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Wills and Estates LawMy Wills and Estates practice involves organizing, preserving and protecting a person's estate for posterity, as well as preparing applications for Grant of Probate and ultimately transmitting the estate to the beneficiaries.For quick reference, please click on the following links: Wills Power of Attorney Living Will Representation Agreement Preparing the Estate for Probate Wills Variation Act Wills A Will is the first step in planning for the future - it is a legally binding and enforceable document defining what to do with all your property at the time of your death. Wills can be simple (transferring all property to one or two beneficiaries) or complex (involving many disparate beneficiaries, complex property transactions, ongoing trusts with various conditions, etc). The author of a Will is called the Testator. The terms of a Will typically involve: - paying out all lingering debts you may have - including income taxes and deemed disposition capital gains triggered by death, - transferring your property to your beneficiaries on the terms you direct, - instructions regarding special funeral / burial arrangements, and obituary statements, and - last goodbyes to your loved ones. To implement the Will, you must name an Executor (to carry out the terms of the Will) as well as a Trustee (to manage any trusts created in the Will). Usually one person is named both Trustee and Executor. I always recommend that my clients also name an alternative Executor / Trustee in the event your first choice is unable or unwilling to assume the considerable responsibility. It is important to note that Wills must be signed by the Testator in the presence of two witnesses, who must also sign the Will. Neither witness can be related to any Executor, Trustee or beneficiary under the Will - a breach of this rule may invalidate that Executor, Trustee or beneficiary (and as a result, they will not receive any gifts made to them in the Will). In my Wills practice I make it a priority to sit down with my clients and take the time to discuss their goals and intentions for the future, so that I may advise them on the many possible options that exist to ensure their loved ones are provided for in the easiest, most cost-effective and tax-advantageous manner. There are many estate planning strategies and structures available to preserve the value of an estate as well as reduce probate fees, capital gains taxes and terminal return income taxes. An additional service I provide my clients includes registering their Will with the British Columbia Vital Statistics Agency, which provides a Wills Registry for the location and date of all Wills (although not a copy of the Will itself). This provides independent verification of your most recent Will. I also advise my clients to draft a list of all their bank accounts, credit cards, investments, insurance policies, addresses of beneficiaries, etc. and keep that list near the Will to facilitate the Executor's task. There are a number of additional factors to consider when planning for the future. The first thing to understand is that a Will is an incomplete plan for the future. This is because a Will only comes into force upon death. However, most people don't just suddenly pass away. In the event you are incapacitated due to an accident, disease or old age, and thus unable to care for yourself or your estate, a Will does nothing to permit spouses, children or beneficiaries to assist you. Who will pay your bills? Who will manage your property? Who will make important health care decisions on your behalf? A Will combined with a Power of Attorney and Living Will or Representation Agreement provides a full, well rounded strategy for preparing for the future, and ideally all documents should be obtained at the same time. Power of Attorney A Power of Attorney is a legal document naming a specific person (the Attorney) to manage all your property and financial affairs in the event of incapacitation. With a Special Power of Attorney, authority can be limited to specific tasks (like collecting rent from tenants); alternatively, with a General Power of Attorney, mail can be redirected, bills paid, credit cards paid or closed, taxes paid, property of every sort can be rented, leased or even sold, bank accounts can be accessed to pay for anything - such as care facility fees, insurance policies can be altered, and so on. Plus, a Power of Attorney can be temporary - in the event of assisting someone who needs to recuperate from illness, or permanent - in the event of an aging parent or spouse. One important consideration with a Power of Attorney, as with a Will, Living Will and Representation Agreement (discussed below) is they can only be signed when the person signing is of sound and present mind. They must understand what they are doing, and want to do it, and be capable of signing their name so that their banks recognize it. Therefore, the right time to create a Power of Attorney is at the same time as your Will - you cannot and must not wait until it is too late. Once deemed incapacitated by a medical professional, it is illegal to create a Power of Attorney. Living Will A Living Will is a