Estate Plan Preparation in Ottawa, ON

• Ensure you have a properly drafted will that is fully up-to-date.
• Set up a continuing power of attorney for property and a power of attorney for personal care.
• Create a list of all assets. Keep it and all other important information with your will, or inform your executor where it is.
• Ensure that your executor and backup executor, and any guardian and any person named on your powers of attorney, knows where the original copy of your will and powers of attorney are kept.
• Make sure the titles for your real estate do not conflict with the estate-planning provisions of your will.
• You should also review all of the above at least every three years.
• You should consider a guardianship clause in your will and possibly in a power of attorney for property ensuring the continuation of adequate representation and care for any minor children you have in the event you become incapacitated or die

A new will automatically revokes or cancels any earlier will. To avoid confusion, the holder of the earlier will should be notified of the new one.

Choose someone you will feel comfortable to have “standing in your shoes,” Someone who has views and values similar to your own.

If there are minor children, choosing someone they can relate to and respect will make that person’s task easier. There are also advantages to having your back-up executor and your children’s guardian be the same person.

You also might want to take into consideration where the executor lives. Choosing an executor who does not live nearby means he or she will have to handle your affairs from a distance, which could prove impractical or add travel expenses.

Nonetheless, even if they live elsewhere, the nature of your assets and the importance to you of having a particular person as your executor may still make it desirable to choose them.

Baring exceptional circumstances, everyone needs one executor plus a back-up. Most commonly, this comes down to your spouse plus one other person.

In the event your named executor refuses to act or passes away before you, your back-up would become your executor.

If you haven’t named a backup executor, or if both the original and backup executor have passed away, the law provides for a “chaining” of executors. This means the executor of your executor becomes your executor!

This is a very personal decision and varies from family to family.

Depending on the situation, it can be very difficult for all of your children to agree on every decision. Forcing them to agree can also mean forcing them to fight.

Also, appointing one or some of the children, but not all of them, can impose an unnecessary burden on them and lead to further conflict. A better option may be to appoint an independent uncle or aunt or family friend and let them make the decisions.

Yes, but the amount is limited by law, usually to no more than five percent of the total value of the estate, or a bit higher. However, close friends or family members appointed as executors will often waive the compensation. The pressure to do this is another reason for not choosing one of your children as executor, since he or she may be seen by your other children as benefiting unfairly.

The House

If you and your spouse own the house jointly, he or she will automatically end up with it. Otherwise, a spouse’s basic need for housing can be covered by giving them your share in the house as an outright gift.

It is also possible to set up a “life interest” in a property whereby your spouse will be allowed to live in it for the rest of his or her life. After that, a will normally provides for the children to inherit their share of the house by selling it after the remaining parent has passed away.

Because it is the principal residence, there are normally no capital gains or other income tax consequences relating to the house after your death.

Household Contents

Normally, these are also passed on to your spouse, subject to exceptions, such as specified mementos.

Sometimes, certain items are identified in a “letter to your executor” which, although not legally binding, is usually accepted, as it is expected the executor will want to see your wishes carried out.

These can also be subject to a “life interest” given to your spouse to eventually pass on to your children.

Be sure you include a full, powerful “boss clause” that will give your executor the legal authority to make decisions on how household contents are distributed among your beneficiaries, should that become necessary.

Registered Retirement Savings Plans (RRSPs)

Make sure you review your beneficiary designations regularly!

It is possible to establish a blanket or catch-all named beneficiary for your RRSPs and other tax-saving vehicles through a special provision in your will.

The importance of such a provision is to ensure the funds from such plans do not fall into your estate, making them subject to unnecessary probate fees or sold off to pay estate creditors instead of going to the people you want them to go to.

Insurance Policies

Again, as with RRSP and RRIFs, review your beneficiary designations regularly.

Naming a catch-all beneficiary is not as clearly available for insurance policies because of the technical requirement in insurance law that beneficiary designations are not effective until communicated to the head office of each insurance company.

