Estate Planning
Table of Contents
Importance of Estate Planning
Creating an estate plan is a crucial step in securing your legacy and ensuring that your wishes are carried out after you’re gone. While it may not be the most pleasant topic to think about, the reality is that life is unpredictable, and having an estate plan in place can provide peace of mind for you and your loved ones.
In the simplest form, an estate plan is an overall determination as to where and how an estate will be distributed on death.
Presumably, you are looking for an estate planning lawyer in British Columbia because you already appreciate the importance of proper estate planning. You want to ensure that your loved ones are well taken care of in case of your incapacity or death.
There are several benefits to working with an estate planning lawyer in British Columbia.
A good estate planning lawyer can help you:
- ensure that your family, especially your children, are properly cared for after you pass away;
- minimize the taxes and probate fees payable upon death;
- protect the estate from creditors;
- structure the estate plan to reduce the potential for will variation claims made by unhappy family members; and
- draft the estate plan with clarity so that your wishes are properly carried out after you pass away.
What Should a Complete Estate Plan Include?
You need to plan for what happens to your assets and liabilities after you pass away but you also need to have a plan in place to protect yourself and your family in the event that you lose mental capacity during your lifetime.
Therefore, at minimum, an estate plan should include:
- a will;
- an enduring power of attorney; and
- a representation agreement.
Depending on your financial circumstances and your specific goals, you might also want to have in place family trusts (a joint partner trust or an alter ego trust), beneficiary designations, business succession planning, and other available estate planning tools available in British Columbia.
What is a Will?
A will is a legal document that allows the will-maker to set out in writing how they would like their estate to be distributed after they pass away.
If they have minor children, the will-maker can appoint a guardian in their will to ensure their children are cared for after they die.
In British Columbia, the Wills, Estates and Succession Act sets out strict formalities that are necessary to make a valid will.
Check out our page on wills to learn more.
What is a Trust in Estate Planning?
A trust is a method of property ownership in which the legal owner (the trustee) holds the property for the benefit of others (the beneficiaries). There is a split between the legal ownership and beneficial ownership of the asset.
There are several different types of trusts, such as testamentary trusts, spousal trusts, discretionary trusts, alter-ego trusts, joint partner trusts, disability trusts, family trusts, bare trusts, etc.
Check out our page on alter ego trusts and joint partner trusts to learn more.
What is a Representation Agreement?
Representation agreements cover both health care planning and personal care matters. They also deal with limited financial and legal matters.
Personal care includes matters such as living arrangements, diet preferences, participation in activities, and contact with others.
A representation agreement may be made under either section 7 or section 9 of the Representation Agreement Act.
A standard section 7 representation agreement can cover minor and major health care, personal care, obtaining legal services and instructing counsel, and routine management of financial affairs.
Whereas, an enhanced section 9 representation agreement is more comprehensive and includes the authority to refuse life-supporting health care.
The decision as to whether to make a section 7 or section 9 representation agreement depends on whether the adult making the representation agreement has the requisite mental capacity or not. If an adult has the requisite mental capacity they should make a section 9 representation agreement. On the other hand, if an adult does not have the requisite mental capacity to make a section 9 representation agreement, they can only make a section 7 representation agreement.
The benefit of a representation agreement is that it allows you to plan for incapacity and make arrangements regarding your healthcare and personal care.
Check out our page on representation agreements to learn more.
What is a Power of Attorney?
A power of attorney deals with finances and property. It does not deal with health or personal care matters. It allows you to appoint someone to make financial decisions on your behalf in the event that you cannot do so.
In British Columbia, there are two types of powers of attorney: a general power of attorney and an enduring power of attorney.
At common law, a power of attorney terminates when the maker of the power of attorney (the “principal”) becomes mentally incompetent or dies. However, an enduring power of attorney continues to be in effect even if the principal becomes mentally incompetent.
An enduring power of attorney is normally effective when it is signed by the principal and attorney but it can also be “springing”, meaning, that it takes effect only if a particular event occurs.
The benefit of an enduring power of attorney is that it allows you to plan for incapacity and make arrangements regarding your financial and legal affairs.
Check out our page on powers of attorney to learn more.
What is an Advance Directive?
An advance directive is a written instruction to give consent or refuse consent to certain health care. As long as the instructions are clear, a healthcare provider will follow the instructions.
Check our page on advance directives to learn more.