. In fact, it should be reviewed on a regular basis and updated whenever there is a change in financial or personal circumstance, and not just for the Will writer, but also a change in circumstance for anybody mentioned in the Will. It is always a good idea to have a Will, even if you are young and healthy.

This was made even clearer to me in the last week by two separate incidents that happened to my close friends and neighbours. Fortunately, nobody was hurt, but it demonstrates how quickly things can go wrong.

The first incident happened a few doors down the street. We’ve had a very long hot summer here and one afternoon for whatever reason, some dry grass ignited in the back yard of a house. It quickly caught onto some bushes, a tree, then some power lines which ignited the roof of the house. Within a few hours a beautiful residential house was completely destroyed. Nobody’s fault and there was nothing that anybody could have done.

The next incident happened just a few days later at a friend’s cottage. The days of humidity finally broke and a thunderstorm came through. A few miles from here, the thunderstorms came out of nowhere and were violent. My friend was stranded in their cottage while trees were being uprooted all around them. After an hour or so, they emerged from the cottage to see complete devastation.

Natural disasters do not need to be on the scale of a Tsunami or a Katrina. They can happen very close to home and barely warrant a mention in the news. But the impact can be profound.

None of us are immortal and it doesn’t matter how healthy we are, or how careful we are; things like this can happen.

Fortunately at sites like LegalWills.ca, USLegalWills.com and LegalWills.co.uk you can create your Will in a matter of minutes, from the comfort of your home at a fraction of the cost of paying for legal advice. It doesn’t make sense to procrastinate when you can have peace of mind by the end of the day today.