However, it is equally important to ensure a specific person is named the beneficiary of each insurance policy. This will avoid additional probate fees if the insurance proceeds end up in the estate.

Joint Bank Accounts

By virtue of their being joint, the money in these accounts will pass on to the survivor of the joint arrangement.

Having at least one joint account can be quite useful in the event of an incapacity, as it is an easy way to allow a spouse to pay bills out of disability or other payments that are deposited in the account but are not technically in their name.

If the joint account is for convenience only and therefore an estate asset, this should be mentioned in the will. Joint bank accounts with right of survivorship cannot be dealt with in a will.

Special Gifts, Tools, Jewellery

These can be dealt with as bequests or gifts in the will. They can also be dealt with in a letter to your executor, as mentioned above.

Charitable Donations

When bequeathing a gift to a church or charitable institution, it is important that the organization be clearly and properly named to avoid any possible confusion.

The purpose for which the funds can be used should also be specified and there should be a specific provision identifying exactly whose official receipt will be sufficient to demonstrably prove that your executor did, in fact, make the donation you instructed.

Your will should include a provision giving your executor the discretion to satisfy the bequest through a direct transfer of securities to a registered charitable organization. (A direct transfer of qualifying securities listed on a prescribed stock exchange would result in no capital gain.)

A Cottage

Keep it simple. Try to avoid, if at all possible, “making sure the cottage will be kept in the family forever and ever.”

Consider who is in control and how differences are to be resolved, and educate yourself on the capital gains implications.

A continuing power of attorney for property lets you identify someone who can sign for you if you become incapacitated. It can also be made effective immediately—not just when you become incapacitated.

When setting up a power of attorney, it is prudent to name a back-up person in the event your first choice has passed away or is incapacitated.

Although banks have their own form of powers of attorney, which can be useful, they are limited to banking only; they do not cover non-banking issues, and some may not even cover access to a safety deposit box.

If you have a power of attorney that was set up before 1995, it is very important to replace it with a new one. Before 1995, powers of attorney did not cover some incapacity situations, such as a case of severe mental illness requiring prolonged in-patient treatment in a mental health facility.

The Substitute Decisions Act, which came into effect in 1995, allows for the creation of a specific health and medical power of attorney called a power of attorney for personal care. This form of power of attorney lets you name someone to make health and medical decisions for you.

It also enables you to express your wishes in terms of medical treatment. For example, it can direct what actions you want your family to take if your life is being maintained only through artificial means, such as by use of a feeding tube or breathing ventilator.

It is wise to ensure loved ones are aware of your views on this sensitive topic.

In the absence of both a power of attorney for property and personal care, the government will appoint a representative called an attorney to administer your finances and make health and medical decisions for you.

Your spouse, children, or grandchildren do not have the automatic right to make decisions for your financial or medical care, nor do they have the automatic right to access either medical or financial information.

Yes, you can. The Family Law Act allows parents to put a special paragraph in their wills to ensure a child’s inheritance does not get divided.

The best way to plan for this situation will vary from family to family. Assess the risk of this realistically, and remember that both you and your spouse will face the same risk.

If it is important to you that your children get something when you die, you could name them in an insurance policy or use the proceeds of an RRSP.

It is also possible to set up a “life interest” in a property, such as the family home, whereby your spouse will be allowed to live in the home for the rest of his or her life. Then, after he or she passes away, the will can provide for the children to inherit their share of the house.

Make sure all RRSPs, tax-savings plans and insurance policies have named beneficiaries to keep the proceeds out of your estate and away from probate fees. Where possible, put major assets in both names, including the house, cottage or other real estate, and bank accounts.

You may also want to give certain assets as gifts before death. For significant assets, consider setting up a family trust.

First, the executor must ensure that an informal accounting of the estate has been done and a clearance certificate has been obtained from Revenue Canada. After that, beneficiaries must sign formal, written releases, or file a court application for the Passing of an Executor’s Accounts.