You should test your will before you need it. You don’t have to die to test it.
If airlines want to teach pilots how to deal with emergencies, they do not do it in an airplane. They are too expensive if the pilot is a slow learner. They use a flight simulator. A bird strike, a cargo hold door blew off, a lightning strike, the landing gear won’t deploy, the rudder stopped operating are examples. They can even simulate the look of an approach to an airport the pilot has not previously visited. Back in the 90s, the approach to Kai Tak in Hong Kong was amusing.
People use visualization to help with situations they deem to be important and difficult. The drive over water on the 5th hole. A dinner date. A job interview. A sales presentation. People use visualization because it helps them. They can work out some of the incongruities in their presentation. I can recall sitting in a chair with my eyes closed imagining basketball foul shots. Set up, feet, body posture, feel the ball, see shot angle, distance, and follow through. The amazing part was sometimes they did not go in. Your brain is a powerful tool.
Like a producer on Broadway, rehearse before the opening.
You should test your will because of risk. There is no risk to any action that is reversible at a reasonable price. Bought the wrong car. Get another one. Wrong house. Move. Wrong job. Quit. No real risk there. Have children. Hard to reverse. Sell a house. Might not be able to get it back. Consider reversibility as a risk reducing aspect of any decision.
Your last will and testament is exactly that. The last one. There are no do-overs, even it is clearly inept. No reversibility is serious risk.
With a little help it is not all that difficult to rehearse.
Start with a net worth statement. What you own and what you owe.
Have your accountant help you with the tax cost base of the assets and give you some ideas about how much income tax your executors are facing. Add in the terms of the liabilities and contingent liabilities like bank guarantees and some limited partnership units.
List all estate costs, from the funeral, to the executor and legal fees, to the probate court costs.
List any specific cash bequests like to charities or specific heirs.
Ask yourself what would happen if a specific assets is left to an heir and at the time of your death, you did not own it. That is a common reason to litigate an estate.
Check the division of assets as set out in the will and see if it works for you. Did the right people get the right assets, in the right quantity, and in the right form?
Form matters. Do you want to require some of the heirs to buy out interests in assets that matter to them? Businesses, cottages, farms and so on are difficult legacies if there is further negotiation to settle. Should some be in a trust?
The most common “form” problem is liquidity. Executors need cash to pay bills, taxes and liabilities. They need more for charitable bequests and to equalize the shares. Have you made appropriate provision for cash or have you forced them to borrow or sell assets into an unknown market situation? Would that affect how fair the final distribution is?
Like sports, you learn by practice and you adjust based on what you find. Use your will simulator to see what will happen. Change what you must and keep it up to date. Look for what your estate means to your executor and to your heirs. Make it easier for them, they will appreciate your trouble.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org 866-285-7772