|Shakespeare's Last Will and Testament|
Because it's something that truly affects all six billion plus of us on earth, perhaps more so and with greater common certainty than any other area of the law, the legal consequences of what happens to our property after our death, or after we are no longer capable of managing it, deserves a word. So even though I only do up wills as part of my legal practice by special request - I'm happy to help client's with them (and I currently have a lot of interest in them), I just don't advertise I do them - here's a brief plug for why you should put your legal affairs in order, regardless of how young you are or how little property you may current have, by creating a will and appropriate powers of attorney. Plus, here are a few factors to consider when doing so.
1. Do a Will - and seriously consider using a lawyer. Yes, you can do it yourself, but because it is so simple yet so important a document, the legal fees for using a lawyer are really low compared to the cost of messing it up by doing it yourself. Frankly, I'm more a fan of doing your own litigation in court if you absolutely have to - so long as the consequences to you of losing aren't too serious - because those types of legal expenses can mount quickly. With wills, most lawyers don't charge much for them, and in fact they are kind of loss leaders to bring in other business, or to win the much more lucrative estate administration business that comes when the will needs to be administered after death.
If you absolutely can't afford to use a lawyer, then by all means get a DIY wills book. Self-Counsel Press in Canada sells good books and kits that contain what you need.
Things to think of when doing as will include:
Who is best placed to be your executor? Remember this isn't an honour, it's a burden. Sometimes a very heavy burden. Pick someone not just whom you trust, but who has sufficient people skills to resolve some potentially nasty fights in the making, and who has sufficient asset management skills to adequately figure out how much property you have, what debts need to be dealt with and how the property is best managed until it is distributed. And get that person's permission first before naming him or her. Plus pick a backup executor, in case your primary executor can't do the job when required - even if s/he is younger than you, personal circumstances could get in the way. Consider naming a professional trust company; certainly more expensive than a family member, the professionals might be best placed to resolve disputes, protect your assets, and not burden those you leave behind.
In preparing to draft the will, focus first on a consideration of the people you may name as beneficiaries, rather than on the assets you may or may not have when you pass away. Strive especially to avoid later family disputes by being fair in what you leave to your closest relations. Sure you can attempt to disinherit certain people, but do you really want years of estate litigation among family members - a growing field in Canada as even average estates become larger due in part to great appreciation in real estate - to follow your death. There is a difference between being unequal in distribution of assets, compared to leaving someone close nothing at all.
Rather than leaving specific things to particular people, consider dividing up your estate by shares or percentages, because what you own when drafting the will may not be what you own when you die. Even though that cottage that has been in the family for three generations is the one thing you know you'll never sell, in twenty years you might decide to do exactly that - sell. And once you do, that favourite grandchild of yours to whom you decided to leave the cottage - and nothing else - could wind up with nothing out of your will.
If you do decide to do your will without a lawyer, be very, very, very careful about how you execute it. Although you might make a major drafting mistake, most wills survive most drafting mistakes at least to some degree - although they may no longer reflect all the wishes of the testator. But with execution mistakes, you often wind up with no will at all. I'm not even going to tell you here what proper execution amounts to, since it can vary a bit from place to place, just be very careful. You've been warned.
2. Do a Continuing Power of Attorney for Property - and be very careful with who you name as your attorney. This is a very powerful document. But also a necessary one in case you become incapacitated. It's continuing because it keeps working during incapacity, in contrast to a regular power of attorney which is usually set up for a limited time period and purpose (like executing house sale documents during a two week period when you will be on holidays), and usually gets automatically revoked upon any incapacity.
You can make your continuing power of attorney for property become effective as soon as it is singed - but the attorney named in it must in in possession of it in order to use it - or have it take effect upon incapacity; being effective immediately is the more common practice to avoid lengthy delays over medical examinations to determine whether you really are incapacitated. You can also stipulate any limitation you want in the document, like giving a power of attorney to manage bank accounts, investments or bills, but not to sell real estate.
3. Do a Power of Attorney for Personal Care - and think about being quite liberal in who you name, because whoever it is you want that person or persons to be quickly available onsite when required. You can name as many people as you wish as your attorneys for personal care. You can name them jointly (where they all have to decide), or jointly & severally (where any one of them can decide). I usually suggest joint and several naming in powers of attorney for personal care (but not in continuing powers of attorney for property), in order to maximize the chance you will have someone there to make decisions for you when and where you need someone. Plus, medical staff will always be somewhat of a check in providing advice and acting on wishes that are reasonable in the circumstances.
My lawyer did a great job on mine, LOL!ReplyDelete
This truly is wonderful advice, regardless of which country one lives in. I'm a lawyer and haven't yet completed this checklist. Thanks for the nudge and the excellent advice.ReplyDelete