Today, the area of estate planning involves much more than making arrangements for the distribution of property on death. You need to be aware of all of the different aspects of estate planning and ways in which we might be of assistance.
Estate Transfers on Death
There are five principal ways to transfer assets on death. The first method, and most common, is a will. A will has the advantage of flexibility. It can be very specific in transferring items of property to specific beneficiaries. It can be very general – simply directing an executor to divide the estate, whatever it might be, among certain beneficiaries.
A will can name several executors and provide for their replacement. A will can fix the age at which children benefit and provide for their care until they reach the selected age. A will can define how moneys are invested until children are of age. A will can appoint guardians for children.
The second method is to rely on the law of Nova Scotia that directs how property is transferred where someone dies without a will. This law, called the Intestate Succession Act, was passed several decades ago and its terms for the distribution of property are an attempt to guess what most people would normally like done with their property. It is completely inflexible. It can have some undesirable results – for example, a spouse may end up sharing an estate with infant children. It can make the administration of your estate very costly. Even in a simple situation, the legal costs of administering an intestate estate will be several thousand dollars, a much greater cost than the preparation of a Will.
The third method of transferring assets is by the joint ownership of property during your lifetime. There has been a recent change in the law around joint ownership. It is imperative that if you hold property jointly with anyone other than your spouse, you document whether you intend the asset to be a gift to that person or an asset of your estate. If you fail to document your intention, the asset will be presumed to be part of your estate.
The fourth method of transferring assets is by the designation of a beneficiary at the time of purchasing certain assets. This method is used primarily in relation to life insurance policies and registered retirement savings plans. No probate is needed to transfer such assets.
The fifth method is placing your assets in a trust during your lifetime with provisions for transfer on death. This has the advantage of avoiding probate, but it may involve undesirable tax consequences and may restrict your use of the property during your lifetime. For these reasons the trust is less frequently used, although a relatively new and tax-friendly trust vehicle called an alter ego trust is now available to those over the age of sixty-five.
When you come for estate advice, we review these alternative ways of transferring assets. As well as offering you some assistance in choosing the most appropriate and least expensive method of transferring assets, we offer you advice on your potential tax liability upon death. Generally, we will help you make those choices that will best achieve your purposes in estate planning.
Estate Planning for Illness
Fortunately, in the case of most illness we are able to continue to manage our financial affairs. Occasionally, an illness disables us to the point where we cannot physically or mentally continue that management. To address such a situation, Nova Scotia law allows us to create a document named an enduring power of attorney.
A power of attorney is simply the appointment of someone else to make some or all of the decisions that concern the management of our affairs. The power is enduring when the person appointed can act or continue to act even though the person who gave the power has become mentally incapacitated.
The advantages of a power of attorney are much the same as the advantages of having a will. You get to choose the person to act for you. You can define the powers that the person is to have. And, you may save several thousand dollars, the cost of having the court appoint someone to act on your behalf if you did not make an appointment while you had the capacity to do so.
Estate Planning for Nursing Care Costs
January 1, 2005 has brought a significant change in legislation in this area. The law governing nursing home and homecare costs, The Social Assistance Act, was amended to exempt your assets when an accounting is made of your ability to pay nursing care costs. Now, income is the only consideration.
There are provisions of the Act and the policies adopted by our various municipalities that are important for any planning you may want to undertake concerning your care or that of your parents.
Even under the new regime, it remains very important that you make yourself aware of your options several years before any move to a nursing home or before you sell your home in anticipation of a move to a nursing home or an apartment.
Consent to Medical Treatment
The Personal Directives Act enables you to appoint a person to give consent or directions respecting personal care matters which may be required for you at a time when you lack the capacity to give consent or directions. Under the Personal Directives Act, the term “Personal Care” includes health care, nutrition, hydration, shelter, residence, as well as admission to a continuing care facility, clothing, hygiene, safety, comfort, recreation, social activities and support services.
The Personal Directives Act also provides for the appointment of a person to give consent or directions respecting any home-care decisions which might be considered for you at a time when you lack the capacity to give such consent or direction. “Home Care Services” is defined to include health care services and support services provided to a person in a person’s own home or while residence in a continuing care home.
We do have available a brochure explaining the fees around many of the services. Please call our office and we will be pleased to mail or email you one.
Our services are billed on the basis of the time involved in giving you advice.
Many times it will be to your benefit to combine the preparation of a will, a power of attorney, and a medical consent with general advice on all aspects of estate planning. This combination will result in the lowest overall price for the completion of all documents.
This information has been provided for general reference only. For advice on an actual matter, you should consult a lawyer. To contact a member of our team call us at 902-469-9500 or 1-866-339-3400 or contact us online to make an appointment.