Do a Will.
Plan your Estate.
Have a Power of Attorney.
Passing away without a Will can cause immense hardship on your family. We know, because we litigate estate issues all the time. We often see cases where a few minutes of planning could have saved tens of thousands of dollars and years of litigation.
Take a few minutes to answer some questions to find out whether you qualify for a Simple Will, or whether your circumstances require a bit more in-depth Estate planning.
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What is an Estate?
When a person dies, the law creates an "Estate" for that person. An Estate is comprised of some or all of the assets and all of the debts that the person had prior to their death.
You can think of an Estate as a big pot. When you die, some money and other assets go into that pot. Then you take out of that pot any debt (money you owed before you died). Whatever is left over in that pot gets distributed to certain people, called the "beneficiaries". However, whatever is in the "Estate Pot" gets taxed by the government. This is called "Probate Tax," otherwise known as the "Death Tax."
Estate planning can help save you and your loved ones potentially thousands of dollars by using certain legal mechanisms to pass assets on to loved ones without having them fall into your Estate (saving your Estate from Probate, Capital Gains, and other taxes).
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What is a Will?
In its simplest form, a Will is a legal document that sets out how you want your estate (or your property) distributed and how you want your loved ones to be cared for after you die. Using the example above, if you make a Will and get proper advice, you can decide who manages the pot (the "Estate Trustee"), you get to decide what goes into that pot, and you get to decide who gets what from the pot. Getting good advice when you prepare your Will cuts down on family disputes and can potentially save thousands of dollars in probate tax.
If you don't make a Will, the law will dictate what goes into the pot (and charge you tax on it), a judge will typically decide who manages your pot (the Estate Trustee), and the law decides who gets what's left over. But most people don't like the way the law will distribute their pot, it often results in families fighting each other, and there's a lot of other headaches that go along with it. Families often get torn apart because disputes arise as to who should get your property.
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Why should I have a Will?
If you die without a Will, Part II of the Succession Law Reform Act kicks in, and the law dictates who will get your Estate. More often than not, your Estate will be divided up in a way you wouldn't have wanted - meaning your Estate may end up going to someone you did not intend to give your money to, instead of your loved ones.
If your loved one died without a Will, and you come to see our firm to find out what your rights are, we can almost guarantee at some point you will say to us: "This is not what he/she would have wanted." And you're probably right. But the law doesn't care. Because the law assumes that if your loved one "wanted" something to happen, then she/he would have done a Will to make that happen.
The most common example that illustrates the pitfall of not having a Will are two people who are in a common law relationship (in some cases living together for 20+ years), but never got married. If one partner dies without a Will, the other partner will not automatically receive anything. The only way the living partner can receive from the deceased partner's Estate is to commence litigation, which could mean thousands of dollars in lawyer's fees and potentially years of court hearings.
So just do a Will, or at least reach out to us to find out what would happen if you didn't do a Will.
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What is a
Power of Attorney?
A Power of Attorney is a document that establishes who would have authority to make decisions on your behalf if you become mentally incapacitated. Mental incapacity can take many different forms, ranging from dementia to being in a coma from an injury. If something were to happen to you, and you were unable to make decisions, someone would have to be appointed as your Power of Attorney, and that may end up being someone you would not have wanted. That's why planning now is so important.
There are two types of Powers of Attorney:
(1) Power of Attorney for Property
You will name a trusted individual (your "attorney") who will have authority to access and manage all your finances. For example, your attorney for property would have authority to access your bank account to make sure your bills are paid.
(2) Power of Attorney for Personal Care
Your trusted individual (your "attorney") will be given the authority to make decisions affecting your health and personal care. For example, your attorney for personal care can direct your doctor as to what health treatment you receive.
Often, people choose the same individual to be their attorney for property and their attorney for personal care.