Is it possible to make a will like in the movies? Disinherit your child or impose conditions on them to get our savings after we die?
Jocelyne*, 61, learned a few months ago that she suffered from a rare disease. She is on indefinite leave from work and lives on 75% of her salary. To his great relief, this amount is covered by his new employer’s salary insurance. Jocelyne had been in office since 2022 and thought she would make it until retirement.
“I was planning to take my pension at 65, but I may not be able to wait until then,” writes this single woman who has two sons in their thirties. I will have my real prognosis in a few weeks. »
Although she contributes to this new defined benefit pension plan, she will not be able to count on this pension.
His annual salary is $67,000. “I spend what I earn pretty much all the time,” she says, estimating her cost of living at $35,000 a year. At a time when rent prices are destroying budgets, Jocelyne lives alone in a housing cooperative and pays a reasonable $731 per month.
But if Jocelyn learns that she must stop working for good because of her illness, will she have enough money to live on?
His other worry is his two sons. They did not follow the path she had imagined for them.
Which leads him to want to redo his will. “My youngest son hasn’t spoken to me for a long time, so I want to remove him from the will,” says Jocelyne, adamantly.
“My oldest has substance abuse problems and mental illness,” she continues. Before he can collect his inheritance, I would like to force him to be sober for a certain period of time in addition to requiring him to see a psychiatrist for a certain period of time. »
Is it possible to include these types of conditions in a will?
“What do you suggest? »
Salary: $67,000
QPP estimated at age 65: $1,153
CRI : 439 879,23 $
FAMILY: $13,398.23
TFSA: none
Rent: $731/month
Credit card debt: $6,000
Annual living cost: $35,000
Charles Rioux Rousseau, advisor, development and quality of practice at the Quebec Institute of Financial Planning (IQPF), looked into Jocelyne’s case.
Let’s first resolve the first issue, that of retirement planning and disability.
“A question we often ask ourselves is that of life expectancy and the appropriate time to take pensions from the two governments,” notes the expert.
Regarding the supplemental retirement plan of his current employer, there are many uncertain elements, observes Charles Rioux Rousseau. Will she return to work? If the answer is negative, will she choose to continue contributing?
“When you have disability insurance, you are not required to contribute to the retirement plan. On the other hand, when we do it, it counts in the years of service which are used in the calculation of the pension,” indicates the planner.
In order to check whether Jocelyne will be able to ensure an indexed annual cost of living of $35,000, Charles Rioux Rousseau took a pessimistic scenario, namely that she will be disabled until age 65. From this age, she will begin to disburse her CRI, her RRSP and use her government pensions. “I didn’t consider his current employer’s retirement plan,” he says.
“I did not take into account the tax credits she could obtain such as those for medical expenses or home support. So his financial situation will surely be rosier. »
When she retires, Jocelyne will have to withdraw a minimum amount each year from her locked-in retirement account (CRI). However, she will not have the right to withdraw more than the maximum amount authorized. However, if a person has a reduced life expectancy or a major disability, they can request that the CRI no longer be immobilized.
But before thinking about retirement, Charles Rioux Rousseau advises Jocelyne to pay off her credit cards as quickly as possible, which generate exorbitant interest charges.
According to the financial planner’s calculations, if Jocelyn died at age 80, she would leave $250,000. But how can you ensure that the will exactly respects your last wishes?
“Bequeathing property and money with conditions can become very complicated,” says the financial planner. If the will is not drawn up correctly, we may find ourselves ensuring that the money is given to the youngest son whom Madame precisely wanted to disinherit. »
Because if the oldest son dies, for example, and there are no other heirs, the rules of legal inheritance will apply and all the money will ultimately go to the one the mother wanted to exclude from the will .
For this legal portion, Francis Langlois, notary and mediator, associate of the firm Vos Notaires, Hotte, Langlois et Lalli, joined the analysis of the file.
“In order to really prevent the money from going to your youngest son, it is imperative to designate someone in your will. By someone, I mean a natural person or a foundation, an organization,” explains Francis Langlois.
“It is possible to make conditional bequests, but not of this type,” says the notary, “because the fulfillment of such a condition is arbitrary for everyone. We do not impose a choice of life or value for the future, under penalty of nullity, because it is a purely personal character. »
The will would then not be valid.
Conditions such as not remarrying or leaving a religious sect have also been rejected by the courts.
The best vehicle for maintaining administration over one’s property following one’s death is a testamentary trust.
“It’s not as complicated as you think,” assures Francis Langlois, who compares the trust to a bank account kept for the heir, but managed by a signatory other than the heir.
In other words, Jocelyne would bequeath her property “for” her son and not “to” her son, specifies the notary. “It’s protected money. You will have to find the right person who will be able to manage it with the same rigor, but also with the same openness and the same understanding that you would have had for your beneficiary son. »
“There can’t be any far-fetched conditions. On the other hand, we can express our wish or our wishes as to the way in which we want the money to be administered,” underlines Francis Langlois.
It is the notary who will be able to draw up the conditions that suit Jocelyne.
