The Will and the Power of Attorney are something that absolutely everyone has to have. Without exception. Those of us who have accumulated material possessions, savings and investments, real estate properties, businesses, etc. And those who have not.
Especially, those with minor children. Imagine a situation: a couple with minor children haven’t done a will – simply because they thought they’re still young and have all time in the world to do so in the future. But suddenly they die, for example, in a car accident. Did you know, that according to the Canadian law, if the parents die, then the minor children cannot make any legal or financial decisions, nor do they have the rights to manage the inheritance?
The entire estate (property, business, etc.) goes in to the state’s possession until the court considers all applications for guardianship and picks one of the relatives as the guardian. The procedure for appointing guardians may take a considerable time. Besides, it costs approximately 1.5-2.0% of the estate value per year.
But up until that time, the state decides how the estate should be managed: whether the real estate, business and everything else should be sold for cash and invested in some low-yield government bonds, or similar. Also, the state decides, for instance, in what childcare the children should be put and who will look after them. Remember, according to the Canadian law, children under 12 cannot be left without supervision.
To make things more complicated, the parents’ life insurance money is not accessible to the children as minor children (under 18) are not eligible to receive and administer cash. Even after the guardians are appointed, the insurance money is not paid to them immediately but only by the court decision based on the documentary evidence that the money will be spent in the interests of children.
In case of one of the spouses dies and, in the absence of a will, the surviving spouse needs to apply to the court to be appointed as the manager of the estate (“administrator” or “estate trustee”) belonging to the deceased spouse. Once again, the procedure is lengthy and costly, and during all this time the surviving spouse will have no access to the estate – until the court decision. Then, their part of the estate will be determined, after all debts and taxes are paid off; it will also depend on the number of common children.
It is important to remember that this procedure applies only to the couples who are legally married. Common-law partners should get their will done in advance if they want to prevent the surviving party from being disinherited.
What is the difference between a Power of Attorney and a Will? Are both of these documents necessary?
A Will is a legal document that expresses your wishes regarding how you want your estate to be administered or divided once you die. It names your heirs, as well as your estate representative – the person who will manage your estate after your death (also called an executor, an estate trustee or a liquidator) and who will assume custody of the children. Remember, your will must strictly comply with the laws of the province in order to be valid in court.
A Power of Attorney allows your trustee to perform certain legal actions if you’re still alive but unable to make decisions yourself.
Is it possible to write up a will and a power of attorney by yourself using templates from the books or the internet? Or, should you have a lawyer prepare your will?
Unfortunately, the majority of DIY forms don’t fully comply with the provincial legislation, and therefore there is a chance your will may be deemed invalid. Should you take this risk?
It’s up to you to decide. But if you have any questions please don’t hesitate to ask.
Laman Meshadieva, Barrister and Solicitor