Wills and Powers of Attorney — Why People Need Them
This article is intended to provide information to everyday people regarding Wills and Powers of Attorney and especially for those in our client area of Whitby, Bowmanville, Port Perry & Oshawa. These documents are a necessity for every adult and should be drawn up with a lawyer. I will address Wills at the beginning of the article and the second half will address Powers of Attorney.
One of my areas of practice is Wills and Estates. Often the most time consuming and expensive files that I act on arise where someone passes away without a Will. Too often people discuss the need to draw up documents with their lawyer only to put it off for another day. What happens when someone passes away without a Will?
The Succession Law Reform Act of Ontario governs the administration of Estates where people pass away without a Will. When a Will is drafted Executors are chosen to be in charge of the Estate. For married people the Executor is usually your spouse and an alternate is selected in the event your spouse predeceases you or cannot act. If a person passes away with no Will the Succession Law Reform Act will dictate who will be the executor of your estate and in charge of its administration. If you do not get along with a certain family member during your life it will not matter, the Succession Law Reform Act could dictate that family member as the executor of your estate. Similarly with your beneficiaries, depending on who is alive at the time of a person’s death, the Succession Law Reform Act will dictate the beneficiaries of your estate. It will not matter if you have a child or family member you have not spoken to in years, the Act could name that person as a beneficiary. The legal work involved when someone passes away without a will is expensive. More documents and consents from family members are often required. This results in extra fees to the Estate. The irony is that many people do not want to make a Will as they fear the cost will be too high. In the end, passing away without proper documents costs the Estate much more money in legal fees. What is the process of getting documents in place?
Before I meet with clients I generally send out a Will and Power of Attorney questionnaire to be filled out by the client(s). The questionnaire gets the clients started on the road to determining the structure of their Wills and Powers of Attorney. It also has a checklist that helps me to catch any legal issues that the client(s) may have overlooked but which have a serious legal impact. One such issue would be a situation where not all of your children are biological children. Once the checklist is complete I meet with client(s) for an Estate planning appointment. This is not an ominous appointment. Clients often bring in their young children and the meetings often turn into an interesting discussion about clients’ families and their wishes. The appointments generally take one hour depending on the circumstances and issues discussed. The goal of that initial meeting is to come up with a draft structure of Wills and Powers of Attorney. We also generally discuss finances and which assets pass through your estate and which do not. I explain probate (Estate) taxes to the clients as well. I discuss with clients any specific bequests they would like to provide to family members. Guardians are named for any minor children. This is especially important for parents to avoid controversy in the event both spouses pass away with minor children. We discuss the clients’ wishes with respect to burial or cremation. I also discuss with the clients more complex planning issues such as the consequences of providing funds to a disabled beneficiary who receives regular monies from the Ontario Disability Support Program (ODSP). I am able to draft documents wherein money for a disabled beneficiary can be placed into a trust. This is important as a disabled beneficiary who directly receives money from an estate may lose his/her benefits under the ODSP program.
Following the Estate planning appointment my assistant and I work on draft Wills and Powers of Attorney for the client(s) according to the specific instructions I have received. These drafts are sent to the client by email or regular mail to review. The clients are able to review the documents at their convenience. Following the review of the documents changes can be made and an appointment is set up for the clients to come in to sign the documents. At the signup appointment all documents are signed by the clients and the lawyer and assistant witness all the documents. I generally have the clients leave my office with all signed documents on the day of the signup appointment. The documents are best kept in an unlocked fire proof box in a safe place in the clients’ home. Wills are only one half of the work I do on behalf of clients; Powers of Attorney are just as important.
There are two types of Powers of Attorney I complete for clients: Power of Attorney for Property and Power of Attorney for Personal Care. Power of Attorney documents are used when someone is still alive but cannot make decisions for some reason. Primarily the documents are used when an illness causes a person to be in a state where they cannot express their wishes for their care or their property. In certain circumstances a Power of Attorney for Property can also be used where a person is out of the country. Similar to appointing executors to be in charge of an Estate, a person selects their Powers of Attorney to make decisions on their behalf. Often a spouse and an appropriate alternate is selected. I discuss with clients the importance of the documents and how exactly they can be used. I have often heard clients say that because they are healthy they do not need Powers of Attorney. This is an incorrect assumption. I have seen previously healthy clients become incapable due to strokes or dementia. Vehicle accidents are also something people fail to consider. What happens if you do not have Powers of Attorney?
In the event a person does not have a power of attorney Ontario’s Public Guardian and Trustee steps in to Act as Guardian. If a family member or spouse wishes to step in and Act as Power of Attorney a complex application must be submitted to the office of the Public Guardian and Trustee. This is expensive in terms of legal fees and it is often a frustrating process for family members who have the best interests of their incapable family member at heart. By executing Powers of Attorney with a lawyer dealing with the Public Guardian and Trustee can be avoided. I also address specific issues within the Powers of Attorney such as a no heroic measures clause that will address what is to happen when it is inevitable that a person is going to pass away and whether a medical professional should declare the person incompetent in order for the documents to be used.
Prior to concluding this article I will address an unfortunate development in the Estate planning field. Several clients have stated that they do not need to make documents with me or discuss estate planning because they purchased a do-it-yourself Will and Power of Attorney kit from their local bookstore. The clients tell me they filled out the forms themselves. This is problematic for many reasons. These kits fail to address many important issues. Here are just a few:
If your children are your beneficiaries what happens if one of your children predeceases you? What happens if your predeceased child has children, being your grandchildren. Clients often fail to consider the legal meaning of words such as “may” vs. “shall” Will kits often have bequests that are too general or confusing to carry out; if you named a charity as a beneficiary was it properly named using the registered name of the charity? Will kits are fill in the blank forms, what is to stop a deceitful family member from writing in some additional information after the document has been executed? Will kits will often not address issues surrounding disabled beneficiaries or how to provide for stepchildren. A lawyer will include notes in the file regarding a person’s mental capacity at the time the document was executed, a will kit will not do this. A family member could possibly challenge the will and claim the person lacked the mental capacity required to execute the document. The above are only the tip of the iceberg when it comes to problems with do-it-yourself Will kits. It is best to see a lawyer for proper estate planning. The cost for documents is inexpensive compared to the cost of dealing with issues that arise when a person passes away having not executed any documents. I typically charge $300 for a single person for Wills and Powers of Attorney and $500 for spouses plus applicable taxes. This includes two appointments and all work surrounding the drafting of the documents. My clients feel a sense of relief once their Wills and Powers of Attorney are drawn up and signed. In the end a minimal cost now will save much larger costs in the future. Thank-you for reading. Please contact the undersigned for further inquiries. We would ask that you consider our firm for any future real estate, wills and estates, and/or corporate law assistance you, your clients, or your family may require.