Wills and Estates

Estate Planning

Estate planning” encompasses many topics, from looking at how and when one will retire, to reviewing life insurance policies or employment benefits, to considering how one wants to be cared for if they can’t care for themselves, or who will manage affairs if they can’t, to comparing assets with lifestyle expectations, to making a will, to reviewing investment portfolios and debts, to making arrangements to care for someone who will need assistance, or to perhaps gifting to a charity.

Effective estate planning helps ease one’s own concerns about finances and health care – and eases concerns for caregivers and executors. Estate planning gives clarity about one’s situation and means, and allows one to direct one’s life (and death).  

There may be a few professionals involved in estate planning – from an accountant to an investment advisor to a lawyer to an insurance advisor.

Typical Estate Planning Documents

  • Making a will
  • Making an enduring power of attorney
  • Making a health care representation agreement
  • For some, trust agreements or other deeds may be recommended

 Verifying Ownership of Assets

  • Check who the registered owners of  land and investments are
  • Check who the registered owners of vehicles, boats and RVs are

 Verifying Beneficiaries

  • Check who life insurance policy beneficiaries are
  • Check who are named as beneficiaries of RRSPs, RRIFs and TFSAs
  • Note that RESP plans do not name beneficiaries (like RRSP, RRIF or TFSAs do) and provisions to deal with RESPs can be made in a will

 Some Estate Planning Considerations

  • How would you ideally like to spend your time?
  • How will you realistically spend your time?
  • Is downsizing a home or job for you?
  • Current health status
  • What are the sources of retirement income?
  • Realistic estimates of living expenses
  • What is the fair market value of assets?
  • What is the total amount of debt?
  • Review medical or dental insurance policies
  • Cost or availability of travel insurance
  • Investment advice on risk and rates
  • Realistic estimates on investment returns and advisor fees
  • Seek advice on contributions to or withdrawals from RRSPs, RRIFs or TFSAs
  • For blended families, arrange adequately for the spouses and their respective families
  • Make arrangements for charitable gifts, if desired
  • Succession planning if one is a business owner
  • Inquire about RDSPs (Registered Disability Savings Plan) for an adult child with disabilities
  • Have an idea of how much it will cost for income tax, accounting fees, legal fees, and probate fees on death and review whether there are safe and efficient ways to reduce these costs
  • If one’s holdings are complex or family disputes are anticipated, professional advice is recommended
  • If a person holds property or investments outside of Canada, professional advice should be sought
  • There is no “one size fits all” estate planning program or scheme – estate planning is different for everyone and should be reviewed regularly

Estates

What is an estate?

All of a person’s assets and liabilities including all interests in land and other property owned at the time of death comprise an estate. Estate administration is ruled by the laws of the jurisdiction where the deceased was domiciled at the time of death.

What is probate?

When a person dies and leaves a will, probate is the process of receiving official court approval of the will and confirms the authority of the executor so that third parties may rely on it. The executor has the right, but not the obligation, to act. After an estate grant is issued, the executor has legal authority to deal with the estate as permitted by law and directed in the will.

What is administration?

When a person dies and does not leave a will, the court may issue an estate grant to a party interested in the estate, often a family member, who applies to the court to be appointed administrator of the estate.  It may take longer to obtain court endorsement if the deceased did not leave a will but the result is that an administrator is officially appointed and that party may then deal with the estate in the same way as an executor. A common term for executor or administrator is “personal representative”.

Court fees

Fees are payable when a court application for an estate grant is made in BC. For example, for a BC estate valued at $50,000, the fees would be $350 ($200 filing fee plus $150 probate fees); for a BC estate valued at $200,000, the fees would be $2,450 ($200 filing fee plus $2,250 probate fee); for a BC estate valued at $500,000, the fees would be $6,650 ($200 filing fee plus $6,450 probate fee). Transferring land, bank accounts or vehicle ownership during one’s lifetime or adding others to title in order to avoid paying court fees is often not the best way to do estate planning; seek legal and accounting advice before making these kinds of transfers.

When is a grant needed?

An estate grant may be required by the Land Title Office; banks may require a grant before funds are released; the motor vehicle registry may require a grant before transferring vehicles. A grant is always required if the deceased owns an interest in land in BC regardless of its value. A grant may not always be required by banks or the motor vehicle registry office if the total value of estate assets is less than $50,000. A common example of when a grant is not required is when the first of a couple dies and they hold their vehicles, bank accounts and land as joint owners; in this case ownership may be easily transferred to the survivor at minimal cost. For a further example, if a single deceased lived in a rental unit at the time of death and the only estate asset is a bank account with $5,000 in it, it is unlikely that a grant will be necessary.

