Legal Advice

Wills, Enduring Power of Attorneys, Advanced Health Care Directives and other Estate Planning Issues

With better health care and more active, healthier lifestyles, people are living longer and accumulating more assets. In fact, it is estimated over a trillion dollars will be passed down to the baby boom generation from their parents.

The baby boom generation is also aging, and many are doing estate planning. Part of good estate planning includes the preparation of legal documents such as Wills, Enduring Power of Attorneys, and Advanced Health Care Directives.

As people plan their future and prepare these documents, we hear many frequently asked questions.

Q. Why do I need a Will?

Q. Why do I need a lawyer to do my Will?

Q. I am remarried and I want to leave my home to my children from the first marriage. Can I do this in a Will?

Q. Who can witness my Will?.

Q. I want to keep my property in my family forever through my Will. Can I do that?

Q. I made a Will ten years ago, but have since remarried. Is my Will valid?

Q. I want to leave funeral instructions in my Will such as what type of casket I want and what hymns to sing. Is that permitted?

Q. What does an executor do?

Q. What is an Enduring Power of Attorney?

Q. What is an Advanced Health Care Directive?

Q. Where do I keep my Advanced Health Care Directive?

Q. I am in my second marriage, what can I do to get around the Family Law Act?

Q. I have my adult child on my bank account. Is this recommended?

Q. I want to go into a home, but I am afraid of losing all my assets. What can I do?

Wills

Q. Why do I need a Will?

A. A Will allows you to give property upon your death to the people or organizations you wish. It also allows you to appoint the person or organization who will handle your estate once you pass on. A Will also allows you to appoint a guardian for your children or anyone else who may require guardianship.

If you do not have a Will, your assets will go to whoever is prescribed in the Intestate Succession Act of your province. This may or may not be what you had intended. A Will can also prevent a dispute as to who will handle your estate, and make it easier to get your estate processed. For example, having a person appointed as the executor/trix will eliminate the need to get the consents of all your next of kin for one person to look after the estate.

Q. Why do I need a lawyer to do my Will?

A. Only two people are given authority by law to prepare Wills, your lawyer and you. Wills are important documents. So important, it is a criminal offence to improperly do something to a testamentary document. With so much money at stake, people can get taken advantage of and disputes can arise quickly and unexpectedly. Thus, it is strongly recommended you get a lawyer to prepare your Will.

Lawyers are trained in drafting Wills, and it is essential your Will be drafted without ambiguity. A lawyer can suggest certain clauses you were not even thinking of, or properly word a clause you were thinking of. There are some things you cannot do with your property, and a lawyer will help make sure the clauses in your Will would be upheld by the courts.

Also, a lawyer can give advice generally about estate planning. It is important your assets be held in a certain way to avoid costly inheritance taxes and probate fees. After consulting with a lawyer, you may find there are additional things you need to do protect the integrity of your assets such as get a deed to your land in yours and someone else's name, or do a marriage contract.

Finally, and perhaps most importantly, it must be remembered your Will takes effect upon your death. It will probably not be opened or read until you are buried or cremated. If there is a dispute about the validity of your Will, your lawyer may become crucial in establishing the validity of same.

Wills tend to be challenged for the following reasons: (a) clauses in the Will are ambiguous or certain bequests are missing such as a residual clause (b) the Will is not properly witnessed as required by the Wills Act (c) it is alleged the testator did not sign the Will voluntarily and was coerced by someone, for example, a family member, and (d) the testator was not mentally competent when he/she made the Will.

When a Will is challenged, happy families can soon turn into feuding ones. Your lawyer will have interviewed you and probably taken notes on the above points to ensure they are satisfied. Your lawyer may even require a doctor's certification of competency if he or she has doubts. The lawyer may have to testify in court, if necessary, to explain what your intentions were or to confirm you were not coerced or incompetent.

Q. I am remarried and I want to leave my home to my children from the first marriage. Can I do this in a Will?

A. If you die with or without a Will leaving a spouse, the matrimonial home under the Family Law Act becomes the absolute property of your spouse. The Family Law Act supersedes the Wills Act, and therefore, it cannot be done unless you and your second spouse had entered into a marriage contract or prenuptial agreement.

There is a procedure under the Family Law Act whereby your children can challenge your second spouse's entitlement to the property, however, this would obviously be expensive and time consuming, not to mention a great source of bitterness.

If you die without a will, the balance of your estate, constituting matrimonial assets would be divided with your one half interest going to the surviving spouse and your children according to the Intestate Succession Act.

Q. Who can witness my Will?

A. A Will must be witnessed by two people, both of whom must be present at the time of your signing. A beneficiary of the Will or the spouse of a beneficiary cannot be a witness.

