Thursday, November 19, 2009

When you die, what will happen to your hockey cards?

If you are a long-term planner, you might have already formally decreed your wishes so the government will not be the one dividing up your hockey cards among your friends. For the rest of us, single or married, young or young at heart, is going to the trouble and expense of making a will worth it?

Recently, the Globe and Mail did a quick online plug for the law profession on why we need a will. They said: "When you get married, you become financially tied to another human being. At this point, people consider buying life, as well as critical illness and disability, insurance. Honeymooners might also need travel insurance. Writing a will may not be romantic, but it’s a task newlyweds can’t ignore if they want to protect each other in the event of a tragedy." Well, that sounds like there are very grave consequences to not having a will for newly weds and the rest of us. So, I had to get to the bottom of this.

As I further read the article, it did point to some important situations where a will would be helpful in distributing your wealth. For example, if you want to prevent family feuds, if you want your spouse and kids to share your insurance money, or if you want to make sure King's gets some cash and Danny-boy will likely spend it all on a new BMW (OK that was not in the article but it should have been...). Also, if you want to give money to a charity or your alma mater (did I already say that?). According to this article, I gathered that: If YOU want will get a lot of utility in knowing who gets what (i.e. if you want to ice someone out), then a will is for you. If you don't care, let the government (and your family) figure it out when you die. But, is there grave consequences for newly weds if they don't get a will?

Because I don't have a will, I want to know: If I die tonight, what happens? The answer (from what I can tell): my wife get everything in both our names, the government will likely give her the rest. At the very least, a hand written document (some lawyer is surely going to yell at me to saying that), signed and witnessed is one step in the write direction. Having someone carve your wishes in stone is the gold standard and you are improving your changes of making your wishes clear - this is the benefit. The cost is in terms of time (hard to quantify) and the fees (anywhere from $250-$1000). So, weighting the costs and benefits: Is it worth it? When you are lying in bed ask yourself: Should I pay to save others some grief and to have a say over my stuff when I die?

My view: I think the person who benefits from the will should pay to have it done. If they don't want the trouble, they might very well pay for you to write it up. It seems to me that the benefit to the individual whose stuff will be up for grabs is far less than the benefit to those who have to clean-up the mess once they die, I think I need to start a company called: - if you know what I mean.

So, this holiday season, preferable at the dinner table with everyone around, decide who is going to pay - if your parents don't have a will you might consider making an offer. Of course, you can always ask for that Wendel Clark Rookie Card you have always had your eye on in the process.

Helpful link I used: HERE I am not a lawyer and can't give legal advice, so please take this for what it is: An economist talking about wills.

Tuesday, November 17, 2009

What, so I took a short break ... again

Dear Blog,

Sorry, I have not been givin' you da love. It was not you, it was me. You see, time is costly and the marginal benefit of another post was low.

I have not forgotten you. I will return.