Personal
Planning: Wills and Powers of Attorney
by Heather
McKinnon, B.Comm., LL. B
Wills
Why Make a Will?
Preparing a will is one of the most important
tasks you will do in your lifetime. A will is
essential in order to simplify matters following
your death and allows you to plan a sensible,
cost effective and satisfying transfer of wealth.
It provides you with the opportunity to prepare
for the future in a manner that protects you
and your loved ones. A carefully planned will
is also imperative if you are responsible for
the care and support of an individual with special
needs.
Why Make a Will Through a Lawyer?
The making of your will, in all likelihood,
will result in the largest transaction that you
will ever undertake in your lifetime. In view
of the fact that your will contains the sum of
your life's transactions, it only seems logical
to seek professional advice.
To make a sound will, you need to consider numerous
factors, such as your assets and how you hold
them, taxes that arise at death and how to postpone
them, immediate cash to deal with death expenses/taxes,
etc. It is imperative that someone help you identify
all of the issues that you must address and provide
you with options as to how you might best deal
with these issues.
Everyone is unique with unique circumstances
that generally cannot be fully and/or adequately
addressed with a fill-in-the-blank will.
Dying Without a Will
A properly prepared will ensures that your property
passes on your death to those whom you wish to
benefit. Without a will, your property may pass
to individuals you did not intend to benefit,
while those you wanted to benefit, receive little
or nothing.
When a person dies without a will, the law in
Ontario provides a formula for dividing the property
of the deceased person. This formula, with the
exception of the spouse, only provides for relatives
of the deceased. To qualify as a spouse under
this law, there must be a legally recognized
marriage. Furthermore, the division and distribution
of the property of a person who dies without
a will is slower and more expensive than that
of a person who dies with a will.
Essentially, the distribution is such that the
spouse receives the first $200,000 of the deceased's
property and anything in excess of $200,000 is
split between the deceased's spouse and children.
If the deceased leaves a spouse and two or more
children, the spouse is entitled to the first
$200,000 and any amount over $200,000 is distributed
one third to the spouse and two thirds equally
between the children, however many there are.
In circumstances where there is no spouse or
children alive, the deceased's property goes
to his/her next of kin. If there is no next of
kin, then the deceased person's property becomes
the property of the Government of Ontario.
Will Review
Your will should be reviewed at least every
five years to ensure that both new laws and your
changing circumstances are reflected in your
will. A will should also be reviewed immediately
in the event a named beneficiaries dies, marriage,
divorce, birth of a child or grandchild, or if
there is a significant change in the value of
your estate. A will is revoked by marriage, except
in certain limited circumstances.
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Powers of Attorney
What is a Power of Attorney?
While a will deals with your wishes about matters
after your death, a power of attorney deals with
matters while you are alive. A power of attorney
is a legal document wherein you appoint the person
of your choice to make decisions for you in the
event that you are unable to make your own decisions.
When you give someone power of attorney, you
are giving that person the authority to make
all the decisions that only you yourself would
normally be entitled to make.
All powers of attorney cease to be effective
upon death, at which time your will comes into
effect.
Power of Attorney for Personal Care
A power of attorney for personal care enables
the person you have appointed to make any & all
personal care decisions for you if you become
incapable of making them for yourself. It includes
authorizing the person you have appointed to
make decisions that may pertain to your health,
your medical treatment, where you are living,
etc. It only becomes effective if you become
mentally incapable of making your own personal
decisions.
General Power of Attorney for Property
A general power of attorney for property is
used if a mentally capable person wants to appoint
someone to act on their behalf for a specific
period of time or for a specific task. It becomes
valid immediately unless otherwise stated in
the document and ceases to be of any effect if
the person who gave it becomes mentally incapable.
Continuing Power of Attorney for Property
A power of attorney for property enables the
person you have appointed to make any and all
decisions with respect to your property that
you would normally be capable of making for yourself.
This may include such things as making bank deposits,
paying bills, investments, buying, selling or
refinancing a home, filing income tax returns
etc. This power of attorney can be made effective
immediately, while you are mentally capable and/or
it can be made to be effective in the event of
any mental incapacity.
Why Make Powers of Attorney?
If, for some reason, you are unable to make
decisions about your financial or personal affairs,
who will make those decisions for you? Mental
incapacity can happen to any of us, at any time.
It can happen suddenly, as a result of a stroke
or accident, or gradually as a result of a disease
like Alzheimer.
If you do become mentally incapable, who would
you prefer to have looking after your affairs?
Someone of your choosing or someone in accordance
with legislation or from the government? If you
have not already appointed a power of attorney
and you become mentally incapable, it will be
too late for you to choose.
If you become mentally incapable and do not
possess a power of attorney for personal care
individuals not of your choosing may be making
decisions for you with respect to medical treatment.
The Health Care Consent Act provides for who
may make consent to treatment decisions on behalf
of an incapacitated person. This person could
be your spouse, your child or your parent, your
sibling or any other relative.
Should you become mentally incapable and do
not possess a power of attorney for property,
the government may become responsible for your
affairs and will conduct them in the manner that
they feel is best for you. While the government
has certain legal obligations to manage your
assets fairly, your family's views and needs,
and even your own views and needs, might not
be adequately taken into consideration
By choosing to prepare powers of attorneys,
you are in control of your future. A power of
attorney is a simple and inexpensive way to plan
ahead and choose who will make decisions for
you on your behalf if you are unable to do so
yourself.
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Publication Disclaimer
This website contains general legal information
and this information does not constitute legal
advice. If you require specific advice you should
contact and retain a lawyer directly. Zimmerman McKinnon Anderson expressly excludes any representations
or warranties express or implied to the fullest
extent possible. |