What is Estate Planning?
Estate planning is the act of organizing the affairs of your life—your wealth, investments, property, pension, personal belongings, care of any dependents—and arranging the transfer of these and other items upon your death. It protects everything you have worked for all your life, and makes sure that when you are not around to do things yourself, that things are distributed and handled the way you want.
In the event of someone dying without a will, they are considered to have died intestate, and the Succession Law Reform Act will determine the division of your estate. The purpose of this Act is to settle an estate, despite there being no direction from the deceased.
In the absence of a will, an estate can be distributed in the following way:
If you are married without children: Your spouse will inherit everything
- If you are married with children: Your spouse can inherit up to $200,000 worth of assets. If anything is remaining, it will be divided between your spouse and your children.
- If you are unmarried with children and stepchildren: they will each inherit an equal portion of your estate.
- Unmarried and no children: Your parents will inherit everything.
- Unmarried with no children or parents: Your blood and non-blood siblings will inherit everything.
- Unmarried with no children, parents or siblings: Your blood and non-blood nieces and/or nephews will inherit everything.
- Deceased child: his/her children will inherit that share, if any.
If these options have been exhausted to no avail, then your estate will be equally divided among all next of kin. If you have no next of kin, then your estate will then belong to the Ontario Government – not something anyone would want, and a further reason you should consult with an estate lawyer.
Depending on the size of your estate and/or if you are planning for guardianship of children, estate planning can be complicated. Work with an experienced estate lawyer to draft comprehensive estate documents that protect every aspect of your estate – as well as your wishes.
Reasons for Estate Planning
Every adult should have a will. Even if someone has only accumulated a few assets, it is still better that those assets be given to people or organization of your choice. Estate planning is a way to preserve and protect your wealth and to eliminate any possibility of government interference.
An effective estate involves appointing the right representative(s). An estate trustee should be a capable entity that you know and trust. The responsibilities could include caring for your children, pay your bills and collecting and dividing your assets. It is a big job, to say the least.
Power of Attorney and an Executor
These two titles are sometimes used interchangeably but they are quite different. The roles tend to coincide more than overlap. A Power of Attorney can act on your behalf while you are alive. This power ends once you are deceased. An executor named in a will is tasked with executing the orders of the will.
Draft a Will
A Last Will and Testament is a powerful legal document that comes into effect upon your death and outlines what happens to your estate. After careful consideration and consultation, this document is typically drafted by a law firm and is often kept in its possession until it is needed. A copy is usually given to the client.
A will can cover the following:
- Assign the role of executor
- Appoint those who will manage your estate
- Appoint guardianship for your children
- State any philanthropic actions
- Divide your estate among your chosen beneficiaries
- Alter or amend an existing will
The cost for estate planning varies based on the complexity of the estate. To determine the costs, arrange a meeting with one of our estate lawyers.
What Happens Upon Death?
If someone dies, the first step should be to find out if they have a will. Contact the lawyer that drew the will. Some wills must go through probate to determine if they are binding or to create a court approved order allowing the trustee to deal with financial matters.
Challenges of Dying Intestate
Besides your estate being divided without your input, there are other challenges that arise from dying without a will. Your estate will take longer to settle and it will cost more money. Someone can apply for a Certificate of Appointment of Estate Trustee Without a Will which grants one authority over another’s estate and the power to act as their representative, but this often requires additional legal work and therefore expense.
Working with an Estate Planning Lawyer
Estate planning requires an experienced and deft legal mind, one that will ensure all your assets are transferred to your liking in the unfortunate event of your death. There is a level of technical skill and a personal aspect that go into estate planning and it is too important to leave in the hands of the courts. Some believe that this process is unpleasant but the peace of mind that comes from knowing your affairs and family are looked after is rewarding.
To learn more about estate planning or for a consultation, contact the estate lawyers at Mackesy Smye.