People often ask, “When is the best time to start the estate planning process?” If you have a family, have money in the bank, or own any assets, it's never too early to start the process. Estate planning will detail how your assets are distributed amongst your children and surviving spouse when you die. If you have minor children and are the principal caregiver, your estate plan will also detail guardianship arrangements. Life can be unpredictable, so getting your affairs in order before the need arises removes the stress and uncertainty for yourself and your loved ones.
Why Do You Need an Estate Plan?
An estate plan is essential to help you outline the following:
- Your healthcare wishes if you are incapacitated due to injury or illness
- How to distribute your assets (real estate, money in bank accounts, other personal assets)
- Appointing guardians for any minor children
- Future plans for the management of any business you own. (Subject to any unanimous shareholder agreements and any other agreements the corporation has executed and is bound by)
- Donations to charity
What is in an Estate Plan?
As you start building up personal assets and growing a family, the following estate planning documents are important to ensure the security of your family and the protection of your assets after your passing.
Estate planning includes:
- Drawing up a Will.
- Appointing an Enduring Power of Attorney.
- Making health care directives and end-of-life decisions.
Your law firm will draw up these instructions in specific legal documents during the estate planning process.
Important Legal Documents in Estate Planning
Last Will and Testament
This is the most important document in your estate plan. It helps you to keep control of your estate after your passing and ensures that your personal wishes are met. In Alberta, The Court of King's Bench oversees the administration of wills and estates, and your last will and testament will be submitted to the Surrogate Clerk's office if a Grant of Probate is required. You also need to appoint a personal representative to oversee the management of your assets and debts.
When you don't have a valid Last Will and Testament, your assets will be distributed according to your region's provincial or territorial laws. This might mean the government will distribute your inheritances amongst your surviving family members. If you don't assign a guardian to care for your children, the government will appoint someone to care for them. This may include relatives who step forward for the role, or the government will step in to care for them.
You can also include any funeral wishes you may have in your Will. While these are not legally binding, they do give your loved ones some idea of your personal wishes upon passing. End-of-life plans outlining memorial-related instructions include:
- Organ donor preferences
- Whether to publish an obituary or death notice
- Your preference for burial or cremation
- Choice of service - funeral, memorial, visitation
- Costs for service -casket, flowers, venue
These instructions can be included in a memo attached to your Will. Alternatively, you may give your personal representative your instructions.
The Difference Between a Personal Directive and an Enduring Power of Attorney
A health care directive, also known as a Personal Directive (PD) or a Living Will, outlines your preferred medical treatments when you are unable to express your wishes due to mental incapacity. For example, it will state your preference concerning resuscitation and comfort care.
An Enduring Power of Attorney (EPA) allows you to assign one or more individuals to deal with your financial matters, including real estate and financial investments. They will step in if you are determined to lack the mental capacity to do so yourself.
If there are conflicts between the Personal Directive and Enduring Power of Attorney, the Personal Directive takes priority as it deals with your health.
How to Prepare Your Last Will and Testament
Before drawing up a Will and assigning your property, you will need to know the total value of your assets. You can do this by creating a list of personal assets you own.
Personal property consists of anything that you own that can be moved. This includes tangible items such as cars, boats, household belongings, family heirlooms, and collectibles. Money in bank accounts, life insurance, and investments are known as intangible personal property.
Real property is classified as land and includes any buildings attached to the land or minerals or other resources that can be found under the land. You must also consider your debts, as your administrator will use your assets to clear any outstanding debt before distributing your property to your beneficiaries.
Also, remember that your property may be subject to estate taxes which differ according to the province in which you reside. A financial planner or accountant can help you to calculate the value of your estate and navigate the tax implications of your estate.
Estate Planning Services in Calgary
As a small law firm in Calgary, we take a friendly, personal approach to our clients, with an emphasis on offering practical, affordable, and professional legal advice. Start your estate planning process today and get peace of mind knowing that your loved ones will have a safe and secure future. If you are looking for legal advice on setting up your Estate Plan, call us. We offer a free consultation for all of our services.