Anne McFarlane – October 2016
Estate Planning 101
Estate planning is an important step to ensure you and your loved ones are cared for, and your legacy protected. Whether it’s determining who will make your medical decisions, or deciding who will inherit your family heirlooms, estate planning is intended to provide stability and peace of mind to you and your family.
At MDW Law in Halifax, Nova Scotia, we offer a Wills Package, which includes a will, power of attorney, and personal directive. This is only a starting point for your estate planning, and you should be sure to discuss your individual needs and wishes with your lawyer to determine how best to manage your estate.
Will
In your Last Will and Testament (your “will”) you have the opportunity to set out who you will receive your property upon your death. Your will can include specific gifts (jewelry, furniture, heirlooms, etc.) and/or a general gift of your whole estate. Your will can be revoked or changed at any time, as long as you have the required mental capacity to make these changes.
If you die without a will, or “intestate”, your estate will be distributed according to Nova Scotia’s Intestate Succession Act. It is possible this legislation will divide your estate in ways you would not be happy with, and may not sufficiently provide for your family after your death. This is especially important to note for people in common law relationships, who will not automatically inherit their spouse’s estate in the event they die intestate.
Some of your property may have designated beneficiaries (life insurance policies, RRSPs, etc.). If a specific beneficiary is not listed for these forms of property, they will generally be left to your estate. It is important to speak with your financial advisor and your lawyer to ensure these beneficiaries are properly designated.
Under Nova Scotia’s Wills Act, there are a number of requirements for a valid will. Your lawyer will review these requirements with you and draft your will with these and your personal wishes in mind.
Power of Attorney
A power of attorney allows you, the “donor”, to appoint an “attorney” to make your financial decisions on your behalf. Your power of attorney will set out the details of what exactly you wish for your attorney to do on your behalf, and may limit their powers to certain types of decision-making. A power of attorney does not prevent the donor from making his or her own decisions, as long as they have capacity to do so. This document does not cover medical decision-making (see the information about personal directives, below).
A general power of attorney ceases to have effect if and when the donor lacks mental capacity. If you wish for your attorney to have the power to manage your affairs even after you have lost capacity, you require what is called an “enduring” power of attorney. This document provides your attorney the power to continue making your financial decisions, even after it is decided by your doctor that you do not have capacity to make your decisions. This is a powerful document, as it allows someone to make significant financial decisions on your behalf without your direct input at the time. However, it can be an extremely useful tool in your estate planning to ensure your affairs are managed by a trusted loved one in the event you no longer have capacity.
Personal Directive
This document allows the you to appoint someone as your delegate to make personal care decisions on your behalf, in the event you are deemed unable to do so. This includes any and all decisions to do with your personal care such as decisions regarding your medical care, housing, nutrition, recreation, etc. Once appointed, your delegate’s job is to follow your express wishes, and make decisions as if you were making them for yourself. As with other estate planning documents, your personal directive can be revoked or changed at any time, as long as you have capacity.
In the event you do not create a personal directive, a family member may be deemed your “substitute decision maker” under Nova Scotia’s Personal Directives Act. This is very important to consider, in the event you do not want your immediate family making these sorts of decisions.
These three documents are only the basics to get you started on the important decision-making in your estate planning. There are a whole host of additional documents or plans you may wish to consider to ensure you are properly cared for and your loved ones are supported through your illness or death. Please consult one of our Halifax lawyers for further information and questions on these or other estate related issues.