3. Estate Planning Topics: 1.Wills & WESA ( Wills, Estates & Succession Act) 2.Powers of Attorney 3.Representation Agreements 4.Probate 5.Trusts

4. Why have a Will? Control who gets what. Select guardians for minors. Establish testamentary trusts. Less expensive and time consuming than intestacy. Less emotional distress for survivors.

5. Wills do not apply to: Insurance Policies, Pension Plans, RRSPs and RIFFs if there are named beneficiaries Trusts Assets held “jointly” (recent case law?) – Real estate – Bank accounts – Investment accounts

6. Changes to GENERAL WILLS PROVISIONS Under WESA

7. WESA – Wills, Estates & Succession Act Effective sometime/maybe 2012 Repeals Estate Administration Act. Probate Recognition Act, Wills Act, Wills Variation Act and select sections of miscellaneous other Acts “Will- Maker”

8. Minimum Age For Making A Will Lowered Present Wills Act Section 7.1: A will made by a person who is under 19 years of age is not valid unless the person is or has been married WESA Section 36.1: A person who is 16 years of age or older and who is mentally capable of doing so may make a will.

9. Marriage No Longer Revokes a Prior Will Present Wills Act Section 15: A will is revoked by the marriage of the testator, unless made in anticipation of marriage. WESA Eliminated

10. Minimum Age To Witness A Will Increased Present Wills Act No age requirement WESA Section 40.1: Signing witnesses to a will-maker’s signature must be 19 years of age or older.

11. No Longer Presumption of Oldest Dying First Present Wills Act Where you cannot determine order of death oldest deemed to have died first. WESA Both deemed to have survived the other – therefore assets tenants in common.

12. Two Spouses Issue Present Wills Act You can have two spouses even though have not lived as husband and wife for years. WESA Cease to be spouses upon divorce, triggering event, 2 yrs apart or relationship ended(??).

13. Intestate Provision for Spouses Share Present Estate Administration Act Principal Residence to spouse (life estate) if not joint tenancy and $65,000 to spouse then sharing balance with children. WESA $65,000 increased to $300,000

14. Intestate Provision Common Disaster Present Estate Administration Act One side of your extended family could get the entire estate. WESA Both sides of your extended family would share the estate.

15. Rectification of Wills under WESA Section 59, WESA 15

16. Overview: 16 1.Formal requirements of Wills are not gone, but are eased. 2.Under Division 5 (sections 58, and 59), Wills can be ‘cured’ or ‘rectified’. 3.Attempt to more effectively reflect the intentions of the Will-Maker but opens door to litigation

17. Rectification must be by court order 17 Court may order rectification if: “the court determines that the will fails to carry out the will-maker’s intentions because of” certain factors (s.59).

18. Factors: 18 Error from “an accidental slip or omission” “misunderstanding of the will-maker’s instructions” or “failure to carry out the will-maker’s instructions”

19. How do you prove it? 19 Subsection 59(2): “Extrinsic evidence, including evidence of the will-maker's intent, is admissible to prove the existence of a circumstance described in subsection (1)” “Extrinsic evidence” = pretty much anything, and can include purely oral evidence!

20. Things to think about Guardian For Minor Children: – Do they need a bigger house? – Appoint relative not necessarily with the in-law spouse – Is guardian and executor/trustee the same? Executor/Executrix: – Onerous job: “Only people that agree to act as executor/executrix are those that have not done it before” – Takes a couple of years to wrap up estate completely – Careful when appointing co-executors – Consider using a professional

21. Standard Will formats Young family with Children: – To spouse and then trusts for children with release dates of 25 and 30 – May convert to individual trusts once children are adults Baby Boomers: – To spouse then part to charity(?) then to children (grandchildren) 2 nd Marriages – May create life estate if one spouse comes with children and more assets. To spouse during his/her life time then to children. Always need to address common disaster

22. Power Of Attorney A Power of Attorney is a legal document appointing an “Attorney”, to make financial and legal decisions on behalf of another. A POA can be general or very specific: - for certain time only - for certain purpose only. For couples recommend appointing two Attorneys.

23. Representation Agreement A Representation Agreement is a legal document appointing a “Representative”, to make personal care and health care decisions on behalf of another. Again recommend couples appoint two representatives. Second representative often different from a spouse’s choice. Section 7 vs. Section 9 Agreements

24. An Ageing Population Over 65 in 2009 = 4.7 million = 14% Over 65 in 2031 = estimated between 9.9 and 10.9 million = 25% of estimated population

25. The BC Ministry of Health reports that only 10% of deaths are of a sudden nature. Most of us will die having lived for some time with a chronic condition – e.g. Cancer, Alzheimer’s, Multiple Sclerosis, Parkinson’s. Planning for future care should reflect this reality – POA, Rep. Agreement, Insurance.

27. Probate Executor makes a court application (desk order - usually with the assistance of a lawyer) to have the validity of the Will “proved”. A Grant of Probate is required in order to have the estate property and financial assets transferred to the beneficiaries. Executor must provide the court with details of the estate assets, liabilities and beneficiaries. Probate fees are payable to the Minister of Finance and are calculated at approximately 1.4% of the value of the estate assets. Probate application process can take approximately 6 months from the date of death (but can be much longer depending on the complexity of the estate). Executors should NOT distribute the estate assets to the beneficiaries for at least 6 months following the Grant of Probate and not until a tax clearance certificate has been issued from the CRA clearing the executor from any tax liability on behalf of the estate.

28. Avoiding Probate Having beneficiaries (other than estate) named in RRSPs, RRIFs, TFSAs, Life Insurance, Pension Plan policies. Owning property or other banking accounts jointly with spouse (owning jointly with children can be risky and recommend trust declaration). Transferring assets to beneficiaries before death. Through the use of Trusts.

29. Death and Incompetency and the Sale of Real Estate If person has died you need to have probate to close a sale – you can request a rush process You can have executor sign listing and make it subject to probate but need to have an “on or before date” to create certainty of contract If person is incompetent make sure Power of Attorney is reviewed by lawyer

30. Trusts Spousal Trust Alter Ego or Joint Partner Trust (over 65) Disability (Hanson) Trust Charitable Remainder Trust Insurance Trust Testamentary Trust for Children Family Trust

31. Objective of Trusts: Avoid probate fees. Avoid taxes. Preserve government benefits. May avoid claims of creditors subject to challenge under Fraudulent Conveyancing legislation. May avoid Wills Variation Act and Family Relations Act claims subject to challenge based on capacity or undue influence or piercing the trust veil – (black sheep, addiction, spendthrift child, 2 nd marriage spouse) Contribute to charity. Freeze estate and split income.