What do you want to happen when you die? Who will inherit your home and pension plan funds, and who gets your coin collection?
Answering these question isn’t anyone’s idea of a pick-me-up. Filling out a will means thinking about your own demise, that of your spouse or partner and even that of your children, if you have any. Usually, the whole process involves seeing a lawyer and shelling out between a few hundred and thousands of dollars, depending on how complex your situation is.
It’s little wonder that survey after survey keeps finding that half or more of Canadians do not have a will.
WATCH: Have you made a will? If the answer is no, here’s why you really should.
But dying without a will can leave a trail of unpaid bills, taxes and courtroom battles behind you for those who survive you. Not to mention that you don’t get a say in who gets what.
Here are just seven examples of what could happen:
Rotten food in your fridge and runaway credit card charges
“Death freezes your assets,” said Edward Olkovich, of Edward Olkovich Law in Toronto. That means that when you pass away, “no one is in charge of your estate.”
Your estate includes what you own, as well as your debts — and getting to both will be a headache for your survivors.
If you’re single, for example, “no one can go into your apartment and empty your fridge,” Olkovich said.
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Meanwhile, interest keeps piling onto your unpaid credit card bills, and there’s no one to pay off that debt.
A judge will have to appoint an executor, someone who will manage your estate, and that can take months, according to Olkovich.
READ MORE: The importance of having a will
Your spouse and children have to move out of the family home
If you didn’t decide how you want your possessions distributed, the government will do so for you according to a standard formula set by provincial laws. Here’s an example.
Let’s say your estate is $500,000, and you are survived by a spouse and two children. If you live in Ontario, the rule is your spouse will get the first $200,000 and a third of whatever is left. That’s a total of $300,000 in this case. The rest is split equally between your kids, who get $100,000 each.
Even if that sounds like more or less what you would have wanted, leaving it up to the government to divvy things up is a very bad idea, Olkovich said.
Suppose, for example, that the $500,000 wasn’t money lying around in some bank account, but the value of your home.
“That $100,000 for each child still has to be paid,” Olkovich said. And might force your spouse to sell the house in order to come up with the cash.
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Your partner gets nothing
If you’re in a common-law relationship, your surviving partner may or may not be entitled to a share of your estate. In several provinces, only married spouses are automatically granted a claim to your inheritance.
The government becomes involved in your children’s personal and financial lives
If you don’t name a guardian for your minor children, the state will act as one. The government will also manage their money until they reach the age of majority, a service that may come with steep fees.
READ MORE: Only 50% of parents have a will, lawyer estimates
A steep tax bill
A will — and the legal advice that usually goes with it — can help you avoid a lot of taxes.
When you die, your legal representative has to file your final tax return to the Canada Revenue Agency (CRA) and pay any tax owed up until the point of death. This includes taxes on some of the assets you owe, such as your car, your cottage and certain types of investments. (You principal residence is a notable exception to this tax.)
The government will tax you as if you’d sold all those assets at market value just before dying. If those assets have increased in market value since you bought them, you’ll be taxed on 50 per cent of that value increase, called capital gain.
However, those taxes are deferred if the assets pass on to a surviving spouse.
READ MORE: Here’s what taxes can do to your savings if you’re not careful
WATCH: Do you really need a will?
Your death sparks a family feud
Any will can be challenged in court. But if you don’t have one, family feuds are almost guaranteed, Olkovich said.
“No one knows who knows what to do, or who gets what. They run to lawyers for advice.”
All your possessions go to someone you barely know — or actively dislike
If you have no immediate family surviving you, provincial law may dictate that your estate go to distant relatives — someone you barely knew or possibly estranged family.
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Low-cost online options
There was a time when the internet was full of websites where you could download and fill out your own will. You’d be presented with a blank form and you’d probably fill it out the wrong way, assuming it was the right document for your jurisdictions, anyway. DIY wills quickly earned a bad rap.
Today, though, there are at least two reputable options that let you do a will from your couch and for only a few bucks.
READ MORE: Nest-egg inequality explains why women need to save more than men
LegalWills.ca has been online since 2003. It operates all over English-speaking Canada and is planning to launch with an English-language website in Quebec next year. (But the company is also working on a French-language service to be rolled out throughout the country, co-founder Tim Hewson told Global News.)
A will costs $39.95, and the site also offers other essential services that allow you to take care of your estate, put someone in charge if you fall into a coma or become otherwise incapacitated, and even write down your wishes for funeral arrangements.
WATCH: Should you pay down the mortgage or save for retirement?
The site is also available in the U.S. and the U.K., which allows for expat wills. That can be handy if you have, say, a condo in Florida or are working abroad but still have assets in Canada.
But perhaps most importantly, LegalWills allows for unlimited free updates to your will, which means you don’t have to pay a lawyer if, say, you have another child or get divorced.
Still, if you’d like to get a legal opinion on your online draft, the site will connect you to a lawyer who’ll review what you have.
Willful is a budding startup with a millennial-friendly look. So far it is only available in Ontario and Alberta, though it has ambitions to expand nationwide.
Users can choose between three packages. There’s the $99 essential plan that will set you up with a last will and testament; a $150 premium option that includes a will and power of attorney; and a $250 offering that’s the premium plan for couples. All options include free unlimited changes.
READ MORE: When saving into an RRSP instead of a TFSA could cost you dearly
Both LegalWills and Willful make it clear that you’ll need to print your will and sign it in the presence of two witnesses for it to be legally binding.
Some remain skeptical of online offerings that promise you can get your will down in 20 minutes or so.
“It takes me an hour if just to explain the law to my clients,” Olkovich said.
But if your family and financial situation aren’t complicated, online platforms are making it harder and harder to come up with an excuse for not having a will.
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