Legislatia canadiana - What is a Will or Power of Attorney, and why should you have one?
SURSA DUMNEAVOASTRA DE ESTATES SI REAL ESTATE LAW
Will
A Will is a legal document which provides for the transfer of your property and care for minor children in accordance with your wishes. The Will (and, therefore, any transfers of property to be effected according to its terms) becomes effective only upon the death of the individual. Contrary to popular belief, a Will cannot be drafted for two people, as each person must have their own separate Will.
Everybody should have a Will and do some estate planning, not just the wealthy individuals. Here are a few reasons why you should have a will:
- You decide who receives your assets after death, and who should not receive your assets after death (even though they are related to you);
- You decide who should be your executor (the person who should administer your estate);
- You can identify a guardian for your children;
- You can express your wishes regarding the type of funeral or celebration of life you wish to have;
- You save your beneficiaries a lot of headache, as administering someone’s estate with a will is a lot simpler than if they did not have a will;
- You save your beneficiaries money by having the estate pay less taxes.
Powers of Attorney
In contrast, a Power of Attorney is a legal document in which you appoint someone to make decisions on your behalf, in case you lose capacity to make such decisions on your own while you are alive. There are two types of Powers of Attorney: for Property and for Personal Care. Through the Power of Attorney for Property, you appoint someone to handle your financial affairs on your behalf (banking, buying or selling real estate/personal property, taking loans, filing your taxes, etc.). Through the Power of Attorney for Personal Care, you appoint someone to make personal care decisions on your behalf (medical treatment, ability to request medical exams and to see the results, diet, clothing, hygiene, clothing).
You cannot combine the two types of Powers of Attorney into one document, and two people cannot have one Power of Attorney; each person must have their own Power of Attorney. I strongly recommend that you prepare both a Power of Attorney for Care and Property, as they each address different needs in your life. People often make their Powers of Attorney at the same time as they make their Will.
Here are some reasons to have Powers of Attorney:
- You select the person who should be your “attorney” and make personal care and property decisions on your behalf; otherwise, this person is appointed according to the law, which might not be in accordance to your preference;
- You can have a conversation with your attorney regarding your preferences with respect to your personal care and money;
- You will have to go through a capacity assessment and somebody will have to apply to court to become a guardian of your property; since these processes are expensive and take a long time to do, it will prejudice you until the guardian of property is appointed.
Therefore, since the Powers of Attorney take effect during your lifetime and become void on your death, while the Will takes effect after you pass away but has no legal effect while you are alive, it is important to have all these documents prepared for a complete set of estate planning tools. You can change any of these documents at any point during your lifetime if your wishes change.
If you have any questions about this topic, I would love to help!
PLEASE NOTE THAT THE CONTENT OF THIS BLOG IS MERELY FOR INFORMATION PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.
Raluca M. Soica, BBA, CPA, CMA, JD
Barrister & Solicitor
647.280.6497
info@rms-law.ca
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Raluca M. Soica 9/10/2020 |
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