Baby Boomers lead very busy lives and there never seems to be a good time to undertake estate planning but the time is now! According to a BMO study, boomers will inherit over $1 trillion over the next 20 years yet almost half of all Canadians don’t have a Will, and much fewer have a complete estate plan. Every adult needs a will. So, there is no better time than the present to push this item to the top of your “to do” list. Making your will and estate planning is not as complicated, time consuming or scary as most Boomers think.
What is an estate plan? The foundational piece is a Will; however, a modern estate plan requires additional components. I recommend that most of my clients create three legal documents as part of their plan: 1) a Will; 2) a Power of Attorney; and 3) a Representative Agreement (or Health Directive).
Wills and Estate Plans
A Will is a written document which details how you want your property distributed after your death. A Will ensures that your wishes are carried out with a minimum of expense and delay.
If you choose not to make a Will, your property will be dealt with in accordance with the Wills, Estates and Succession Act (B.C.) (“WESA”). Without a Will, the Court will appoint a “personal representative” to manage your affairs. . This person will have limited discretion in how to deal with your estate, and the Court will not know your intentions. If you have young children, without a Will, you will not be able to choose a guardian for your minor children. Also, the provisions of WESA will stipulate who the beneficiaries of your estate are.
Some people choose to make their own will but there are problems inherent with all of the “do it yourself” products if you have anything but very simple will-making needs. It’s been said that there is no such thing as a simple will, and my practice reflects this in that I have yet to meet a family that does not have some unique circumstance that requires specific consideration in their wills. Using the services of a lawyer will help ensure that your Will is flexible enough to plan for possible changes in your situation and the law, that immature or young adults don’t inherit too much, too soon, and that dependent or vulnerable beneficiaries are provided for. Legal services also offer valuable counsel to ensure that you understand your obligations under B.C. law to provide for your loved ones in your Will.
Once you have a Will, you should update it from time to time as your circumstances change and I recommend that you review your will every 3 to 5 years.
Power of Attorney and Estate Plans
A Power of Attorney is a document authorizing another person (called your “Attorney – not to be confused with your lawyer) to help you manage your legal and personal affairs while you are still alive. The Power of Attorney can take effect immediately or only when you lose the ability to manage your affairs and it ends upon your death. The powers associated with it can be narrow or broad but cannot be used to appoint a representative to manage your personal care or health care decisions.
Representative Agreement and Estate Plans
Similar to a Power of Attorney, a Representation Agreement authorizes an individual to be your “Representative” to help you manage your personal care and health care decisions in case of illness, injury, or disability. A Representation Agreement is the only way you can appoint someone to assist you or to act on your behalf for health care and personal care matters and this authority ends upon your death.
If you do not have a Power of attorney and a Representation Agreement in place, and you lack the mental capacity to make decisions regarding your financial and personal affairs, the Adult Guardianship & Trustee Act authorizes the Court to appoint a person to do so on your behalf. The result may not be in line with your wishes and may be significantly more complicated and expensive for you than working with a lawyer in advance, to prepare and put these legal documents in place.
Don’t wait until it’s too late to get your estate in order. Planning ahead makes sure your affairs are handled the way you wish and makes everything easier for your family and loved ones and saves them time, money, and stress when dealing with your affairs. Everyone’s life is unique and everyone’s circumstances are different. All the unique aspects of you, your family and your assets need to be carefully examined and considered during your planning process. It’s important for Boomers to get the help they need from their financial advisor, accountant and lawyer to build a comprehensive and effective estate plan.
Time to finally put your Will, Power of Attorney and Representation Agreement to the top of your “to do” list.The information provided above is for educational purposes only. This information is not intended to replace the advice of a lawyer or address specific situations. Your personal situation should be discussed with a lawyer. If you have any questions or concerns, contact a legal professional. [jetpack-related-posts]