Estate Planning 101 – Getting Started (Revised, October 2012) Laurie S. Redden, Deputy Public Guardian and Trustee & General Counsel; Monique Charlebois, Estates Counsel; Office of the Public Guardian and Trustee, Ministry of the Attorney General Originally presented at MAG/ ALOC Lunch ‘ Learn, September 11, 2012

Planning Considerations Make a checklist of: – All of your assets & liabilities, including full details of amounts, account numbers, financial institution and branch, location of safety deposit box & key; – Name and address of your spouse; details of any previous marriage and/or divorce; – Names, birthdates and addresses of your children; – Names and addresses of other significant persons; – Names and addresses of parents, if living. – and social media accounts and passwords.

What is a general power of attorney? A power of attorney is a document by which a person (donor) may appoint an agent (attorney) to do a specific act or generally act on the person’s behalf for a fixed period of time. For example, a specific act may be to sign a document or documents in a transaction; a general power would be to act while the person was out of Canada for a six-month specified period. A general power of attorney is made under the Powers of Attorney Act. A general power of attorney terminates on the incapacity of the donor. Typically, a general power of attorney is most often used in commercial transactions, to allow an agent to perform a specific act.

Continuing Powers of Attorney A “continuing power of attorney” is made under the Substitute Decisions Act, 1992; It is called “continuing”, because this power of attorney may be used subsequent to the incapacity of the donor; A continuing power of attorney may be made by a donor to grant authority over property of the donor; or to convey authority to the attorney to make personal care decisions relating to the donor if the donor becomes incapable of personal care;

Test of Capacity to grant a Continuing Power of Attorney for Property Section 8, Substitute Decisions Act, 1992: “8. (1) A person is capable of giving a continuing power of attorney if he or she, (a) knows what kind of property he or she has and its approximate value; (b) is aware of obligations owed to his or her dependants; (c) 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; (d) knows that the attorney must account for his or her dealings with the person’s property; (e) knows that he or she may, if capable, revoke the continuing power of attorney; (f) appreciates that unless the attorney manages the property prudently its value may decline; and (g) appreciates the possibility that the attorney could misuse the authority given to him or her. (2) A person is capable of revoking a continuing power of attorney if he or she is capable of giving one.”

Test of Capacity to grant a Continuing Power of Attorney for Personal Care Section 47, Substitute Decisions Act: “47. (1) A person is capable of giving a power of attorney for personal care if the person, (a) has the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and (b) appreciates that the person may need to have the proposed attorney make decisions for the person. (2) A power of attorney for personal care is valid if, at the time it was executed, the grantor was capable of giving it even if the grantor is incapable of personal care. 1992, c. 30, s. 47 (2). (3) A person is capable of revoking a power of attorney for personal care if he or she is capable of giving one. (4) Instructions contained in a power of attorney for personal care with respect to a decision the attorney is authorized to make are valid if, at the time the power of attorney was executed, the grantor had the capacity to make the decision. “

When does a Continuing Power of Attorney come into effect? Continuing power of attorney for property may come into effect immediately; or “ 7. (7) The continuing power of attorney may provide that it comes into effect on a specified date or when a specified contingency happens. “ The ‘specified contingency’ may be when you become incapable, but who will determine that you have become incapable? Continuing Power of Attorney for personal care: “49. (1) A provision in a power of attorney for personal care that confers authority to make a decision concerning the grantor’s personal care is effective to authorize the attorney to make the decision if, (a) the Health Care Consent Act, 1996 applies to the decision and that Act authorizes the attorney to make the decision; or (b) the Health Care Consent Act, 1996 does not apply to the decision and the attorney has reasonable grounds to believe that the grantor is incapable of making the decision, subject to any condition in the power of attorney that prevents the attorney from making the decision unless the fact that the grantor is incapable of personal care has been confirmed. “

Power of Attorney Kits OR Download a free power of attorney kit from one of the links above. The kit includes instructions and forms for a continuing power of attorney for property and a continuing power of attorney for personal care; Take note of the required number of witnesses and who cannot be a witness or cannot act as your attorney; Ensure your attorney knows where you keep your document and has access to it when needed.

