Aside

Keeping up to date with Estate Planning laws

This week in Canada, the Province of British Columbia enacted new laws for the preparation of Wills. The changes were described by some as “sweeping” and the “most significant update in the law for decades”. In reality though, there were only two meaningful changes for service providers like us. Firstly, it lowered the eligible age for preparing a Will from 19 to 16, and secondly it changed the law that automatically revoked a Will on marriage. I’m not quite sure why there was pressure to lower the eligible age; I know that the number of teenagers preparing a Will using our service is very, very low (we’ve had one this year according to our statistics). But the revoking on marriage certainly makes sense. Tragic as it may be, newlyweds can be involved in fatal accidents, and it doesn’t seem right that their Will would be voided because there hadn’t been an opportunity to make the update.Changes Coming

Many lawyers will cite changes in the law as a reason to avoid preparing your own Will, but of course, our services are always kept up-to-date. It does however make for an interesting challenge. Our service covers every State in the US (except Louisiana), every Province in Canada (except Quebec) and the UK (England and Wales only). This gives us over 60 different jurisdictions that have to be monitored. Most of the changes to estate planning law impact people who have not made a Will, and also the Execution of that Will. For example, the new BC law encourages the courts to try and figure out what the testator really meant in their Will, rather than have the estate tripped up on a technicality. The distribution of the estate for somebody who doesn’t have a Will was also changed in the new law, but we would hope that nobody would leave their estate distribution to the vagaries of intestate law and take the decisions into their own hands.

But it means that if you pick up a blank form kit in BC, there is a chance that it may now be invalidated because of the new law. Certainly, any help text associated with that kit would most likely be wrong. You also have to be very careful when using an online service and maybe even request information from the service provider on when they most recently had an update to the service. At LegalWills.ca, USLegalWills.com and LegalWills.co.uk we are diligent about monitoring estate planning laws across all jurisdictions, but other services may have gone online years ago and never been touched.

However, don’t let law changes scare you away from preparing your own Will, certainly at LegalWills.ca, USLegalWills.com and LegalWills.co.uk you can be assured that any change in the law will be reflected in our services on the day of the change.

 

 

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Six ways the law is a hundred years out of date

DPRI-1-1706-M1_fullwilllargeAs the owner of a company that allows people to prepare their own Will – online, at any time, there are many services we would love to add, but are continually stymied by a law that fundamentally hasn’t changed in centuries. We live in a smartphone, biometric, social World which is entirely ignored by our legal system. Which would be fine if our current system worked, but it is horribly inefficient and open to fraud and exploitation. Given the gaping holes in the way our Wills law works today you would think that lawmakers would be jumping all over new technology to make the system work. Here are just a few ways that the head-in-the-sand approach comes up short;

1. A Will must be printed on a piece of paper;
Today we have video, digital assets, countless online social activity and the only way a Will can be valid is if it’s printed on a piece of paper. an “innovation” that’s been around for a couple of thousand years. The most obvious shortcomings of paper are that it burns easily, doesn’t stand up to flooding very well, is very difficult to find, not secure, easy to forge, and is not easy to update. The single most common question we receive at LegalWills is “my Dad has just passed away, and I know he had a Will, how can we find it?”. It would be relatively easy for us to have an online repository of Wills encrypted with digital signatures and made available to Executors exactly when they are required. Unfortunately the law doesn’t allow for this and currently the only legal document is on a piece of paper – lost, burned, or blown away in a hurricane.

2. A Will must be signed by a handwritten signature
This is perhaps the most ridiculous shortcoming of our existing laws. A scrawled signature is currently the only way of proving that a Will belongs to the person making the Will. Which leads to cases like this , where somebody has to call in a “handwriting expert” to validate the Will because “There are four signatures on it and none of them actually look like any of his signatures.” We sign into our phones with fingerprints, and biometric data. My smartphone uses face recognition to log me in. I can buy a door handle on Amazon that uses “subdermal fingerprint scan technology”, yet according to the law, my entire estate is protected by a chicken scratch signature. You then end up with multi-million dollar properties being contested because claimants “maintain that it is fake and <the testator> never made one”. Or people like this former police officer who “has admitted fraud over a will said to belong to his dead father.” His Dad didn’t have a Will, his son typed one up and passed it off as his Dad’s. Granted, he was caught, but for every one of these there are thousands of fraudulent Wills being presented as originals.

3. The inclusion of digital assets
Lawyers are starting to acknowledge the importance of digital assets, but have yet to come up with a secure, convenient way to tie these together with a printed Will. Generally speaking it’s a really bad idea to include your Facebook account information in your Will (Wills are public record once you pass away), but online accounts can have significant value. Domain names are still sold for tens of thousands of dollars. PaddyPower, PayPal, Bitcoin, WordPress accounts can be worth a lot of money. And of course, families may end up fighting over Flickr, Picassa, Facebook and iTunes accounts, so they should really have a named beneficiary.

