Wills, powers of attorney, trusts

Your estate plan will include some or all of these elements:

Will

• The cornerstone of an estate plan
• A written document that directs how your assets are to be distributed at the time of your death
• Helps minimize taxes and probate fees
• Names your beneficiaries

Power of Attorney

• A document authorizing another person or trust company to manage your financial affairs should you become incapable of doing so on your own
• Since family members are not automatically authorized to act on your behalf, this document provides security and peace of mind
• For business owners, this document appoints someone familiar with your business to manage it if you are unable to do so
• You can have two simultaneous powers of attorney – one for your personal affairs and one for your business

Trusts

• A trust is a legal arrangement that transfers legal titles to property to another person or institution. Trusts can be used for many purposes:
• Minimizing taxes or probate fees
• Management of assets in the event of incapacity or death
• Managing assets for young children or beneficiaries who lack financial expertise
• Providing for family members, including those with special needs
• Providing for a favourite charity
• Protecting assets from dependants’ relief or family law claims, and other creditors
• Providing peace of mind that your loved ones will be provided for by a trust

Three types of trusts

An inter vivos trust is created during the lifetime of an individual and can be either revocable or irrevocable. Legal title to property is transferred by an individual to the trustee. Specific instructions are given on how the property is to be used for the benefit of the persons or institutions named in the trust deed. Such trusts, although established during an individual’s lifetime, can continue after the individual’s death. Assets transferred to an inter vivos trust by an individual do not form part of his or her estate and are not subject to probate fees.

A testamentary trust is created under the terms of a will and comes into effect only upon the death of an individual.

For individuals who are 65 years of age or older, alter ego and joint partner trusts can ensure that your assets are properly managed should you become incapable. These trusts allow you to specify exactly how you wish your assets to be managed and administered, and how you and your partner wish to be cared for personally and financially. They can also provide for the administration of your assets after death.