Wednesday 21 September 2011

Wills & Estates 101 Mini-Series: Part II: Powers of Attorney

As the second installment in our mini series on wills & estates, we will review some of the basic legal principles about powers of attorney in Ontario, why they are important and how they fit into your overall estate plan.

A will is only effective from the date of the death of the testator. People however often need assistance in managing their “estate” (their property) or their personal care while they are alive if they are unable to do so themselves. This could be because of mental infirmity or because of an accident or physical limitations.

Therefore it has become customary when making a will to also prepare two power of attorney documents in order to have a complete estate plan in place. There is a Power of Attorney for Property and a separate one called a Power of Attorney for Personal Care. These documents give the “Grantor’s” power or authority to the appointed person(s), the “Attorney”, to manage his/her affairs and property and to make care decisions such as giving legally binding consent to proposed medical treatment or withdrawal of medical treatment or life support systems.

You should carefully consider who you wish to have this authority. These two kinds of Powers of Attorney are very different. There are different rules for when they come into effect and they involve very different kinds of decision making. You can appoint one or more attorneys, and if you appoint more than one, you can decide if they have to make decisions together or can act on their own. Your attorney for property and your attorney for personal care can be the same person or different people and they can be the same person as your executor. You could consider appointing an alternate attorney(s) in case the primary one is unable or unwilling to act.

Many people consider the appointment to be a statement about who the Grantor trusts more or who is the favourite, and worry that someone will be offended if not appointed. The duties of an attorney can however be very onerous. The law requires an attorney to keep very detailed accounting records, more detailed than a lot of people realize. The law sets out various duties to consult before making decisions, and requires attorneys to always act in the best interests of the grantor, not for one’s personal benefit. There are investment rules and other limitations on what an attorney can do. There are numerous court disputes over whether the attorney kept proper accounts or made proper decisions. Once the initial glow of being appointed wears off most attorney’s find out it is a lot of work and leaves them open to complaint or second guessing by various other people with the benefit of hindsight.

You should also keep in mind that a power of attorney made in Ontario might not suffice if the “grantor” moves to another province or country.

The bottom line is that powers of attorney for property and personal care are vital parts of any good estate plan, but you should understand and discuss all of these issues with your lawyer carefully before completing them.



[Watch for our next session on Powers of Attorney – hard work, good pay? Compensation for attorneys.  If you live in the Ottawa area and would like Augustine Bater Binks to prepare your will, please email us at info@abblaw.ca or call 613-569-9500 to speak to one of our lawyers or a member of our staff.]










Monday 12 September 2011

Wills 101 Mini-Series: Part I: Choosing an Executor

This first installment of our mini-series on wills is meant to provide some basic information about the selection of an executor.

The estate trustee, also known as the executor, is the person named in a will who will be responsible for administering affairs after the death of the testator (the person making the will). This person will ultimately be responsible for ensuring that the testator’s final wishes are respected. Choosing who to appoint as an executor is a critical decision which a testator must make during the estate planning process.

A testator needs to instruct his or her lawyer as to the person (or people, if more than one) who he or she wants to act as the executor of their estate.

It is possible that the person selected will predecease the testator or be otherwise unable to act as executor. It is therefore advisable to appoint a secondary executor to act in the place of the primary executor in the event that he or she is unable to act.  It is also possible to appoint more than one executor (i.e. a group of 3) with an express statement that either the group of executors must act unanimously or by majority.

There are many considerations that go into the choice of executor, but frequently it is a trusted family member or close friend.  Ideally, the person is able to handle business affairs (i.e. opening an Estate bank account, sell a house).  If an estate is complex, it may be prudent to consider appointing a professional estate trustee, such as a lawyer or an accountant.

It isn’t essential that the person live in the same town as the testator, but it is more convenient.  If the executor is an Ontario resident it eliminates the issue of the possibility of having to post a bond. Moreover, it is important to note that the executor can also be a beneficiary of the estate.

It is generally wise for the testator to consult with the person he or she has chosen as executor prior to finalizing the will. Not only is it courteous to do so, but making appointees aware of their selection by the testator at an early stage will minimize the likelihood of them declining the role when it comes time to act.

If the testator has any doubts about appointing a particular person as executor, these concerns should be raised with the testator’s lawyer as early in the drafting process as possible. Likewise, if a testator appoints an executor and later becomes uncertain or apprehensive about the person chosen, the testator should act without delay to meet with a lawyer in order to discuss amendments to the will. Doing so will not only increase the probability that the estate will be administered smoothly, but it will also provide the testator with peace of mind.


Philip W. Augustine and Michael D. Heikkinen for abblaw.ca


[In next week’s Wills 101 blog, we will be discussing the fundamentals of powers of attorney for property and personal care. If you live in the Ottawa area and would like Augustine Bater Binks to prepare your will, please email us at info@abblaw.ca or call 613-569-9500 to speak to one of our lawyers or a member of our staff.]