4. Global assets
We live in a very mobile World and people hold assets in multiple jurisdictions, and indeed in some cases may not even know which jurisdiction the assets are held in. If I own $500k in Bitcoin currency, is this subject to inheritance taxes of any country? what if I live part of the year in the UK, part of the year in Dubai, and have a house in Florida and have a PartyPoker account? I recently read this article about differences between English and Scottish law which explains “The EU has very recently introduced new rules to help clarify the position in complicated situations, where the law of two or more EU countries could apply. From August 2015, most EU citizens will be able to choose whether the law applicable …should be under the rules determined by the country of their residence or the country of their nationality. However, the United Kingdom has chosen to opt out of these regulations.” In other words the UK has opted out of a law that will come into effect in two years time that will solve a 50 year old problem. Good luck finding resolution to the issues of today’s digital assets.

5. The cost of a lawyer
Lawyers continue to overcharge for their services. In most cases a lawyer will have a client complete a blank form, put the information into some software and generate a standard boilerplate Will. And then charge $600 or £400. Not in every case of course, but a lawyer should be able to say to a client “you know, that was a really simple Will, let’s call it $25” but it won’t happen. We’ve had people come to us having been quoted $1,200 for a Will. It’s just out of touch with reality, especially as Wills should be reviewed at least annually and updated regularly.

6. Using the services of a lawyer
We can automate and “app-ify” many things today. Online and smartphone applications are breaking new ground daily and it not difficult to conclude that if Intuit can build TurboTax for business, it is not much of a stretch to address everybody’s estate planning needs with self service tools. At LegalWills.ca, LegalWills.co.uk and USLegalWills.com we provide a service that works for about eighty percent of people, and we direct people to legal professionals for anything complicated. But it is well within our technical capabilities to provide an online tool that works for 99.9% of the population, probably more effectively that the legal profession. A Will is something that everybody should have, access to a lawyer should not be a roadblock to preparing a Will.

What exactly is a Last Will and Testament?

One of the most common questions we receive at LegalWills is “do I need a lawyer’s stamp or something to make my Will a legal document?”. The easiest way to answer this question is to look at the legal statutes that define exactly what makes a random document an actual Will. Let’s take one from each country in which LegalWills operates;

In Ontario; the Succession Law Reform Act requires that “A will is valid only when it is in writing”. It then goes on to say a will is not valid unless,

(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction;
(b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and
(c) two or more of the attesting witnesses subscribe the will in the presence of the testator.

There are a few subtle qualifiers to this, for example, a member of the forces on active service is not required to have two witnesses, nor does a Will that is written entirely in one’s own handwriting – which is a useful provision for people stuck under a rock, but not advisable for anybody else. There is also some restriction on who can serve as a witness in that they must have no vested interested in the contents of the Will. There is no mention in the law of requiring the services of a lawyer, or notary to make the document legal. The law however does not allow for video Wills, a Will that is sung, or any other modern digital interpretations.

The UK Wills Act not surprisingly, has very similar provisions and the signing requirement are almost identical. But more jurisdictions are now accepting “intent” rather than strict compliance with the law. In California they have a “harmless error” provision that states

The will shall be treated as if it was executed in compliance with that paragraph if the proponent of the will establishes by clear and convincing evidence that, at the time the testator signed the will, the testator intended the will to constitute the testator’s will.

More a more jurisdictions are changing their laws to state that the intent of the Will-maker supersedes the formal requirements of a Will. For example, in BC recently section 80 was updated to include;

If a will was not executed in compliance with paragraph (1), the will shall be treated as if it was executed in compliance with that paragraph if the proponent of the will establishes by clear and convincing evidence that, at the time the testator signed the will, the testator intended the will to constitute the testator’s will.

What does all of this mean? the implications can be seen in this recent news article from Australia. “A Will typed into an iPhone ‘Notes’ app has been declared legally valid by the Supreme Court in Brisbane in a landmark legal ruling. In what may be a legal first in Queensland, and possibly Australia, the Supreme Court ruled that the will typed into the smartphone but not written out or signed would stand.” The article goes on to say “Although the will was not witnessed the court found it had been created on the iPhone by the man with the clear intention of it being legal and operative”.

