Basics of Estate Planning Housekeeping Introduce myself Introduce topic Goal: to get a good, basic understanding of what you need to do to prepare for the future Presented by Butler Wills and Estates Consulting Services

Be proactive!

Why bother with estate planning?

Two sides to estate planning What will happen Passing away What might happen Incapacity There are two sides to estate planning – what we know will happen (death) and what we don’t know for sure will happen, but might (incapacity) Define incapacity There are 3 basic documents that we all should have to address these estate planning questions What they all have in common is that we make them while we’re healthy but don’t use them until we need them

What to do Will Enduring Power of Attorney Advance Health Care Directive

A will is a document that sets out your instructions for distribution of your estate after you pass away. Start with will Definition We are going to compare what happens when you die with a will, and what happens when you die without one, to illustrate some of the main things a will does for you

Sounds simple, but… Your will must be in writing – not videotaped. Must be witnessed by two people who are adults and not beneficiaries. Hand-written wills are valid in Newfoundland and Labrador.

You must have mental capacity to make or change your will. It doesn’t have to be perfect.

If you have no valid will… What happens?

Distribution of assets With a will Without a will You decide who gets what from your estate If you are married with no children, your spouse gets everything If you are married with one child, half goes to your spouse and half to the child If you are married with more than one child, 1/3 goes to your spouse and the rest to the children Your will sets out who gets what With a will: You decide You can include anyone important to you, such as friends, parents, charities You can give away specific things to specific ppl Without a will: Court decides who gets what Spouse doesn’t get it all if you have kids

Intestacy law says that “child” includes biological and adopted All ages included Does not include step-children In a previous slide, I mentioned that the children will share some of the estate on intestacy. Includes biological and adopted but not steps. If you make a will you can include who you want, as long as you meet dependent relief requirements.

People are generally not aware that in NL, common laws have ZERO inheritance rights. In Newfoundland and Labrador, common law spouses have no inheritance rights whatsoever.

Choice of executor You choose who will be your executor With a will Without a will You choose who will be your executor You can choose an alternate in case your first choice can’t do it The court will decide who will be appointed to look after your estate Sometimes nobody comes forward With a will: Choose who you want Discuss your values and goals with them Choose an alternate Decide whether they’re to be paid & how much You can smooth the way by leaving instructions and powers Without a will: No say in who steps up Maybe nobody steps up No say in how much they are paid Always more court applications for permissions

A court process that confirms the will and the executor appointment In NL, the cost is 0.6% of the estate What is Probate? Definition of probate Not every will is probated. Depends on: Type of assets How assets are held Value of estate How good the will is

The executor submits the original will, an inventory of the estate, and a set of documents that describes the deceased’s family, as well as other information

Not every will must go to probate Depends on: The type of asset How assets are held The value of assets Any issues with the will itself

What’s in the estate and what’s not?

In the estate Anything and everything the deceased owned in his or her own name.

Not in the estate Joint property where the other owner is still alive House, cabin Bank account Assets which have a named beneficiary RRSP RRIF Life insurance Pension

Should you try to Avoid probate?

Beware of adding kids to your title When adult children are added as joint owners of their parents’ assets, this does NOT avoid probate! An important caution about adding kids to title Risks to parents Tax problems Doesn’t even avoid probate Causes disputes on a regular basis

The risks of adding kids to assets… You could lose your home or other asset if your child: Gets divorced Is sued Has a business failure You cannot sell or mortgage your home without your child’s consent

Who can challenge a will? Married spouse Children under 19 Adult children with a handicap that prevents them from earning a living Who can challenge a will? Contesting a will Some ppl automatically entitled to support: Married spouse Minors Handicapped adult children In other situations, ppl can contest if: No mental capacity Undue influence

Enduring Power of Attorney

You appoint someone to make financial and property decisions for you if you become unable to do that for yourself. Define EPA Can be immediate or springing Handing over a lot of power – describe some of the things an attorney can do Can be personalized to your situation A good tool when what you want to give is access, not ownership

What if you don’t have one? With POA Without POA You choose who represents you You place limits if you want to You give instructions about matters that are important to you You have no say in any of it The court may make an order naming someone to take charge of your decisions The Public Trustee may take over your decision- making With EPA/HCD: Your choice of representative You place limits You give instructions Without: No say in who speaks for you No control over what people can do Can be extremely invasive expensive

Advance Healthcare Directive

You appoint someone to make health, medical, and personal decisions for you if you become unable to do that for yourself. A chance for you to present your views on what you want to have happen medically if you can’t speak for yourself Includes end of life decision Prevents emotional disputes between the kids

You can leave instructions about: end-of-life care Living at home vs living in care Organ and tissue donation Restrictions on procedures or treatments you don’t want

What if you don’t have one? With AHCD Without AHCD You choose who represents you You give instructions about matters that are important to you, including end-of-life decisions You have no say in any of it The court may make an order naming someone as your guardian Your family may argue over your care or treatment With EPA/HCD: Your choice of representative You place limits You give instructions Without: No say in who speaks for you No control over what people can do Can be extremely invasive expensive

How we can help

In-house seminars Will drafting How we can help: Will review of existing will, given in writing if requested Drafting of wills, epa, hcd No billable hours

One-time consultation Apply for probate One-time consultation We do probate and admin applications One time consultation on any estate related matter such as: Should I sign a release Review of executor’s accounting Legal opinion on validity of deceased’s will

Executor rescue Books and kits Executor rescue – we will take on executor tasks to give as much or as little help as the executor wants Books and kits and guides

Be sure to check out our blog at www. estatelawcanada. blogspot Be sure to check out our blog at www.estatelawcanada.blogspot.ca for tons of information on estate planning and many other topics! Point out blog address Invite any questions or comments on anything we covered in the presentation Questions about estates in general? Questions?