Listing your assets
So no one has to play detective
Do you have the skills of a detective?
If so, you could have put these skills to work as a liquidator for numerous Quebec wills over the past few decades.
Today, we find it funny that, half a century ago, our ancestors stashed their precious bank notes around the house, in the barn or in the tool shed in case of hard times—hiding places that were eventually discovered only after their death. While the proverbial sock under the mattress is rarely heard of anymore, the places where our assets and liabilities are hidden have multiplied.
We no longer have just one credit card but five, two savings accounts, chequing accounts with three different financial institutions (one next to the plant where we used to work, another in the town where we were born and still another close to where we now live), a safety deposit box, two RRSPs, two investment accounts, a few thousand dollars invested in laboursponsored funds, both term and whole life insurance, a loan to a sister, not to mention a half-paid mortgage on rental property.
And what if, tomorrow, someone had to liquidate your assets to disburse the money due to your heirs? How would he proceed? How would he find out about all your assets and debts? How would he know where to locate the safety deposit box opened by the key he found in your dresser drawer?
He would do the research, of course, but settling your estate would be an arduous process and your loved ones would have to wait a long time before receiving the money you left them. But what if the insurance policy you paid into every year until age 65 is never found? And who knows that you have a substantial personal debt?
Without all this information, it will be difficult for your heirs to evaluate the value of what you have left to them. In fact, if they know about the sizeable amount you owe, they might decide it was is their best interest to refuse the legacy left to them.
The wealth inventory
All these problems can be avoided in one easy and effective step: by drawing up a list of your assets and liabilities.
An inventory of the various elements that comprise your wealth will include information such as the location of your assets and investments: where you have bank accounts, your credit card issuers, your broker, where your bonds are kept, information about 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 have a serious accident. The notary keeps the original copy of the inventory 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 circumstances. The value of the wealth bequeathed as well as the financial products of which it is composed—as well as their location—often changes quickly as we near retirement.
The inventory is an instrument that closely reflects 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 following a fire or other disaster.
In March 2004, the Chambre des notaires du Québec conducted a survey on wealth inventories and found that the public was receptive to the idea: 94% of respondents agreed that it is important to know where their assets and liabilities are in the event of death or serious accident, while 44% said they were ready to compile this inventory with a notary immediately!
Armed with a wealth inventory, a liquidator will no longer experience the stress that can result from trying to piece together the financial puzzle of someone's life. The wealth inventory is a great idea.