Of course, we wouldn’t recommend testing the limits of the legal system to see which forms of Will would be acceptable, however, it is clear that there is no need to be intimated by the process of writing your Will. Services like those at LegalWills.ca, LegalWills.co.uk and USLegalWills.com offer a structured service to prepare your own Will. It relies on established legal precedents to create a Will identical to one prepared by a lawyer. We wouldn’t recommend writing a Will on a post-it note, but there is nothing to be afraid of when using a service like ours to prepare your own Will.

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.

Intangible assets and your Last Will and Testament

There is a great deal of discussion on the internet about digital assets and how they should be included in one’s Will. We have discussed it in previous blog articles and included a range of examples to demonstrate how wide-reaching the concept really is. There are of course online accounts that need to be closed down; Twitter, LinkedIn, Pinterest, but then there are the accounts that may have some sentimental value; Flickr, Instagram, Facebook. Equally importantly though are the accounts that have serious financial value; PayPal, Blogger, GoDaddy, PartyPoker. Beyond that are the  digital assets that should have some material value; iTunes, Amazon collections, Google Play.

It is a really complicated business because the straightforward approach to these “assets” is to simply store one’s User ID and Password in a safe place available to the Executor of one’s Will. But there still needs to be a beneficiary of the asset. If I have a prestige domain name registered in my name, then it is a simple task for the Executor to log into my GoDaddy account and then transfer the domain name to a beneficiary, but I need to make it known who the beneficiary should be. And for the purposes of tax reporting, the Executor needs to know the value of that domain name.

It has been well reported that iTunes do not allow your purchases to be passed on to a beneficiary. The actor Bruce Willis was prepared to take Apple to court over his right to bequeath his music collection. PayPal on the other hand, does have a clear (albeit convoluted) policy which includes faxing in a death certificate, Will, diver’s license etc.

 

But there are other material assets that are not regarded as “digital,” and the confusing status of these was highlighted by a great article from a couple of weeks back. What about airmiles, frequent flyer points, and other loyalty rewards? It turns out that five of 12 U.S. airlines — Delta, Hawaiian, JetBlue, Southwest and Spirit — do not allow miles or points to be transferred to beneficiaries. Four of 15 hotel companies surveyed — Choice, Omni, Red Roof and Shilo — don’t allow points to transfer. But most simply don’t have a policy. Virgin America, for example, doesn’t have “a formal published policy,” spokeswoman Abby Lunardini says, but transfers a decedent’s reward points to a beneficiary or family member on “a case-by-case basis.” Marriott says a decedent’s points can be transferred only to a spouse or domestic partner, while Hyatt says points can only be transferred to a person with the “same residential mailing address” as the decedent……what?!?

I don’t think it is nitpicking though, these assets can genuinely be worth tens of thousands of dollars.

For now we would recommend making sure that your passwords and User ID’s are kept somewhere safe, and somewhere that is accessible to your Executor. You should consider using a tool like MyLifeLocker to organize and describe your assets. And you should be comfortable listing specific accounts to go to specific beneficiaries in your Will. With a service like LegalWills.ca, USLegalWills.com and LegalWills.co.uk this is a very simple process.

5 good reasons to write your own Will rather than see a lawyer

I need to preface this article by clarifying what I mean by writing your own Will. I do not mean sitting down with a blank piece of paper, and I do not mean using a blank form kit that you may buy from a bookstore. Either of these approaches is an absolutely terrible idea. No, I’m talking about using interactive software like the tools offered at LegalWills.ca, USLegalWills.com and LegalWills.co.uk. These services protect you from making the mistakes inherent within a blank form kit – like writing something in your Will that is not permitted by law, or not covering all possible situations. In fact, these services are now so good, that they are not just an option “if you cannot afford a lawyer”. They actually have some significant benefits over using a legal professional to prepare your Will.

You will actually get it done
Over 60% of adults don’t have a Will in place, and many complain that it’s the effort of booking an appointment with a lawyer that presents the most significant barrier. Many of our customers use LegalWills because they have procrastinated and they are leaving on a trip, or going into surgery and explain to us that they need “something” in place, and they’ll then get a “proper Will” written some time in the future. One of two things then happens; they either don’t ever get around to preparing the “proper one”, or alternatively, they eventually make an appointment with their lawyer, pay $600 and then find that their new Will is the same as the one prepared at LegalWills. When I say “the same”, I mean identical, word-for-word, exactly the same. The lawyer uses the same software that we use, so the two documents are indistinguishable from each other.

Future-proofing
Another significant barrier to preparing a Will is the notion that you would only write it once in your lifetime. After all, for $600 you’d expect it to be good for at least a few years. Unfortunately though, a Will lasts as long as there are no changes in the circumstance of anybody named in the Will. If your alternate Executor moves abroad, it’s probably a good idea to update your Will. Or supposing a charity comes into your life and you wish to recognize them in a bequest, you may want to update your Will. Unfortunately, with a lawyer it means booking another appointment and paying another $600 each time. With LegalWills you simply login, make the change and print out a new Will. It takes 10 minutes and costs nothing.

