Preparedness
HOW TO SAVE MONEY GETTING A WILL
“You know what they say, where there’s a will, there’s a family fighting over it.” Comedian Matt Wohlfarth
According to the Oxford Dictionary meaning of “Estate” is “all the money and property owned by a particular person, especially at death. In his will, he divided his estate between his wife and daughter” So, the question is do you still need a Will if you don’t have anything? You don’t have extra investments, you don’t have any property, you don’t have any assets, does it still mean it’s important to do? Absolutely, and let’s show you why!
When you hear “What is an Estate” what does that mean to you? Sometimes we have thought of when we own a Mansion, or property, acreage, farms, or investments exceeding $500,000 we need to do our Estate planning. But, that’s far from the truth. In the legal and financial world, Estate refers to everything of value that belongs to a person or persons. This would include all real estate ( Property and all buildings), personal property (anything of value that is not attached to the property), bank accounts, investments, insurance policies (perhaps unless given a different beneficiary), land rights, and time shares, etc. Your Estate is really all of your entire net worth of all your assets which is not part of any Corporation, only you personally.
Having an Estate plan, so to speak, is to plan! Imagine that! A plan to organize the transfer of all your personal and business assets to your designated beneficiaries in a very tax efficient manner. As well as, your wishes for your personal desires and wants as well as what you would like for those you leave behind. The real object of an Estate plan is to preserve the maximum amount of wealth that is in your estate to your beneficiaries and the flexibility for those you love prior to death. Every estate plan is custom and unique which should include the 3 most important documents to building an Estate Plan. This should include a Will, Power of Attorney and a Representation agreement, or a Living Will. Not sure what they would call these documents in your area. But do some digging to find out and get your planning done!
So, How Is an Estate Formed?
“Many estates are formed through the process of estate planning, which usually refers to the preparation of a will. Through estate planning, a person considers the value of everything owned and decides what will happen to it in the event of his or her death. How a person decides to divide property and who it will go to when are questions that are answered during the estate planning process. If a person dies without a will, descent is used to settle the estate. This is the process in which state law determines what is to be done with all possessions.” https://uniontestprep.com/real-estate-license-exam/blog/what-is-an-estate-and-how-is-one-formed
PREPARING A WILL
There are many different ways of preparing your Will. You can contact a Lawyer or Attorney in your area to discuss a 30 min interview to discuss your Estate planning. That way you can do some research on which Lawyer or Attorney that you feel most comfortable with and how much they would charge. Do not make a decision on the cost alone, make sure you feel comfortable with the person, because you will need to expose a lot of your most inner thoughts, choices and stories to them. As well, as a great reputation must also be on the top of the list of choosing a Lawyer, do your research please……..
You can also use a Notary in your area. Please check with your area to whether Notaries are in fact allowed to prepare Wills and Power of Attorneys. In some locations, a Notary may be able to prepare a Will but there may some limitations. In British Columbia, Canada there is a restriction for Notaries to prepare a Will that contains a Life Estate in a Will.
A Will containing a Life Estate is “where the will-maker gives someone (a beneficiary) the right to use/live in a property for as they wish during their lifetime. Upon that beneficiary’s death or when they no longer wish or need to use that property, the property becomes a part of the estate and is distributed to the ultimate beneficiaries of the residue of the estate. This is a particularly useful tool in cases of children, dependent family members or in the case of blended families (such as giving the will-maker’s new spouse the right to live in the house during his/her lifetime, but upon the new spouse’s death, the proceeds of the house would go to the will-maker’s children).” https://mhwlaw.ca/newsroom/should-i-use-a-notary-or-a-lawyer-to-draft-my-will
Also check your area for a Notary completing a Testamentary Trust. A notary cannot create a will that contains a testamentary trust in B.C. A notary cannot create a will that contains a trust for minor children. A notary cannot create a will that contains a disability trust / fully discretionary trust as well. A notary cannot create a will that contains a Spousal Trust. So these are a few categories in preparing your Will that you may want included in your Will or that you may not need.
The last option is doing your own Will with a Will Kit.
By completing your own Will Kit, it’s better than none at all. I’ll say that much. It’s not 100% guaranteed to your own situation because of the inability that Will Kits have for situations or the inability that a Will Kit has for customization for your personal situation. So be careful because let’s face it, family can fight over just about anything! And by using a Will Kit this just opens a huge door to others to fight or contest a Will. By contesting a Will, this will hold up the probate of the will for any length of time 6 months to years. So, can this way save money? Not at all. By not having a clear cut Will, will allow others to contest it and just cause stress as well as costs coming out of the estate proceeds.
