Estate Planning 101
Last Will and Testament (“Will”)
Plan for what happens after your death
In a Will, you, the testator/testatrix, set out who you want to give your property to (your beneficiaries) and who you want to have guardianship of your children after your death. You can also make requests for funeral arrangements.
Typically, you appoint a trusted person as your “personal representative” which gives them the powers and responsibilities to execute your wishes.
If you do not have a Will, your administrator, another type of personal representative, is determined through legislation and must be approved by the court. There is a priority set out by the government but if there are multiple people with the same priority the administrator must have signed renunciations from the rest. This can be an issue where more than one person wants to be the administrator and does not want to share, or where families are not in contact with one another and cannot get signed renunciations.
Once an administrator is chosen the process of being approved by the court as a personal representative is generally the same for an administrator as it is for an executor. The other major difference is that the deceased’s property is distributed to their family through the “intestacy rules” created by the government rather than according to personalized wishes written in a Will.
Enduring Power of Attorney (“EPA”)
Give someone authority to manage your legal and financial affairs
Note: “Attorney” in Canada means a person appointed under an EPA. It does not mean “lawyer” here like it does in the United States.
An EPA allows a Donor, you, to appoint someone as your attorney. Once the EPA Your attorney then has authority to manage your legal and financial affairs.
An EPA can be drafted to appoint an attorney immediately, even while the donor still has capacity (An “immediate EPA”), or so that it takes effect only when/if the donor loses capacity (a “springing EPA”). An immediate EPA allows both the donor and the attorney to manage the financial affairs.
If you do not have an EPA in place and you lose capacity, someone must apply for an order under the Adult Guardianship and Trusteeship Act and become appointed as a trustee before they can make financial decisions on your behalf.
Personal Directive (“PD”) aka “living will”
Give someone authority to make medical and personal decisions for you if you become incapacitated
A PD allows a “maker”, you, to appoint someone as your “agent”. The agent has the authority to make decisions about non-financial matters such as medical decisions, residence and personal activities. It only comes into effect if the maker has become incapacitated and loses effect when and if you regain capacity.
If you do not have a PD and you are incapacitated and in need of medical treatment someone must apply for an order under the Adult Guardianship and Trusteeship Act to become appointed as your guardian before they can make medical decisions on your behalf.