Every person should consider the following basic documents as part of an estate plan:
- A Will
- A Power of Attorney
- A Health Care Directive (also referred to as Health Care Proxy or a Living Will)
Depending on your circumstances, the following may also need to be prepared:
- Trust Declaration (if use of an inter-vivos trust may provide benefits)
- Insurance Declaration (if an insurance policy is to be distributed separate from estate assets for asset protection, probate minimization or other reasons)
- Joint Ownership Declaration
- Gift Declaration
You should always consult an estate planning lawyer to discuss your particular circumstances to determine what documents (if any) should be prepared in addition to ‘basic’ documents.
The most important point – Provincial law, and not you, will govern distribution of all your assets.
If a person dies without a Will in Manitoba, The Intestate Succession Act (Manitoba) will govern the distribution of your assets. The actual framework for distribution will depend on various factors. Some of these include whether or not you had a spouse or common-law partner at the time of death, whether or not you had children at the time of death, and whether children involved are of both of you and your spouse or common-law partner.
Another difficulty faced when a person dies without a Will is that no one has the immediate power to represent the estate or deal with estate assets. Only when an estate administrator (also often called estate trustee or legal representative) has been appointed by the court, which in many cases takes considerable time, will the estate have a legal representative who can act on its behalf. If you have a Will, however, the executor appointed in the Will has legal authority to represent the estate and deal with its assets immediately after death.
Generally, a new Will automatically revokes all prior Wills unless the new Will contains specific terms that a prior Will is to remain valid.
For example, if an individual has assets in Canada and Germany, the Canadian Will may include terms that it only revokes all prior Wills dealing with Canadian assets but does not revoke any Will made in Germany.
TIP: If you had one lawyer hold the Will in safekeeping for you but executed a new Will with another lawyer, you should pick-up your prior Will from the original lawyer and destroy it.
Yes. However, you need to take into account the additional logistics and expenses that it may create. For example, an executor that resides outside of Canada may be required to provide bond and surety to the court. Notwithstanding the potential additional logistics and expenses, it may still be the right choice in your circumstances. Consult an estate planning lawyer to discuss your particular circumstances.
A Will often (if not always) includes a survivorship clause in at least one of the distribution clauses. For example, “If my wife survives me for a period of 30 days, …”. Most lawyers will use 15 or 30 days as the survivorship period.
The survivorship clause is intended (and used) to minimize legal process and possible probate fees where two individuals may perish in a common accident or die with short period of time of each other.
For example, assume John Doe and Jane Doe are a married couple. John and Jane have Wills that provide that all estate assets will go to the surviving spouse if one of them dies and to their children on the death of the second spouse.
Now, assume John and Jane were in a car accident where John died on the scene and Jane died 5 days after the accident. If the Will did not contain a survivorship clause, all of John’s assets would have to be transferred into Jane’s estate first and only then be distributed to the beneficiaries of Jane’s estate (i.e. children). Given that Jane would have been entitled to all of John’s assets, such assets will also be probated twice within a short period of time – once in John’s estate and then again in Jane’s estate.
If John’s Will contained a survivorship clause, John’s assets can be distributed directly to the children, because Jane did not survive John by a specified period (i.e. 30 days from example in first paragraph above). John’s assets will also be probated once only, as they will not flow through Jane’s estate.
A lawyer will want to know all names that a person has used in the past, either as a legal name or as nicknames, which are often referred to as “AKAs” or “also known as”.
The reason a lawyer will want to capture all names used is to avoid issues and delays where previously used name is not included in the Will or another document but the person has an account under such name.
For example, assume the person’s full legal name is Robert John Smith but the person has always been known to friends and others as Bob Smith and has set-up various bank accounts under Bob Smith. When the person dies and the grant of probate only includes Robert John Smith, the bank may want additional information or proof that Robert John Smith shown in the grant of probate is the same person as Bob Smith shown on the account at the bank, which will lead to additional delays for the executor(s). If the Will (and subsequently the grant of probate) includes Robert John Smith (also known as Bob Smith), it will be clear that the person has used several names and may have accounts under such different names.
A Power of Attorney is a legal document that authorizes another person to act on your behalf. A Power of Attorney typically deals with legal, financial, and property decisions. A separate document should be prepared to appoint another person to make decisions on your behalf in respect of health and medical care, which is often referred to as a Health Care Proxy Appointment, or Health Care Directive, or a Living Will.
Wondering why you should have a Power of Attorney? Check out next question below.
TIP: There are different types of Powers of Attorney and you should consult appropriate advisers to prepare the appropriate Power of Attorney for your circumstances.
If you become mentally incompetent without a Power of Attorney in place, no one has authority to act on your behalf in respect of your affairs. Yes, that means not even your spouse or common-law partner or parent. If you do not have a Power of Attorney, it may be necessary to file a court application to obtain a committeeship order to authorize someone to act on your behalf, which is an expensive and at times lengthy process.
Concerned about signing a Power of Attorney and giving someone immediate authority to deal with your affairs? Check out the question below regarding a Springing Power of Attorney.
A springing power of attorney means a power of attorney which comes into effect on a specific date or occurrence of a specific event.
The person making the power of attorney (often referred to as the donor) can designate who can declare that the ‘specific event’ has occurred.
Most often, a springing power of attorney will be prepared to indicate that it only comes into effect on mental incompetence – i.e. upon one or more medical doctors making a declaration that the person (i.e. the donor) has lost capacity to take care of person’s own affairs.
An enduring power of attorney means a power of attorney that is not terminated by the mental incompetence of the person (i.e. the donor).
Although a power of attorney is often prepared as a springing power of attorney, it is possible to have the power of attorney come into effect immediately upon execution by the donor. If that was the case, the power of attorney will be automatically terminated by the mental incompetence of the donor unless it is an enduring power of attorney.
Only individuals holding certain positions can act as a witness to your execution of an enduring power of attorney:
- an individual registered, or qualified to be registered, under section 3 of The Marriage Act (Manitoba) to solemnize marriages
- a judge
- a justice of the peace
- a medical doctor
- a notary public
- a lawyer
- an RCMP officer
- a police officer
Yes. In some circumstances, it may be advisable to have separate powers of attorney for different purposes. For example, you may have a general power of attorney and also a specific power of attorney authorizing someone to deal with a specific property.
TIP: If you are planning to have multiple powers of attorney, you should ensure that one of them does not inadvertently revoke all prior powers of attorney.
- Gather information on assets and liabilities.
- Consider estate planning objectives.
- Determine how to achieve estate planning objectives based on available assets. (TIP: don’t forget to account for taxes that may be applicable on death)
- Consider and select the right person(s) to carry out the administration of the estate.
- Consult with appropriate advisors to implement the estate plan.
- Review the estate plan every 3-4 years or anytime there are significant changes in your life or anyone involved in the estate plan (whether as a beneficiary or executor).
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