Wills and Estates
The following is not legal advice and is for informational purposes only
A Will is a testamentary instrument that expresses, among other things, your wishes on how you wish to divide your estate upon your death. Without a will, you leave your family with no means of determining what to do with your money and property. When preparing to do a will, there are several important considerations.
First, you must name an executor or trustee. This is the person you are entrusting to handle the administration of your estate. He or she can be your spouse, adult child, other relative, friend, financial institution or your solicitor. The executor or trustee has a great deal of responsibility and as such, they are entitled to a certain amount of compensation, which you may specify in your Will. It is also important to have a good idea of what assets you own, which will assist your lawyer in crafting a will that ensures that your assets are transferred to the people or organizations that you wish to benefit in the right proportions. It will also help your lawyer to know which assets are considered “estate assets” and which are not. For instance, registered bank accounts, such as GICs and TFSAs, with a named beneficiary are not covered by your Will, since they are transferred to the beneficiary on your death. The assets that are dealt with in your will form the basis on your estate. If you have specific items, such as collections or family heirlooms, you can make a reference in your Will to a memorandum of person items, which will allow you the flexibility to change and update the list over time, without the need to change your Will.
When making a Will, you will need to carefully consider how you want your property divided. Clear and simple instructions are best, to avoid ambiguity and the potential for your wishes not to be fulfilled. The most common scenario is an individual with a spouse and children, where the testator leaves the entirety of their estate to their spouse and if their spouse passes away first, then the estate is divided among the children. While this is the most typical situation, a Will can be tailored to your specific needs.
Your will also contains a long list of the trustee or executor’s administrative powers, which are far reaching. They have the power to do almost everything necessary to carry out the administrator of your estate. It is important to note that unless you say otherwise, money or property left to a beneficiary under your will does not pass to their spouse if the beneficiary has already passed away. Similarly, money or property left to a beneficiary is excluded for the purposes of property division if that beneficiary later gets divorced.
There are certain requirements, both in terms of form and content, to make a Will effective. While we always recommend that you have a lawyer prepare a Will for you, it is not a requirement. If you choose to make a handwritten will, also known as a holographic will, it is crucial that you sign and date it before a witness who can attest to your capacity to sign. The witness cannot be your executor and should not be a beneficiary under your Will.
You may revoke your Will at any time, as long as you have legal capacity. You can do this with a lawyer by signing a revocation or by making a new Will, or by simply by signing and dating a hand-written note to that effect, which must also be signed by a witness.
Powers of Attorney
When making a Will, it is also a good time to consider doing Powers of Attorney (PoA). A Power of Attorney is a useful legal tool, which can only be used while you are alive. The general purpose of a PoA is to allow a person of your choosing (your ‘attorney’) to make decisions in your place.
There are two types of Powers of Attorney: Property and Personal Care.
A Power of Attorney for property is used to manage all of one’s property, which can include personal possessions, bank account, investments and real estate. The person that you name to make decisions in your place can do almost anything that you can do, including paying bills, opening and closing bank accounts, filing tax returns, transferring funds, purchasing or selling a house. The Power of Attorney may not make or revoke your Will.
When making a Power of Attorney, you have the option to place restrictions on its use. The most common restriction is to require a note from a doctor confirming that you need assistance with your day to day affairs prior to the PoA being activated. It can also be restricted to a single use, for example if you are selling your home while you are out of the country. It can also be made without restriction, in which case, the PoA can be used by your named attorney immediately after you sign.
A Power of Attorney for personal care is used in relation to your health care decisions. The person that you name is responsible for making medical decisions in the event that you become incapacitated. Your attorney would be able to speak to your health care professionals and select your course of treatment and whether or not to employ life saving measures. Unlike a Power of Attorney for property, a PoA for personal care is restricted by law, such that it can only be used once a doctor has determined that you are incapable of making decisions for yourself. The threshold for its use is much higher than for the use of a restricted PoA for property.
You have the option to include any care instructions to help guide your attorney, which many people refer to as a “Living Will,” and forms part of the PoA document. It is important for you to discuss your health care wishes with your Power of Attorney to assist them if ever the PoA is required. When selecting your Power of Attorney, it is important to consider their proximity to you, given that health care decisions are often very time sensitive.