“Living Wills” and Advance Directives A “living Will” or “advance directive” is directions from the person as to a course of action or inaction in the event the person becomes ill. The directions may be specific actions to take or not take in the event of a specified illness or condition. A living Will or advance directive is binding on the person who has authority to make health decisions on behalf of the person during his or her incapacity to do so: Health Care Consent Act, s. 5: “5. (1) A person may, while capable, express wishes with respect to treatment, admission to a care facility or a personal assistance service. (2) Wishes may be expressed in a power of attorney, in a form prescribed by the regulations, in any other written form, orally or in any other manner. (3) Later wishes expressed while capable prevail over earlier wishes.” It is important to ensure that the appropriate persons are aware of your wishes.

What is a legal Will in Ontario? Governed by the Succession Law Reform Act In writing and signed Original, not a copy- or presumption of revocation will apply in the absence of evidence to the contrary. While possession testamentary capacity (legal test) and not subject to undue influence Clear intention to do a testamentary document– not just notes These rules may be different in other provinces or countries. Foreign Will may still be valid in Ontario.

Types of Wills 1.Holograph: Entirely in testator’s own handwriting (SLRA, s.6). Does not require any witness. Must be signed at the end, & probate requires affidavit as to handwriting. 2. ‘Solicitor’s Will’ & printed form ‘Stationer’s Will’: For any typing to be considered to be incorporated in a valid Will, the document must be signed by testator or at his/her direction. With two or more witnesses present at same time and with the testator when the testator signs it. Probate requires witness’ affidavit, best done around the same time the Will is signed. If not available, proof of signature is required. If a beneficiary is a witness, the bequest to the beneficiary or their spouse will be void – but not necessarily the entire Will.

A Will is revoked by a subsequent marriage.(SLRA,s.15) A bequest to a spouse or appointment of spouse as executor is revoked by divorce (SLRA, s.17) (unless the Will specifies otherwise), but otherwise the Will is still valid. Alterations and additions must follow the same rules of validity of a Will. That is if the Will contains typing, any alterations or additions must be properly witnessed. Moral: don’t take chances. Get a proper codicil done. If a named beneficiary predeceased, that share goes to the residue or on an intestacy, unless the Will says otherwise (e.g. naming an alternate). BUT if that deceased heir was a child, grandchild, brother or sister of testator, SLRA s.31 passes it on to their spouse and/or descendants – again, unless the Will says otherwise. Important ‘bits’

No Will: who inherits? Spouse takes all if no issue or estate value under $200,000.[SLRA s.44] (‘spouse’s preferential share’) Shared between spouse and any issue, if value over $200,000.[SLRA s.45 & 46] Spouse now includes same-sex marriage. Note: a common law spouse is NOT an heir, but may have claim for support if financially dependent. Then parents, if surviving. If none of the above: estate goes to siblings, and children of predeceased siblings. These rules vary among the provinces. Relatives by marriage, stepchildren or children adopted away cannot be heirs on an intestacy.

No Will and none of the above… SLRA s.47(7) ‘to next of kin of equal degree of consanguinity’- there a chart to count degrees….(no ‘app’ yet). ‘equally’ within those of the same rank. ‘without representation’: must have survived the deceased. Aunts and uncles rank ahead of cousins. Great-nephew or niece is equal to a cousin. If no kin located 10 yrs after death, estate escheats to the Crown.

Why have a Will? To give effect to your wishes To protect children & other dependents To try to choose the person who will take care of your estate To facilitate and speed up the administration of the estate To reduce costs (e.g. bond of administration & estate administration taxes)

When should I re-do or review my Will? In contemplation of marriage, especially a 2 nd marriage. After divorce. Upon birth of children or death of a beneficiary. Other life milestones or upon acquiring or divesting of significant assets.

Why can’t I do it myself? High risk of error; could be ineffective result, confusion, heartache and costly to repair. Additional procedural hurdles when probating Will ‘kits’ & holograph Wills. Benefit of estate planning advice, coordination with insurance and pension designations etc. The PGT has seen numerous examples of problems and errors due to testator’s excess frugality. YOU GET WHAT YOU PAY FOR!....But be cautious, double check, ask questions.