Educational
You may be the type of person who actually wants to learn about something as important as your Will. Unfortunately most lawyers do not have the time or inclination to step you through every clause in your Will and explain to you the implications of each sentence. Using a service like the one offered at LegalWills you are able to create your Will at your own pace and read as much or as little as you need to in order to educate yourself. Every page and every decision comes with accompanying help text so you will actually understand your Will and the decisions that were made to create your document. Most people who use our service actually feel empowered after preparing their own Will and completely understand the contents.

Private
There may be details to be included in your Will that you may not be willing to share. You may not feel comfortable telling a lawyer that you would like to leave your old school tie to your nephew and a long list of other personal memorabilia. There may be an organization that means a lot to you that you may not wish to share even with a lawyer. Using our service you get to choose exactly what is included in your Will and you needn’t discuss it with anybody if you don’t want to. You can make an update at any time without needing to explain to anybody the trigger for that update. It is truly your own private and personal document.

Affordable
With all of these advantages you’d almost think that the services at LegalWills would be at least as expensive as going to see a lawyer. But ultimately you are preparing your own documents, and you are not receiving legal advice from us. In North America you can prepare your Will at LegalWills.ca and USLegalWills.com for $34.95, at LegalWills.co.uk it costs £24.95.

Preparing your own document using our services is not an option for people who “can’t afford” legal fees. It is an educated choice for people who need to prepare a Will, who want to make updates whenever they need to, who want to learn a little more about the process, and who protect their privacy. Yes, it’s more affordable, and yes, the final document is identical, but there is so much more that comes with a service like ours.

Bleak House and your Last Will and Testament

I was recently reminded of the Charles Dickens novel Bleak House, which centres around the court case Jarndyce and Jarndyce. For those of you unfamiliar with the story; it tells of a legal battle over a large inheritance which is dragged on through the court system. In fact, it continues for generations until the case is finally closed.

as well as he could make out, it was over. Over for the day? we asked him. No, he said, over for good. Over for good! When we heard this unaccountable answer, we looked at one another quite lost in amazement. Could it be possible that the will had set things right at last and that Richard and Ada were going to be rich? It seemed too good to be true. Alas it was! ……”Mr. Kenge,” said Allan, appearing enlightened all in a moment. “Excuse me, our time presses. Do I understand that the whole estate is found to have been absorbed in costs?” “Hem! I believe so,”

The lawyers continued to fight the battle over the inheritance until the whole estate was absorbed in legal fees, at which time, the lawyers all stopped working on the case !! Jarndyce

The novel was written in 1853, in a very different World to the one we live in, but just yesterday I saw that, generations on, the legal profession still works in the same way. The bankruptcy of Nortel has so far racked up $755M in legal fees while the parties argue on how to divide $9B in assets, and after nearly a billion dollars in legal expenses, the proceedings are no closer to a resolution. The lawyers have no vested interest in drawing the case to a close as they can continue to bill $1000 an hour in fees.

So what does this mean for your estate? and how can you minimize your assets ending up in the hands of litigating lawyers?

  • Write your Will, make it clear and unambiguous.
  • Do not use a blank do-it-yourself form from a bookstore
  • Sign it according to the signing requirements in your jurisdiction (usually two witnesses must sign, who have no vested interest in the contents of the Will).
  • Write your Will while you are young enough to have the capacity to understand it.
  • Update your Will as soon as your personal or financial circumstances change.
  • Never make an update to a Will by writing on the document or putting lines through sections. Always prepare a new Will when you want to make a change.
  • If you have very complicated affairs, consider getting legal advice when preparing a Will.

It is a myth that preparing your own Will means that your estate is more likely to face a legal challenge. If you use an interactive online service like the ones offered at LegalWills.ca, USLegalWills.com and LegalWills.co.uk you can create a Will as complete and legal as a Will prepared by a lawyer or solicitor. In fact, if you look at the legal fights over Wills, they are frequently prepared by lawyers and we’ve discussed many in this blog, for example Huguette M. Clark, and Anna Nicole Smith. Often though, problems arise from Wills not being updated properly because circumstances change, and a return to a lawyer’s office is too expensive or inconvenient. This is why many people are turning to online services like those offered by LegalWills because it allows them to prepare the document conveniently, but more importantly, these services allow the users to update their document at any time, as often as they wish. In many ways, the services reduce the likelihood of a legal challenge, and the loss of the entire estate to legal fees.