BASIC ESTATE AND PERSONAL PLANNING
Estate Planning can be comprehensive depending on each individual or family’s situation.
BASIC ESTATE AND PERSONAL PLANNING
Estate Planning can be comprehensive depending on each individual or family’s situation.
The kind of assets, family composition and relations, age, breakdown of marriage, age of children, dependants with disabilities, and whether there is a family business, can be some determining factors for choosing different strategies and approaches to estate and personal planning.
Every person should have at least the basic estate and personal planning documents such as a Will, a Power of Attorney and a Representation Agreement.
WILL
A Will is a legal document that allows you to determine who will administer your estate after you die, and with some limitations, to determine who will be entitled to your estate. The general principle in British Columbia is that there is testamentary freedom. Although the law provides for inheritance rules if a person dies without a Will, we encourage everyone to make a Will. We encourage you to properly document your decisions about the distribution of your wealth while you are able to.
POWER OF ATTORNEY
A Power of Attorney (“POA”) is a document in which you may name a person or persons to deal with your legal and financial affairs while you are alive. A POA is a very powerful document. We recommend that you carefully consider the qualifications of the person you name as your attorney. There are strategies or mechanisms to reduce your vulnerability to the risk of misuse of the POA, depending on your particular circumstances.
It is very important that your POA be an “enduring power of attorney” which continues to be effective even if you become mentally incapable.
The consequences of dealing with not having an enduring power of attorney if you lose mental capacity, may be expensive, as applying to Court to name a Committee of the person and the estate of an individual can be a lengthy and expensive process. The Public Guardian and Trustee may also be involved.
REPRESENTATION AGREEMENT
A Representation Agreement (“RA”) is a legal document by which you appoint a person (Representative) to make personal care and health decisions on your behalf or to assist you in the process of making those decisions if you are unable to make them or need assistance for making them.
We recommend that you appoint a Representative who you trust and who understands your beliefs and principles about health care and living with dignity. A RA is a very important document, particularly for aging individuals. The RA may or may not include an Advance Directive (or Living Will) where you express your views and feelings, amongst other wishes, about life support and “heroic measures” to keep you alive. Health care for loved ones can be very emotional and, in some cases, strongly controversial within the family. In the end, it is your decision and we encourage you to have a say while you are able to.
TRUSTS
Other estate planning tools commonly used are trusts, which can be inter vivos (during your lifetime) or testamentary. A trust is usually created by a written document by a Settlor who appoints a person called the Trustee, to manage, control and administer the trust’s property for the benefit of one or more persons, called the Beneficiaries. There are a variety of trusts which, depending on the circumstances of each person or
family, may help to:
• centralize ownership and management of assets;
• allow flexibility in determining future wealth distribution;
• enhance asset protection from third-party claims and inheritance actions;
• increase confidentiality;
• potentially freeze capital gains, avoid probate procedure, probate fees and probate claims; and
• protect and enhance benefits for heirs or children with disabilities.
Ask us and we will help you to design an estate planning strategy that is best for you, your family and your business succession.