You have worked hard to build your assets and wealth over your lifetime. We assist clients in planning for the smooth transition of this wealth and for the maximum benefit of the beneficiaries. This involves a detailed review of a client’s estate planning goals, family circumstances and current assets and liabilities, and the existing legal and moral obligations you may have, often resulting in recommendations that may result in further discussions and considerations but may ultimately be included in the estate planning documents.
The basic estate planning documents include a Will, an Enduring Power of Attorney and a Personal Directive.
Preservation of your assets and protecting your wishes for your estate begins with having a Will. A Will contains a testators wishes for how their assets will be administered and by whom, who will receive the estate when the testator dies and when those beneficiaries will receive their share of the estate. When a person dies without a Will, the Wills and Succession Act, Part 3 outlines who will receive your estate and when. The distribution of your estate outlined by the WSA may not align with your wishes for the distribution of your estate. The WSA also provides a priority of people who are entitled to apply to be the Personal Representative of your estate. This may not be the person you would have named in your Will. Accordingly, it is important to detail who will be your Personal Representative and what the distribution of your estate will look like.
Protection of assets for the benefit of your beneficiaries may involve the use of testamentary trusts which may be for a limited period of time or for an extended period of time to allow for the management of a beneficiary’s share of the estate for their benefit. If you have minor beneficiaries or adult beneficiaries who may be unable to manage their own affairs, you may wish to consider a trust within your Will, to allow for your beneficiary to have the benefit of their share without the burden of managing that share. Blended families may choose to use a trust for the benefit of the surviving spouse, but preserving any remaining assets for the benefit of their respective heirs. Families who support elderly family members may also choose to do so through the use of a testamentary trust.
The Enduring Power of Attorney
An Enduring Power of Attorney (EPA) designates someone (an Attorney) to manage your financial affairs at such time as you (the Donor) may designate. Loss of mental capacity is a common triggering event for EPA’s although in Alberta, an EPA may be active immediately upon signature, at a later time as designated by the Donor or upon the loss of capacity as declared by two medical doctors. The EPA may also specify actions an Attorney may take in the management of the Donor’s estate, and who may benefit from the Donor’s estate during their lifetime. EPA’s cease to be effective upon the death of the donor. If you lose the ability to manage your own financial affairs and do not have an EPA, an application to the Court to appoint a Trustee of your financial affairs will likely be necessary. This can be a lengthy process and the Trustee appointed by the Court may not be who you would choose.
The Personal Directive
A Personal Directive (PD) designates someone (an Agent) to manage your non-financial decisions in the event you cannot make those decisions for yourself. These non-financial decisions may fall under the following headings:
- Health care
- Where you may live
- Who you may live with
- Who you may interact with and socialize
- Activities you may participate in such as educational, social, employment, etc
- Legal Matters that don’t relate to your estate
Trusts are a valuable estate planning tool to assist in the protection and transition of assets. Trusts can be used within your Will (testamentary trust), or outside your Will (inter vivos trusts). Trusts are typically used for very specific and deliberate reasons, which should be carefully considered before implementation. We work with your trusted accounting and tax advisors to establish testamentary trusts and/or inter vivos trusts as part of your overall estate plan and to ensure they are right for you.
We also provide Trustees with advice regarding the administration of trusts, which might include, management of assets within the trust, distributions and reporting to beneficiaries, reorganizations of the trust, amendments to the trust, winding up of the trust and/or any questions arising which may require the advice and direction of the Court.
Please contact our office for more information.
Although these are general categories under which decisions may be made, it is important to consider whether or not you wish to include specific instructions or preferences within your Personal Directive to assist your Agent to make the decision you would have made, had you been able to. If you do not have a Personal Directive and you are no longer able to make your own personal decisions, an Application to the Court may be necessary to have a Guardian appointed for you. As mentioned above, this can be a lengthy process and may not result in the appointment of the person you would have chosen to be your Guardian.
It is very important to carefully consider who you designate in each of these documents and it need not be the same. The person you believe would competently manage your financial affairs may or may not be the person who you wish to make your non-financial decisions.
Sometimes problems arise when an Attorney or Agent does not act appropriately. Please see our Power of Attorney and Personal Directive litigation section for further information.