CAN YOU SAVE MONEY WHEN GETTING A WILL?
Are we worried about how much the Will will cost us? Or would we rather say, ” Let’s not worry about the cost but make sure it is just what we want to have happen”. How about that? Some would say it’s more important. Not really sure why that is, honestly. Because once you have passed, you don’t have a say in it, you don’t have an option to make a choice at that time, you don’t have the ability to change anything.
So, the only way I see saving money, is in the preparation.
- Planning
By answering a questionnaire beforehand to prepare your Will. That way you have already discussed with each other, perhaps in a family meeting, to who you wish to have as an Executor, Trustee, or Guardians. This option allows you to spend less of the Lawyer or Notary’s billing time to prepare and the ability for you to spend asking questions perhaps.
- By having a few Interviews with Lawyers, Attorneys or Notary’s.
By interviewing your Lawyer you would be able to know the costs up-front, nothing is a surprise and by feeling good with the one that you have chosen.
- By Not having a Will, What??
Absolutely not. This would be the most costly way of doing your preparation and planning. There are so many, too many to list actually, to go wrong with that picture. So, by not planning will be the most expensive way out of your Estate planning woes.
WHAT IS A POWER OF ATTORNEY?
What is a power of attorney or a POA? A power of attorney is a legal document that you sign to give one person, or more than one person, the authority to manage your money and property on your behalf. The person that you chose can have broad legal authority or limited authority to make legal decisions about your property, finances or medical care. This of course, would allow that person the right to sell a car, a house, a property, access your bank account, or pay your bills. As you can, you have to really trust this person that you choose.
WHY DO I NEED A POWER OF ATTORNEY?
Here’s why it’s so important. Without a power of attorney, no one can sign legal documents cheques for you or do any banking for you. This means bills can be left unpaid. This could also impact your children because they may go indefinitely without the benefit of your financial support.
This document, I call the 2nd Document needed! But, I have found most of the time people forget to do that part of the pie.
What are Powers of Attorney Used For?
According to www.seniorsfirstbc.ca
“There are many reasons why a person might choose to make a power of attorney. One reason is that they may need temporary help taking care of their financial matters if they will be away for a while. For example, if you are going on vacation and will need some banking done while you are gone, you can have a power of attorney drawn up giving a family member or other person the power to take care of this while you are away. You could also have a power of attorney drawn up if an illness or injury makes it difficult for you to handle your own financial affairs.
People also commonly make a power of attorney as a form of advance planning, to ensure that a family member or other person of their choice is legally able to take care of their financial affairs if they become “mentally incapable” of managing their own finances in the future. This kind of power of attorney is often called an “enduring” power of attorney. It continues in effect – or “endures” – even if you become mentally incapable.
It is important to know that, if you should become mentally incapable of making a power of attorney, it is “too late” to do so if you don’t already have one in place. You have to plan ahead and do it in advance. If you do not have a legal power of attorney appointing someone to act for you in place when you become mentally incapable, then your loved ones will need to go to court to get “committeeship” (the legal authority to handle your affairs). Going to court is an expensive and time consuming process, and there is no guarantee that the court would decide to grant the legal powers asked for. An enduring power of attorney is a simple tool that ensures that the person of your choice is able to easily step into your shoes and manage your finances when you become incapable of doing so, without having to go through the court process.
To create an enduring power of attorney, you should ensure that the following sentence is included in your power of attorney document:
“In accordance with the Power of Attorney Act, I declare that this power of attorney may be exercised during any subsequent mental infirmity on my part.” ” http://seniorsfirstbc.ca/resources/legal-research-articles/power-of-attorney-article/
WHAT IS A REPRESENTATION AGREEMENT? OR A LIVING WILL?
A living will, Advance Directive, or Representation agreement is a written statement that will express your wishes regarding any medical treatment, prescriptions, equipment and personal care in case you are unable to express your wishes at that time. In a medical crisis, these documents will allow the person of your choice to make important health care decisions for you, if you’re not able to make those decisions yourself.
WHY DO I NEED THIS 3RD DOCUMENT? THIS LIVING WILL?
If you don’t have a Living will, a representation agreement or an advance directive for health care decisions, the law may allow either a family member (not necessarily so check in your area) or the Public Guardian and Trustee (Government appointed representative) to make decisions on your behalf. So you will have to check how that works in your own area.
While you may not require any of these terms, quotes or expressions in your day to day world, I hope that you have gotten a little bit of insight, inspiration and motivation to move forward in your own planning. That is really my goal! And oh yea, to use “YOUR BACK UP PLAN APP’. I forgot that part………
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