Estate and Advance Care Planning

by: Richard Bell

Estate and advance care planning is important regardless of age or family structure but particularly for estate planning there are different issues to be considered depending on age and family structure.

In terms of Wills, research indicates that only about 50% of the adults in Canada have Wills and of those that have Wills only about 25% believe their Wills are up to date. And the number of people who do not have a Power of Attorney or Representation Agreement is significantly higher with some studies estimating that over 70% of the adults do not have either.

So why should you move estate and advance care planning to higher on the “to do” list. My personal belief is that it is not about you – it is about your family. In the event of death or a health emergency, your family will be in crisis and the best way to help them is to have your affairs in order. You need to have authorized someone to manage the distribution of your estate when you die or your affairs when you are unable to do so.

If you do not have a Will, the distribution of your estate will be based on provincial legislation which may not be what you want. If you do not have a Power of Attorney appointing someone to manage your legal and financial matters, your loved ones will need to apply to the Courts for a Committee appointment which is time consuming and expensive. If you do not have a Representation Agreement appointing someone to make medical decisions when you are not able to do so, it gets complicated as the doctor and other health care providers will select someone to be your Temporary Substitute Decision Maker under The Health Care Consent Act which is just temporary. So again your loved ones may need to seek a court order.

In terms of Wills, there are some issues that are the same for everyone and other issues that are different based on age and circumstances. My comments relate to couples who have children as children can increase the complexity of estate planning.

Couples with young children need to decide who would be the guardian of the children if both parents die.

Couples with minor children or children in their 20s need to decide if they want to have a trust for the children, so that if both parents die, their children don’t get control of the inheritance at 19 or when they are too young to have control of what can be a significant amount of money.

Couples in second marriages, where one spouse has children from previous marriages, need to decide what happens to the estate if the spouse with children dies first. I.e. is there a spousal trust? Do children need to wait until the second spouse dies before inheriting anything from their parent’s estate? What happens if both spouses have children from a previous marriage? And what happens if the new spouses have children together?

Older couples with grandchildren may want to consider including a gift directly to grandchildren and charities in addition to their children. And they may also want to consider gifting part of their estate to a son-in-law or daughter-in-law in the event a daughter or son has predeceased.

And parents with children receiving disability benefits need to consider creating a disability trust to ensure the child does not lose their disability benefits due to receiving an inheritance.

As you can see there are lots of “what ifs” in estate planning. So the best advice is to make sure you have a Will, and if you have one, make sure it is up-to-date. And the additional advice is to make sure you have done advance care planning as well as estate planning.