Now that the lazy days of summer are over, it is the time of year that many people tackle the to-do list of things to get organized for fall. High on that list should be getting a proper estate plan in place. By doing so, you ensure that in the event something happens to you, your loved ones are properly taken care of, and they have the proper documentation to take care of you and your assets.

What is an Estate Plan?

An estate plan is more than a will. A will deals with your assets after you have died. While you are alive, it is important to have a Power of Attorney to deal with your financial matters in the event you are incapacitated or unavailable to make decisions for yourself. A Personal Directive allows someone to make medical and personal care decisions for you, including home care and nursing home admission, at a time when you cannot make these decisions yourself. 

There are other tools available in your estate plan such as joint tenancy on property and direct beneficiaries on assets such as RRSPs and life insurance that may be useful depending on your individual circumstances. It is important to speak to a trusted advisor to know how to best complete your estate plan and to review your current plan periodically.

What happens if you die without a will?

In the event that you pass away and do not have a will, the Intestate Succession Act will dictate what happens with your money and property.

An administrator is a person (or business) appointed by the Probate Court to handle the affairs of the deceased person. The Probate Act lists who has the right to apply to become an administrator of your estate. This person may not be your first choice to handle your affairs. The way to choose the right person is to appoint an executor in your will.

Debts and taxes are always paid first from your assets, whether or not you have a will. How the rest of the assets are divided is determined by the Intestate Succession Act. For example, if you are legally married and have children, your spouse is entitled to the first $50,000 of your estate or the family home if it is valued above $50,000. The remaining assets then get split with one-third going to the spouse and the remainder divided between the children. If the children are under the age of 19, the Public Trustee would act as a trustee of the children’s trust and any money would be released directly to them on their 19th birthday.

As you can see from this example, the spouse loses control of the assets and the children receive their inheritance at a young age. This is unlikely the way any couple would want their money to be handled in real life as it is most common for all the assets to go to the surviving spouse when a will is done, especially if there are young children still being cared for at home. If you have a will in place, you can control the division of the assets and the age your children receive their inheritance.

Common-Law Spouse

A common misconception is that a common-law relationship is the same as being married. This is not true of estates law in Nova Scotia. The common-law spouse is not a spouse under the Intestate Succession Act and does not automatically inherit anything if you pass away without a will. The best way to provide for your common-law spouse is to complete an estate plan.

Power of Attorney

Unfortunately, many people fail to realize that in the event of an accident or illness they may become incapable of making decisions regarding their finances and property. Some people assume that having joint ownership of their house or bank accounts with their spouse is enough. However, if you cannot make decisions and sign for yourself, your spouse cannot sell or mortgage the house, or automatically make other financial decisions on your behalf.

 A Power of Attorney is a document that appoints a trusted person to act for you as a legal representative. They make decisions regarding your finances and property when you are alive but incapable of making those types of decisions for yourself. The Power of Attorney can also be drafted to allow someone to act on your behalf if you are out of town, etc. It is very important to appoint someone whom you trust and has a good understanding of financial matters.

If you are incapacitated without a Power of Attorney, someone (a family member, friend, advisor, etc.) will need to make a guardianship application to be appointed by the Court to act on your behalf, which can be costly, stressful and time-consuming during an already difficult time.

Personal Directive

When you are no longer able to make decisions for yourself, a Personal Directive appoints a person, usually a close family member, to make decisions about your health care, nutrition, hydration, shelter, residence, including admission to a continuing care facility, clothing, hygiene, safety, comfort, recreation, social activities, support services and home-care services. 

If you do not have this document completed and become incapacitated, your nearest relative may be called upon to make these decisions for you, such as a spouse (including common-law spouse), child, parent or sibling, or the Public Trustee if no relative is available or wants to make the decisions and there has not been a legal guardian appointed by the Court. By completing a Personal Directive, you are choosing who you think would be best at making decisions for you and minimizing the stress for your family. It is best to discuss your wishes with the person you are appointing.

What is involved in estate planning?

Many people are reluctant to start an estates plan for fear they need to gather a lot of paperwork and information before getting started, which is not the case. To start an estate plan, you sit down with your lawyer for a conversation about your family, your assets and your debts. Your lawyer can then draft your estate plan and make recommendations for you to minimize expenses and take care of your loved ones as you wish. It really is that simple.  

You can read here for some further considerations when making your will: 
What to Think About When Making a Will

If you are looking to draw up a will or develop an estates plan I would encourage you to seek out legal advice.