Wills and Powers of Attorney
What is a Will?
A Will is a revocable written document that becomes effective when you die. Among other things, your Will does the following:
- it appoints the person you want to act on your behalf after your death (your Executor)
- it specifically instructs your Executor to pay off all of your debts (such as your mortgage, funeral expenses, estate costs), taxes and probate fees
- it sets out your last wishes for how your property and assets will be distributed after your death
- it specifies your choice of guardian for any minor children
A Will may contain your instructions with respect to both funeral arrangements and organ donation. Such instructions are merely an expression of your wishes and are not legally binding on the Executor. Many people deal with these matters in a letter to the Executor that is kept with the Will.
Who should have a will?
Anyone over the age of 18 who:
- owns assets (such as a house or business)
- is married or is in a common law or same sex relationship
- has children
- wishes to benefit friends or charities
- is a party to an existing domestic contract (cohabitation, marriage or separation agreement), shareholders’ agreement or partnership agreement that requires the parties to make a Will containing specific terms should have a Will and it should be reviewed and revised regularly as part of one’s personal and financial planning.
If you die in Ontario without a Will, the government will, in effect, make a Will for you and the current law of Ontario would determine who will receive your assets and the amount of the inheritance. Without a Will, you forfeit control over who will be the Executor to act on your behalf after your death and over who will receive your property and assets after your death. The following problems often arise when a person dies without a Will:
- In the absence of a Will, blood relationships to you receive all of your assets. If you die without any blood relationships, your estate will pass to the government. No gifts will be made to friends or to your favourite charity. This distribution of assets will not necessarily coincide with your wishes.
- An Executor will have to be appointed by the court. This will result your estate incurring legal fees. The Executor appointed by the court may have to post a bond which will result in an additional cost to your estate.
- Any children will inherit at age 18, which is often too young.
By making a Will, you can choose your own beneficiaries based on their existing and potential financial needs as well as their relationship to you. You can establish trusts and determine at what age your children or beneficiaries will receive their inheritance. Family heirlooms and items of sentimental value can be given in a Will to specific named beneficiaries avoiding conflict among family members. You can make charitable bequests to charitable organizations that have always been important to you. You can save probate and other taxes after having received tax advice and with a properly drawn Will.
How do I cchoose an executor?
- makes your funeral arrangements
- pays your debts
- files your tax returns
- works with the estate’s solicitor to have your Will probated, if necessary
- locates, appraises and liquidates your assets
- distributes your property and assets to your beneficiaries
Your Executor can be a family member, a friend, a lawyer, an accountant or a trust company. You should consider the following when appointing an Executor:
- Is the person that you appointed someone that you trust?
- Is your estate complex and will the person appointed have the time and ability to administer your estate?
- Where does the person appointed live? It may be difficult for the person appointed to administer your estate if they live far away and, if they live outside of Ontario, they may have to post a bond with the court in order to act as your Executor.
- Is it likely that the person appointed will outlive you? It is always advisable to appoint an alternate Executor or Executors in the event that, for whatever reason, your first choice for Executor is unable or unwilling to act.
If you die without a Will, the court will appoint someone to administer your estate (usually the spouse or the closest next of kin). The selected person may not be the optimal candidate due to a lack of familiarity with your assets or a lack of financial expertise. The court usually appoints only one person as administrator of the estate. More than one Executor may be appointed in a Will allowing you to choose family members and/or professionals and provide for alternate Executors if those appointed cannot act.
When should my will be revised?
Once made, a Will should be regularly reviewed and revised where circumstances have changed, including:
- A change in the status of dependants such as a child attaining eighteen years or financial independence or an aging parent becoming a dependent.
- A change in marital status. A marriage revokes an existing Will unless it is expressly made in contemplation of marriage. If a separation from a spouse or commencement of a “common-law” relationship occurs, it is necessary to have a Will to ensure that your wishes are carried out regarding the entitlement of the spouse to share your assets.
- A change in residence and/or location of assets which may require that a Will be made in international form or that multiple Wills be made in different jurisdictions.
- A change in one or more of the assets specifically gifted in the Will.
- A beneficiary dies.
- An Executor is unwilling or unable to act, for example, he/she gets ill or dies or moves to a distant city.
Your Powers of Attorney
Power of Attorney for Property
This very powerful document operates while you are alive and, unless it contains restrictions, it allows the person appointed to act on your behalf to do anything that you could do with your property (your real estate, bank accounts, investments, etc.) other than make a Will if you become incapacitated.
Power of Attorney for Personal Care
This document is also called a living will, it also operates while you are alive and allows the person appointed to make decisions regarding food, shelter, hygiene, clothing and health care for you if you become incapacitated. It also frequently includes a request not to artificially prolong the dying process if your condition is terminal and death will occur whether or not artificial life sustaining procedures are taken.
What your lawyer will do for you
The legal work involved in preparing your Will and Powers of Attorney includes the following:
- Reviewing your completed questionnaire;
- Meeting with you to discuss your estate plan and taking your instructions with respect to your Will and Powers of Attorney;
- Drafting the Will and Powers of Attorney and forwarding a draft for your review;
- Meeting with you to execute the Will and Powers of Attorney;
- Preparing a witness’s Affidavit of Execution of a Will to be kept with each original Will;
- Giving a true copy of the Will and Powers of Attorney or the original Will and Powers of Attorney to you;
- Reporting to you.
Once the Wills and Powers of Attorney are signed, copies are kept in your computer file. If, in the future, you wish to change your Will or Powers of Attorney, the copy in the computer file is retrieved, the changes are made, and the new documents are then ready to be signed by you.