Do you have a will? What about a power of attorney? If you answered no, why not?
Most people’s answer to that question is NO, but also that they know how important these documents are and that they need to get them done as soon as possible. I think the urgency of having these documents in place are not understood well enough, because if they were, more people would have them.
So, what are these documents and what do they do for us?
- Wills — this is a legal document that you create while living where you express how your property should be distributed upon your death. You will name one or more person as the executor of your estate, this is who will manage it until it’s been fully distributed as you wished. Some people think that their spouse will automatically inherit their property so there’s no need for a will, but this is not the case. For example, in Ontario, if you are married and have more than 1 child, the first $200,000 of your estate is awarded to your spouse, anything above $200,000 is shared between your spouse and the children according to specific rules. This is important to note, because if your children are minors, your surviving spouse will have to make an application to the courts in order to access the money that was left to your children. Another case to consider is if your children are not minors, but still young adults, they will have access to all of that money and it may not be used in a way that aligns with your wishes.
- Power of Attorneys — this is a legal document where you appoint someone you trust and give them the right to make decisions for you in the event that something happens to you and you are no longer capable of looking after your own affairs. There are two types of Power of Attorney’s (POA):
-POA for Personal Care will take care of decisions about your health care, housing, and other parts of your personal life
-POA for Property will make decisions about your financial affairs
Most people don’t know that if something were to happen to you without a POA and you are not cognitively capable of making decisions, the medical professional treating you is legally obligated to contact the courts and report this. This will cause your assets to be frozen, including your half of your marital home. This means that your spouse will not be able to sell, refinance, or do anything with your family home even if they needed to.
We are given these tools to use so we can ensure that in the event anything happens to us, our wishes and plans can still happen. If you don’t use these tools, you end up leaving it up to the courts to decide what happens, these are people who have never met you and don’t know anything about you or your family. So, don’t leave anything up to chance, and make sure you take the time today to plan for yours and your family’s futures.