END OF LIFE AND ESTATE PLANNING

Presented by Lise Poratto-Mason

Why have an Estate Plan?

Helps to protect the value of your estate Focuses on the distribution of your assets after death To reduce taxes now, for the surviving spouse, and at death To reduce taxes for beneficiaries after your death Reduces estate administration costs Minimizes burden on beneficiaries To ensure that your objectives are clear, realistic and that

they will be attained

Getting Started

Begin by organizing what is needed -

Determine your objectives Take inventory of your assets Estimate your outstanding debts Prepare a list of family members / beneficiaries Decide how assets will be distributed - immediate or

through a trust?

Components of your Estate Plan

Common elements to be considered for most estate plans are -

Valid and current Wills Powers of Attorney Ownership structures, such as Joint Tenancy With Right of

Survivorship Trusts Taxes at death and effective probate planning Beneficiary designations

WILLS AND WILL PLANNING

The benefits of thinking ahead:

Wills - a difficult topic for discussion

Wills can often be a difficult topic to deal with

Can often be delayed and put off until ‘later’

Necessity for a Will can be understated or overlooked

Why have a Will?

Ensures your property will be distributed according to your wishes

Enables you to name a guardian for minor children Relieves the burden of decision-making for those left behind With no Will, you are considered to have passed away

‘intestate’ and assets may be otherwise distributed based on provincial legislation

Wills are not only for the wealthy

A common misconception is that Wills are:

Just for the wealthy

Just for those with significant assets

Just for those in latter stages of life

Where to start?

Begin by organizing what is needed -

Determine your objectives: Who do you want to get your possessions when you die? Who do you want to be in charge of your Estate (Estate Trustee / Executor)

Take inventory of your assets (the lawyer needs to know what you own; home, cottage, RRSP, RIFF, life insurance and business)

The present structure of your affairs directly affects your estate

Estimate your outstanding debts Prepare a list of family members / beneficiaries Decide who you want to name to care for your minor children

(Guardian) Decide who will take over if your beneficiary, estate trustee or

guardian dies before you do Decide if you want to make a gift to a charity (Planned Gifts).

There are significant tax credits which may reduce the net cost of a donation to approximately 30 cents on a dollar

Decide on the preparation of insurance designations

Legal preparation is recommended

A lawyer’s expertise and professionalism is recommended -

Ensures that your wishes are executed in an organized and timely fashion

Lawyer may work with your accountant or investment advisor to enable tax-effective distribution

Choosing an Executor

The role of executor is an important one -

Executor oversees distribution of assets as described in your Will Executor can be spouse, adult child, relative, friend, trust

company or lawyer Executor takes care of financial and tax issues on your behalf Should be someone familiar with your estate and your family Always seek their permission to ensure they are prepared to act

for you Executors are entitled to compensation at the rate of about 5% of

the value of the estate; is that what you want?

Keep your Will updated

Make sure your Will reflects your current situation

Major life events can change original choices in Will

Changes in the nature or value of your assets can affect current Will

A Will - is the cornerstone of any estate plan

Each adult should maintain a Will throughout their lifetime A Will is the cornerstone of proper estate plan A Will is a legal document ensuring distribution of your estate as

you have specified and clearly states your objectives A Will gives you the peace of mind that you’ve done all you can

to make the lives of those you care about the most easier when you’re no longer here

A Testamentary Trust is a significant tax reduction strategy which must be provided for in your Will

Provisions must be made for disabled beneficiaries

Insurance Designations

Insurance proceeds may be an important element of your estate

The Insurance Designation must be reviewed to ensure that it will not increase probate fees and that the tax benefit of a testamentary trust is available

POWERS OF ATTORNEY

Definition

A power of attorney is an authority given by one person (the grantor or principal) to another person (the attorney) to act on behalf of the grantor in conducting his or her financial affairs or in making personal decisions for the grantor.

General Principles

The attorney appointed by a power of attorney acts as a fiduciary and, as such, must account, must use reasonable care in acting, must not act in conflict with the grantor’s interests and must not make secret profits.

Capacity

The grantor has capacity to appoint an attorney for property if he or she is at least eighteen years old and:

knows what kind of property he or she has and its approximate value;

is aware of obligations owed to his or her dependants; knows that the attorney will be able to do on the person’s

behalf anything in respect of property that the person could do if capable, except make a Will, subject to the conditions and restrictions set out in the power of attorney

Knows that the attorney must account for his or her dealings with the person’s property;

knows that he or she may, if capable, revoke the continuing power of attorney;

appreciates that unless the attorney manages the property prudently, its value may decline; and

appreciates the possibility that the attorney could misuse the authority given to him or her.

The standard is not quite so high for appointing an attorney for personal care. The grantor must be at least sixteen years old and:

have the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and

appreciate that the person may need to have the proposed attorney make decisions for the person.

The attorney for personal care so appointed must be at least sixteen years old.

Why have a Power of Attorney

A continuing power of attorney for property is obviously most useful if the grantor should become incapacitated.

By signing such a document while still capable, the grantor personally selects the most trusted and responsible person to act on his or her behalf in this situation.

Forms and Execution Conditions and Restrictions Multiple Authorizations Standard of Care and Accounting Responsibilities Termination Revocation

Authorized Expenditures, Gifts and Loans Power of Attorney for Personal Care Compensation for Attorneys Combined Forms Will Contents Assets in Other Jurisdictions