Many of my clients who have met with me recently at my law office in Ottawa have been downright giddy at the fact that back to school time is fast approaching. As the children head back to the hallowed halls of learning, I thought it was a good time to bring to you what we consider at our Ottawa law office to be the ABC’s of estate planning:
All You Likely Need are Three Key Documents
Essential estate planning means you have at least these three documents: a Will, Power of Attorney for Property, and a
Power of Attorney for Personal Care. Depending upon your situation, you may also need other documents.
To ensure your family will be taken care of and your assets will be distributed as you want upon your death, you need to have a valid, legal Will. Your Will can address:
• Who will look after things after you die — Choose the right person for the job of Executor, not necessarily your oldest child or your favourite relative. Name someone who is competent, conscientious, and organized. Sometimes a professional or a trust company is the best choice. Acting as an executor is not a privilege or a right. It can be a challenging and time-consuming job.
• Who will look after the kids — If you have one or more minor children (under age 18), you can name a temporary guardian to care for them in the event of your death. Only a judge can name a permanent guardian. You should also put in writing the reasons for your choice of guardian(s) or why you do not want others to act in that role. Although a judge will make the final decision, your written reasons may help.
• Who will look after the kids’ money — In your Will you can set up trusts, a very useful and essential estate planning tool if children are too young to handle money or too young to receive an inheritance directly. For a minor child, you may want to use a trust so that a child’s inheritance is looked after by someone else until your child is mature enough to handle the responsibility. If you have a child with a disability, a special type of trust can protect certain government benefits that the child may be receiving.
For someone to look after your financial affairs when you are not able to do so, you need a Power of Attorney for Property (POA). If you do not have this document and lose your marbles, the Public Guardian and Trustee will take over your affairs. Don’t assume that your spouse can look after things if you haven’t signed a POA. That simply isn’t the case. If you jointly own your home and lose mental capacity, your spouse can’t sell the house without a court order naming your spouse as your guardian. When deciding who to name, appoint someone who is trustworthy and organized. You can name more than one person at a time or one person with an alternate in case the first named person cannot act. There are pros and cons to doing it each way.
A Power of Attorney for Personal Care allows someone to make medical care and other personal care decisions (such as admission to a long-term care facility) for you if you are not mentally capable of making them for yourself. Name someone who knows you well enough to make the decision you would have made for yourself. It is important that this person will make the decision even if it isn’t the decision they would have made for themselves. Again, appoint one or more alternates.
Bring Order to Chaos and Ensure Your Documents Are Up-to-Date
Make sure that your personal papers are in order so that your Executor or Attorney can find key documents quickly and easily. Do your Executors and Attorneys know that they have been named? Do they know where to find your signed Will and Power of Attorney if they need to act? If not, advise them as soon as possible.
If you already have a Will and Powers of Attorney, then you get an A+. However, back to school time is a great time to check that they are up to date and still in line with your estate planning goals. Have you reviewed them in the last 5 years? Would you still name the same people? Have there been any significant changes in your family situation or financial picture? If you have any concerns about who you have named in your documents, re-think and update your documents. Consider joint appointments to increase accountability.
Consult a Professional
Be sure to consult with a professional who specializes in estate planning. Don’t rely on do-it-yourself kits. They can offer false assurances that your estate planning is in order when it really isn’t. Mistakes may not be discovered until it is too late to correct them. Mistakes earn an F and can ultimately cost your estate $1,000’s in court fees and your loved ones an unbelievable amount of grief. A qualified professional will have the necessary skill and expertise to properly advise you how to best provide for your loved ones as well as how to meet your estate planning goals in the most tax-efficient manner.
Back to school time is a great time to ensure your estate planning is in order. Make an appointment to meet with one of our qualified lawyers to review your estate planning. We will make sure you pass with flying colours!
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
