‘Estate planning is all about your wishes being followed’

An estate planning professional can craft the documents people need to ensure their wishes will be carried out.

If you’ve ever wondered what would happen if you passed without having a will, the short answer is a lot, and the long answer highlights the important decisions that are made that can have a lasting impact on the lives of your family.

“In Alberta, if you die without a will or if you leave assets which are not disposed of by your will, the Wills and Succession Act steps in and determines who will receive your estate and when,” explains Jacob Plotsky, a lawyer who has an extensive Wills, Trusts & Estates practice where he acts in the preparation of wills, enduring powers of attorney, personal directives, trusts and estate administration. “The Wills and Succession Act also dictates who are entitled to apply to be the personal representative of your estate. This may not be the person you would have named in your will had you done so.”

The Wills and Succession Act does not consider the needs of each particular family and unfortunate situations may result — your assets may pass to those family members whom you may not want to benefit from your estate.

You also lose the ability to appoint a guardian for your minor children, tax plan, as well as the ability to leave a charitable legacy.

However, with a properly crafted will, you give instructions as to what happens with your assets rather than have provincial legislation do it for you.

In this new era of the do-it-yourselfer, many believe that a DIY will kit is an appropriate alternative to working with a professional, however, this can also lead to unintended results due to a lack of knowledge.

“Estate planning is all about your wishes being followed — it is imperative that you work with a professional to ensure that happens. This is not something to leave to chance!” says Plotsky.

When planning for the future, an Enduring Power of Attorney is another important document that helps ensure your wishes can be executed correctly.

An Enduring Power of Attorney (“EPA”) is a legal document that allows you (the “Donor”) to choose someone (the “Attorney”) to look after your financial affairs before and after you become incapable to do so.

It is a simple and inexpensive way to plan for the future.

Loss of mental capacity is a common triggering event, however, that is not the only way. An EPA may be activated immediately upon signature, or upon the loss of capacity as declared by two medical doctors.

If you lose the ability to manage your own financial affairs and do not have an EPA, an application to the court to appoint a trustee will likely be necessary. Unfortunately, this can be a lengthy and expensive process and the trustee appointed by the court may not be who you would have chosen had your voice been heard.

“I have had many clients who are trying to take a particular action like selling their home to downsize, only to learn that they are unable to do so as the co-owner of the property lacks the requisite mental capacity and does not have an EPA in place.

“Unfortunately, once you lose your capacity, you also lose the ability to plan.”

Another important document to consider when planning is a Personal Directive, which allows you to designate someone to make non-financial decisions in the event you cannot make these decisions yourself.

These non-financial decisions may relate to health care, including medical decisions you would or would not want, where you may live and who you may live with, who you may socialize with, activities that you may participate in and legal matters that do not relate to your estate.

Your Personal Directive comes into effect when you no longer have the mental capacity to make personal decisions.

“If you do not have a Personal Directive and you are no longer able to make your own personal decisions, an application to the court may be necessary to have a guardian appointed for you,” says Plotsky. “Unfortunately, the court process is

long, expensive and the person appointed may not be who you would have chosen for yourself. Again, once you lose your capacity, you also lose the ability to plan.”

By preparing a Personal Directive now, while you have mental capacity, you can ensure that your wishes are known, and decisions will be made by the person or persons you know and trust.

If you are in need of a Personal Directive and are worried about your capacity or that of a loved one, it is important to consult with your medical and legal professionals right away.

“Generally, capacity requires that individuals are able to understand the situation they are in, the decision in question and the consequences of making a given choice. People sometimes assume that capacity is an “all-or-nothing” type of ability: either you have it, or you don’t.”

Plotsky explains that legal standards for capacity can vary, and people often experience fluctuations in capacity.

“When they are feeling well and are at their best, their mental abilities might be good enough for them to have capacity for many decisions. But if they are sick or stressed, their capacity to make decisions can be reduced, sometimes drastically so.”

“Again, once you lose your capacity, you also lose the ability to plan so this is not something to wait to address. The time is always now.” At this point you may be asking yourself ‘how do I choose the right person for me?’ when it comes to deciding who will be power of attorney, trustee, executor, etc. Unfortunately, the answer is far from straightforward.

Plotsky stresses that it is important to have a frank and honest discussion with your estate planning professionals and explore the options that are right for you. Objectivity, fiscal responsibility, location, age and health are all factors to consider when creating an estate plan.

“Many people want to treat every family member equally by giving all of your children equal authority, for example. It is understandable to gravitate to your spouse or children to fill these roles, but it is important to choose the individuals who are best suited for the task. Often, the answer is none of them!”

We work so hard for what we have — it would be truly heartbreaking to see it disappear in an instance. By taking the time now to prepare for the future, you can ensure that your estate is taken care of.

~ Article published in the Calgary Herald (November 29, 2021 edition)