non-binding declaration of your wishes with regard to health care and extreme medical measures designed to prolong your life. Essentially, a Living Will is a statement of your wish not to be kept alive by heroic measures when in a medical professional's opinion, the chances of recovery are slim to none and the most likely effect of the heroic measures is that you will be kept alive but dependent on artificial life support apparatuses. The purpose of the Living Will is to alleviate your own suffering, as well as the pain and anguish experienced by your loved ones surrounding you. It also removes the responsibility for life-or-death decision making from your loved ones, as the Living Will clearly communicates your instructions. But remember, a Living Will is non-binding. Representation Agreement As to where a Power of Attorney deals with all your property issues, a Representation Agreement deals with all your health care issues. A Representation Agreement is a sophisticated, detailed document designed to record your health care instructions, and appoint representatives to act on your behalf as well as monitors to oversee the representatives (to ensure adherence to your instructions in the Agreement). It also allows you to provide specific instructions for a wide range of medical situations, emergencies and interventions; as such, a Representation Agreement goes well beyond the life support scenario of a Living Will. A Representation Agreement is also much more than a declaration of your wishes...it is a contract between you and representatives and monitors to care for you in your time of need. For example, if in your representative's opinion you are no longer capable of caring for yourself, they can select a long term care facility for you, check you in as a resident and manage your stay there. Preparing the Estate for Probate Upon death, the Will comes into force and the Executor becomes responsible for managing the estate of the deceased. The Executor is also usually responsible for arranging the funeral and burial plans for the deceased. Following the funeral, the Executor must take several steps before they can transfer all property to the beneficiaries. In my capacity as lawyer, I am often retained by the Executor to assist him/her with all these steps in addition to preparing the application for Probate (see below). These steps include, but are not limited to: - contacting banks, investments, pensions, CPP, CRA (Canadian Revenue Agency), strata management companies, insurance companies, beneficiaries and other family members, etc. to notify them of the passing of the deceased and apply for any death related benefits, - canceling monthly services such as television and telephone services to reduce unnecessary expenses for the estate, - ensuring any vacant real property (house, condo, vacation home) is cleaned, locked, and properly insured, - making an inventory with valuation of all property in the estate, - making a financial statement of all assets and liabilities of the estate, - mailing notices to, and obtaining releases from, all beneficiaries as well as family members entitled at law to a share of the estate. If the estate is worth more than $10,000.00, the executor must apply to the Supreme Court of British Columbia for a Grant of Probate of the estate. This means the Executor must be certified by the courts before he/she can proceed to transfer the estate to the beneficiaries. Probate is a complex court application, however it usually does not involve speaking to a judge. Most applications can be made using affidavit evidence (sworn statements), in addition to inventories of the estate and supporting legal documents. The process can take around two months to complete, and only upon obtaining a Grant of Probate can bank accounts be closed, investments liquidated, houses sold on the open market, and all property of the estate transferred to the beneficiaries. One final important consideration is that the Executor must pay the deceased's final income tax assessment (called a terminal return) as well as the estate's income tax assessment (if the estate increased in value between the date of death and date of transferring property to beneficiaries). A Clearance Certificate must be obtained from the CRA before the Executor is discharged of all responsibility for the deceased's taxes, and so I usually recommend the Executor not transfer all property or money to the beneficiaries until the Clearance Certificate is obtained. Wills Variation Act All spouses (legal and common law) and children of the deceased are entitled by statute to a share of the deceased's estate. As such, when a Will does not adequately provide for spouses or children, a Wills Variation action can be initiated against the estate. Essentially, you are asking the court to change the terms of the Will so as to include any family members not included by the testator (the author of the Will). An estate that is sued in this regard is frozen for months if not years, meaning no property will pass to any beneficiaries, until the matter is resolved either through settlement (between the Executor and plaintiffs) or through court order. Back to top of page |
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