Naming a Power of Attorney
It is always recommended that a lawyer prepare the documents to ensure that they are done correctly. The lawyer will also assess the capacity of the donor (person making the Power of Attorney), since you must have the capacity to sign the Power of Attorney for it to have legal effect.
There are also options when it comes to how many attorneys you choose and whether they must agree on any decisions affecting you. For instance, you may choose one single attorney or multiple attorneys. If you opt for more than one, you can decide if they must make decisions together (jointly) or if either one can make a decision alone (jointly and severally). It is a good idea to name an alternate attorney, in the event that the first named attorney is unable to act or has passed away. It is also important to inform your Power of Attorney that you have named them and discuss the responsibility with them.
When choosing your attorney, you should pick someone you trust. Though the exercise of a Power of Attorney is a trust duty and the attorney is legally required to do what they think is best for you, the power can sometimes be abused, particularly among elderly donors of a Power of Attorney.
Another consideration is the age of the attorney you select. While most often people select their spouses as the primary attorney, it is a good idea to pick an alternate who is from a younger generation, like an adult child or another close family member.
You may revoke your Power of Attorney at any time, as long as you are capable. You can do this with your lawyer by signing a revocation or by making a new PoA, or my simply by signing and dating a hand-written note to that effect, which must also be signed by a witness.
Whether you are thinking of making a Will and/or Power of Attorney or updating your current one(s), please contact our office today to set up a free, no obligation appointment to discuss your needs.
The loss of a loved of a one or friend is devastating. The process is made that much more difficult by the inevitable legal realities of dealing with that person’s estate. If you are named as an Estate Trustee or Executor in someone’s will and they pass away, you are legally responsible for all aspects of the administration of the estate.
After the funeral, the first step is to locate the will. Original wills are commonly stored at the drafting lawyer’s office. When that lawyer dies or retires, his or her wills are then stored with another firm and you may have to hunt around. If the deceased had the original will in their possession, the lawyer who drew it up should have a signed receipt confirming it was picked up. In that case, you will need to search through their belongings to find it.
When obtaining an original will from a lawyer’s office, you should call ahead to arrange pick up, bringing with you a piece of government issued photo identification (to prove that you are the Executor) and an original death certificate (to prove that the deceased actually died).
At this point, it is recommended that you seek legal advice. You can retain the lawyer of your choosing and not necessarily the drafting lawyer. The lawyer will assist you throughout the process, which is rather slow. Beneficiaries should expect to wait at least a year to receive their inheritance, depending on whether an Application for a Certificate of Appointment of Estate Trustee With a Will (formerly known as ‘probate’) is required.
One of the major initial steps in the administration of the estate is determining the value of all accounts as of the date of death and collapsing the investments and bank accounts into an estate account. It is important to know that as estate trustee, it is possible that you will deal with both estate and non-estate assets. For example, registered bank accounts, such as GICs and TFSAs, with a named beneficiary are not estate assets, but you will still be responsible for transferring those funds directly to the beneficiary. In addition, bank accounts held jointly with a right of survivorship do not form part of the estate, at least for the purposes of applying for a Certificate of Appointment. As an example, many elderly people choose to add a son or daughter to their bank accounts for simplicity and to assist with paying bills. However, it is presumed that the contents of the account are intended to be part of the estate for the purposes of division
Beyond the above, your other responsibilities as a Trustee may include arranging the funeral, writing an obituary, cancelling the deceased’s subscriptions and services, applying for a Certificate of Appointment and paying the Estate Administration Tax, determining the value of all accounts as of the date of death and collapsing all investments and bank accounts into an estate account, filing an Estate Information Return, advertising for creditors, selling real property, paying all debts, filing tax returns, holding back any taxes owing to Canada Revenue Agency, obtaining a Clearance Certificate, providing an accounting to the residual beneficiaries (those beneficiaries who will share in the ‘residue’), obtaining signed releases from those beneficiaries and ultimately, disbursing funds to the beneficiaries.
If you are the Executor or Trustee of an estate and you require assistance, please contact me today for a free, no obligation appointment to discuss your needs.