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Successions and wills

Will: the wealth inventory

Half a century ago, we may have laughed at our elders’ hiding places around the house, barn, or tool shed where they stashed their precious bank notes in case of hard times—hiding places eventually discovered one by one after their deaths—but the situation is no longer amusing. While the proverbial sock under the mattress is rarely heard of anymore, the places where our assets and liabilities are hidden away have multiplied.

We no longer have just one credit card but five cards, two savings accounts and three chequing accounts with three different financial institutions (one next to the factory where we used to work, another in the town where we were born, and one close to where we now live), a safety-deposit box, two RRSPs, two investment accounts, a few thousand dollars invested in labour-sponsored funds, both term and whole life insurance, a loan to a sister, not to mention a half-paid hypothec/mortgage on rental property.

And what if tomorrow, someone were responsible for liquidating your assets to disburse amounts due to your heirs? How would he proceed? How would he find out about all those assets and debts? How would he know the name of the institution corresponding to the safety-deposit box key found at the bottom of your dresser drawer?

The search would be made, of course, but settling your succession would take a long time, preventing your loved ones from quickly receiving the amounts provided for them. But what if that insurance policy you sank your money into every year until age 65 is never found? Who knows about the substantial personal debt you owe to another person?

Without all this information, it will be difficult for your heirs to evaluate the residual value of what you have left to them. In fact, if they had known about the sizeable amount you owed, they might have felt it was in their best interest to refuse the legacy left to them.

All these problems can be avoided in one easy and effective step: by drawing up a list of your assets and liabilities.

Making an inventory of the various elements that make up our wealth will focus in particular on the location of our assets and investments: where we have bank accounts, credit card issuers, who is our broker, where our bonds are kept, information about hypothecs/mortgages and personal loans, etc.

Ideally, this inventory should be drawn up before a notary at the same time as a will and a mandate in case of incapacity, since these documents are complementary and are used by the liquidator of our succession or our legal representative should we become ill or suffer a serious accident.

The notary keeps the original copy of the inventory at his or her firm and records it in a register at the Chambre des notaires du Québec. This makes it easier for the liquidator or legal representative to find it at a later date.

Obviously, the inventory must be updated periodically to reflect new financial realities. The value of the wealth bequeathed and the financial products of which it is composed—as well as their location—often change extremely quickly in the latter part of our working lives.

The inventory is an instrument closely matching the reality of today’s families, as it could also be used to redistribute wealth after separation or divorce. Moreover, it can prove useful in the event of an insurance claim, fire or other catastrophe.