Settling the estate

The personal representative settles the estate when he or she values, gathers and sells estate assets and pays estate debts, taxes and funeral expenses and transfers specific gifts and the remainder to beneficiaries.  A will names beneficiaries and if there was no will, legislation sets out an entitlement and proportion scheme and generally immediate or extended family would take if there is no will.

It may take a few months or many months to settle an estate, depending on many factors, including how complex it is, how long it takes to sell property, or whether someone contests the proposed distribution. Special circumstances often arise in estate administration. Special circumstances include second or subsequent relationships, step-children and assets situated outside of BC. As well, if a spouse or children feel that they have not been suitably provided for in a will, a claim may be made for alteration of the will by the court. Legal advice should always be sought if special circumstances present themselves.

The above is for information purposes only and is not legal advice.

Representation Agreements

Information On Representation Agreements

One that deals with property and personal care and one that deals with personal care only. In many situations, only a Health Care Representation Agreement is signed and this is used along with a Power of Attorney to manage the donor’s personal care and property matters.

Health care agreements give family and caregivers guidance on how the donor wants to be cared for and sets out the types of decisions the Representative can make (such as consenting to surgery, making care arrangements or refusing treatment) and usually includes a Living Will (which sets out end-of-life wishes). A health care agreement can be revoked or changed at any time while a person still has capacity.

Everyone’s situation is different, so professional advice should be sought as to what types of planning documents are most appropriate. 

The above is for information purposes only and is not legal advice.

Wills

Every adult should have a Will, regardless of whether they are single, in a committed relationship, have immediate family, or own property.

A Will “speaks” on death and appoints an executor/trustee who will administer the estate (to sell assets, pay taxes and transfer gifts to beneficiaries, for example).

A Will should be reviewed every few years or after a life event, such as a decline in wellness, selling a business, the loss of a spouse or child, divorce, or a new relationship. Many people have blended families and Wills and other estate planning work can direct how each side of the family is provided for.

Not having a Will may result in intestacy, and then legislation determines who will administer the estate, who the beneficiaries are, and how much they will receive. Making a Will gives a person control over the disposition and administration of their estate and guides grieving family.

It is typical for a Will to only be part of estate planning: an Enduring Power of Attorney and/or Representation Agreement may also be prepared so that property and personal care matters can be dealt with if a person needs assistance and is unable to make these decisions.  There are times when, in addition to a Will, Enduring Power of Attorney and Representation Agreement, more involved estate planning work such as cohabitation or marriage agreements, corporate work, trusts or transfers of property are recommended by lawyers or accountants.

Everyone’s situation is different, so professional advice should be sought on what types of planning documents are most appropriate.

 

The above is for information purposes only and is not legal advice.

Powers of Attorney

Enduring Powers of Attorney 

Most of us know someone whose ability to make everyday decisions has gradually or suddenly been impaired. Stroke, accident, dementia or chronic illness can impact one’s ability to manage his or her property and personal care. Paying bills, buying or selling a home, managing investments or dealing with health care professionals become challenges to those whose capacity has deteriorated. Signing an Enduring Power of Attorney (“EPA”) while one is well allows the donor (the person signing the EPA) to specify who he or she wants to manage his or her business affairs now and/or on the loss of capacity. A Health Care Representation Agreement is often also prepared; this allows a person to appoint someone to take care of personal care and gives guidance on health care decision-making now and/or on the loss of capacity.

Powers of attorney can be limited and deal with specific property or general and deal with all property. Powers of attorney can be ordinary or enduring: ordinary powers of attorney are no longer valid once one loses mental capacity while enduring ones are.

A person does not lose control over their affairs by signing an EPA and can continue to deal with his or her property as before; an EPA allows someone to assist in dealing with property such as money, vehicles and houses. An EPA can be revoked or changed at any time while a person still has capacity.

The above is for information purposes only and is not legal advice.

Contact Us

Lois A. Potter Law Corporation
201-5710 Teredo Street
Sechelt,
British Columbia,
V0N 3A0

P.O. Box 1669
Sechelt, British Columbia
V0N 3A0

Phone: 604-885-4151
Fax: 604-885-5362
email: info@loispotterlaw.ca