Q. I want to keep my property in my family forever through my Will. Can I do that?

A. There is a maxim "you can't rule from the grave", meaning that if you leave certain assets to certain individuals, you cannot unduly restrict their use of same.

Q. I made a Will ten years ago, but have since remarried. Is my Will valid?

A. If you are not married when you make a Will and you subsequently marry, the marriage operates to revoke the Will and you have to make a new Will.

Q. I want to leave funeral instructions in my Will such as what type of casket I want and what hymns to sing. Is that permitted?

A. It is not recommended. Most Wills are not opened or read until people are buried or cremated and the grieving period has passed. It will be too late then if your instructions are in your Will. It is recommended your wishes be written down and given to your executor separately from your Will.

Q. What does an executor do?

A. Being an executor is a big responsibility. The executor should first get the Will probated to get the courts seal of approval that the Will is valid and he/she has the authority to look after the estate. He/she has to make sure all debts and taxes owing by the estate are paid. The executor has to preserve and maximize the assets of the estate until such time as they can be transferred to the beneficiaries. He/she has to dispose of all of the assets of the estate and give an accounting to the beneficiaries of the revenues and expenses of the estate.

These are only some of the duties. It is important to discuss your desire to appoint someone as an executor with that person first to see if they want to accept the responsibility. A lawyer can help the executor carry out most of his/her duties.

Enduring Power of Attorneys

A. This is a legal document in which you appoint another person to act on your behalf in the event of you becoming mentally incapacitated. It will allow that person to do such things as your banking affairs or even transferring property. The Enduring Power of Attorney only takes effect upon your mental incapacity.

A power of attorney can also be done to take effect immediately. This attorney can provide limited powers, be for a limited time, or can be all encompassing.

Advanced Health Care Directives

Q. What is an Advanced Health Care Directive?

A. It is sometimes referred to as a "living will". It allows you to appoint a decision maker to give instructions to health care professionals about what medical treatment you want or do not want to receive should you not be in a position to give your consent. It also allows you to give your consent to use your organs for transplant if you are fatally injured, or any other specific medical direction you want to give.

Q. Where do I keep my Advanced Health Care Directive?

A. Generally, this document is kept at your family doctor's office and the nearest hospital as part of your medical file.

Family Law Act

Q. I am in my second marriage, what can I do to get around the Family Law Act?

A. It is accepted that the Family Law Act may not be perfect for everyone's situation, and in fact, the Act specifically provides that you can contract out of it. In the event of a second marriage, it is common for the parties to enter into a marriage contract (or a prenuptial agreement before they get married). Without same, in the event of a death without a will, the matrimonial home and one half of the matrimonial assets will go to the surviving spouse, which may not be your intention as the children of the deceased will be left out. Thus, it is common in such situations for parties to contract with each other that each would keep their own respective properties, and upon their death it would go to their own particular children, despite the Family Law Act.

Joint Bank Accounts

A. It depends upon what your intentions are and what you hope to accomplish by doing so. Historically, it was common for an older person, especially where their spouse was deceased, to have a son or daughter added to their account so there would be access to the account in the event of death.

However, if there is more than one child and death occurs, is the money in the joint account to go to the other person on the account as a gift, or is it a part of the estate to go to all the children? The answer really lies in the intention of the person who died if it can be determined. Generally, the Courts state in such cases, unless there is strong evidence to the contrary, the money in the account, despite the fact that one child's name is on it, is really a part of the estate. The child becomes a trustee of the money and must hold on to same for the benefit of the remaining children. The opposite presumption is true for a surviving spouse. It is presumed the surviving spouse owns the money if the surviving spouse is on the account.

The banks are legally entitled to release the money to whoever's name is on the account. Thus, whether or not you trust your child will hold the money for the benefit of your other children is an important consideration. It is important you know in advance what your intentions are and set up your banking accordingly.

You may leave the money in an account in your name only, however, it then becomes part of your estate and is subject to probate fees. Probate fees can be substantial if there is a lot of money. If you are not sure what to do, seek legal advice.

Q. I want to go into a seniors home, but I am afraid of losing all my assets. What can I do?

A. This question commonly arises. The following would appear to be the situation at the present time:

• The family home can be kept in your name, conveyed to a member of the family for $1.00 or sold to a third party;
• If sold to a third party, any funds received in excess of $5000.00 can be taken upon you going into the home or at least frozen to cover the costs. You may be required to pay the costs out of your income if you make enough money or have enough liquid assets;
• It is common for some people when settling their affairs to put their money into a trust fund with income coming to them and from the trust to go their children upon their death.

While care has been taken to ensure the information contained herein is accurate, the firm does not warrant that all the information relayed is correct. The information provided is based upon Newfoundland law and is supplied for general interest purposes only. It is not intended, nor should be considered to be specific legal advice or opinion.

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