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What Do I Need to Consider When Estate Planning?

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When many of us think of the future, our thoughts may turn to our children growing up, growing old with the one we love most, or pursuing new passions after retirement. However, while these are all important, we also need to look beyond that and consider what will happen to our estate once we are too old to make decisions for ourselves or have passed on from this life. 

What is Estate Planning?

Estate planning refers to the act of preparing to transfer your wealth and assets once you have died or are no longer able to make decisions for yourself due to disability or illness. Assets include not just the physical items you own, such as a house or a car, but also the money you have in the bank and any funds payable from life insurance policies.

If you have any debts (referred to as liabilities), these will also need to be taken care of upon your death.

What Do I Need to Consider?

To help you through the death and dying process, the Government of Alberta has a helpful guide that includes information and forms for both the dying person and their loved ones. 

Your lawyer can also help you navigate the legal process of planning your estate, and can help your estate representative carry out their legal duties in accordance with your wishes. 

Your Will

The foundation of your estate planning is your will. A will is a legal document that lays out how you want your estate divided upon your death. Keeping your will up to date is crucial because it allows the executor of your estate to best carry out your wishes. You should make a habit of reviewing your will often and updating it accordingly. 

What if I Don’t Have a Will?

Though you aren’t legally required to have a will, you should still have one to ensure your wishes are followed. If you don’t have a will, laws in the province or territory in which you reside will determine how your estate is handled, which may or may not align with your exact wishes. 

In Alberta, if you die without a will, your entire estate goes to your spouse or adult interdependent partner (if there are no children). If you have children with your spouse or interdependent partner, then your spouse or partner will receive either 50% of your estate or a set amount determined by the Wills and Succession Act (whichever is greater), and the rest of your estate will be divided equally among your children. If you have children, but no spouse, your entire estate will be equally divided among your children.

Creating Your Will

To help ensure your wishes are clearly laid out in your will, it’s best to contact a lawyer who specializes in wills and estate planning for assistance. A lawyer will help ensure that your desires are clearly expressed and that all legalities are observed.

Choosing Your Estate Representative

A personal representative (also called an executor or estate representative) is the person (or persons) you have chosen to manage your estate after your death. 

You can name any person to be your personal representative, though obviously, you should choose someone who you trust to manage your estate effectively and carry out your wishes. 

Though many people choose trusted family members or friends, you can also choose a financial professional to be your personal representative. Whomever you choose, you should make time for a frank discussion on the topic of your estate to ensure that your representative understands their responsibilities and is comfortable taking on this role.

A lawyer can also help your personal representative obtain a grant of probate, which is required to distribute a deceased person’s property.

Settling Your Debts

If you have debts, they will need to be covered from funds in your estate before your beneficiaries receive their inheritance. It is the legal responsibility of your personal representative to ensure that all debts are paid out of your estate. 

In Canada, your personal representative, spouse, and children are not legally required to settle your debts using their own funds. If there are more debts than assets in your estate, your personal representative will need to negotiate a mutually satisfiable solution with your creditors. Paying off your debts before your death can help streamline the settling of your estate, but if that isn’t possible, you should include a detailed list of what debts you owe, for how much, and to whom, to help your personal representative settle your debts on behalf of your estate. 

Enduring Powers of Attorney & Personal Directive

An Enduring Power of Attorney (EPA) allows you to effectively plan for your future, including any end of life care, by appointing someone you trust to manage your financial affairs in the event that you are still alive but unable to manage your own affairs for any reason, including disability, age, or illness. 

To ensure that your wishes are followed, you should also draft a personal directive. A personal directive is a legal document that directs your agent to look after all your non-financial matters, such as medical or other end of life care. 

To learn more about EPA and what it entails, the Centre for Public Legal Education Alberta has a handy guidebook that covers general advice on this topic. Your lawyer can help you create tailored versions of these documents to meet your needs.

Palliative Care

Doctor holding patient's hand

Palliative care refers to active, compassionate care for an individual experiencing a life-threatening or life-shortening illness who is no longer receiving treatment towards a cure for their condition. In addition to physical or medical care (such as pain management), palliative care is also designed to address social, spiritual, and psychological care for both the ill person and their loved ones. 

In addition to designating funds for palliative care in your will, you should also clearly state what sort of care you wish to receive and whether you would prefer to spend your final days at home,  in a care facility, or somewhere else. When planning your estate, your lawyer can help you ensure that your wishes are clearly expressed and that you set aside enough money from your estate to carry out those wishes effectively. 

Planning Your Funeral

Funerals can be very stressful and costly, subjecting your loved ones to unnecessary financial and emotional strain. To help ensure your wishes are carried out and that your loved ones don’t need to cover funeral or other related expenses, you may want to consider pre-planning and pre-paying for your funeral

How Does This Process Work with a Lawyer?

Middle-aged couple beginning the estate planning process with their lawyer.

Your lawyer will help you navigate the legalities of estate planning and ensure that your wishes are clearly expressed in all relevant legal documents, including your will, your Enduring Power of Attorney, and your Personal Directive. They can also help you plan for events such as a disability or terminal illness, and ensure that you, your family, and your estate are taken care of in accordance with your wishes. This may include, if necessary, helping your personal representative interpret your will and complete all necessary legal paperwork.

Your lawyer can also answer any questions you may have about the legal process of estate planning, and help address any concerns you may have. For more information about estate planning, or to begin the estate planning process, please contact us today.

Written by Khalil Haji

Khalil is the principal lawyer of KH | Dunkley Law Group. He is experienced in all areas of the law serviced by KH | Dunkley Law Group, with extensive experience in residential and commercial real estate transactions, commercial financing transactions, development and condominium law, mobile home transactions, leasing, purchases and sales of businesses, contract drafting, and wills and estate administration.
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