5 Easy Ways to Make Sure Your Children, Wishes and Assets Stay Protected Should Something Happen to You

It is vital to get your legal affairs in order should the unthinkable happen to you.

There are a number of reasons why this is important, but first, I’d like to give you examples of what could happen if you fail to plan properly and put a rock-solid legal hedge of protection around your family:

• Your kids could be left in the hands of a busy and backlogged court system where a judge who doesn’t know you or your kids could decide who will raise them if something unexpectedly happens to you and/or your spouse.
• Your inheritance could go to an ex-spouse if something happens to you.
• If your spouse dies, his or her inheritance could automatically go to children from a previous marriage, leaving you out completely.
• You could be left in a position where no one (including your spouse!) could access your banking or financial information if you were temporarily or permanently incapacitated in an accident and needed someone to oversee your affairs.
• Without planning, no one would have the legal authority to make important medical decisions for you if you were incapacitated or injured in an accident and unable to speak for yourself.

So how can you avoid these situations? And just how easy is to put the right mechanisms in place?

For starters, I’ll start by saying that getting your legal affairs in order is quite easy. For some of the steps, you won’t even need the help of a lawyer.   Simply follow the instructions in this article and you’ll be one step closer to having your affairs in order.

As an aside, believe me when I say that getting your legal affairs in order feels wonderful and empowering.  You’ll sleep better knowing your children, assets and wishes will stay securely protected if the unthinkable happens to you.

With that said, let’s discuss the 5 easy steps you can take now to begin getting your legal affairs in order this year.

1. Name Short-Term and Long-Term Guardians For Your Kids

If you have minor children at home, you’ll need to specify who you want to care for them if something happens to you and/or your spouse.  If you don’t, a judge who doesn’t know you or your family will make this potentially life-altering judgment call.

In addition to naming the people you want to care for your kids on a long-term basis, you should also consider naming short-term guardians as well.  These are the people who can immediately show up and comfort your kids until your chosen long-term guardians arrive (this is especially true if your chosen guardians live out of province or travel a lot on business and may not be readily available to help your kids).  If you don’t name short-term guardians, the police may be forced to place your children in the care of social services until your long-term guardian is available (which is the LAST place any grieving child should be). Though there is no formal mechanism in Ontario to name short-term guardians, at Allinotte Law Office Professional Corporation, we have developed a form for clients to use and instructions on how to ensure it is readily available if it is ever needed.

So how do you name guardians for your kids in such a way that the nominations hold up in court?   If you’re working with an estate planning lawyer in Cornwall or elsewhere, guardianship nominations can go right in your will. That way there is no question as to who you want to care for your kids if the unthinkable happens to you.

If you’re not currently working with an estate planning lawyer, you can improvise and draw up guardianship nominations on your own.  For best results, have the document you created witnessed and notarized and make sure copies are physically given to your guardians of choice, in addition to anyone else who cares for your kids (i.e after school babysitters, a trusted neighbor, family friends).  That way everyone will be clear as to who to call if something unexpectedly happens to you. These documents aren’t formally accepted in Ontario but could be very helpful to a judge when determining who should take care of your children if you are gone. If this is a very important issue for you (as it likely is), your best bet is to see an experienced estate planning lawyer to make sure it is done properly.

2. Create a Will, Trust…or Both if Necessary!

If you are over 18, have children or own assets including a home, life insurance policies, RRSPs, TFSAs, pension funds, etc., you need a will (at the bare minimum)  to specify who gets what should you pass away.  A will is also the best place to specify who you want to care for your kids if something happens to you.

If you should die without this basic will in place, a judge will decide how to distribute everything from your estate, based on the written law and any claims made on your estate.  As you can imagine, a judge’s decision or distribution of your estate based on the written law is not usually how you would decide, nor are such decisions always in the best interest of your surviving heirs.  This same judge would also have the responsibility of placing your children in a suitable home based on the qualifications he or she values in a potential guardian–which could be the complete opposite of your values as a parent!

Yet in some cases, a basic will is not enough to fully protect your family (and your wishes) if the unthinkable happens.  Specifically, if you own shares in a private corporation, are in a second marriage, have a special needs child or don’t want to leave an inheritance outright to your young children,  you may want to consider having a testamentary trust drawn up as part of your last will and testament. A testamentary trust is a trust that is created on your death. In some situations, for clients with high net worth and complicated assets and investments, a trust created during your lifetime might be appropriate.

There are many different kinds of trusts, but essentially, a trust is a legal entity that can hold title to property for the benefit of one or more other persons.

In simple terms, a trust will own your assets in the eyes of the law (protecting them from creditors, lawsuits and the like) while you (or your appointed Trustees after your death) still retain full control of the assets.

Also, with your assets tied up in a trust during your lifetime or transferred there after your death, you will have more control over what happens with your inheritance.  Specifically, you can determine at what age your children are mature and responsible enough to inherit your estate. You can also make sure a special needs child is financially provided for without jeopardizing his or her ability to qualify for state or government aid. If you do not provide for a trust in your will and you have minor children when you pass away, the law says they can inherit everything you have left them at the age of eighteen.

Another benefit of a trust created during your lifetime is that your heirs will avoid probate when you pass away.  Probate is a very public and expensive court process that distributes your inheritance upon your death.  Even if you have a will, your heirs will still have to go through the probate courts to receive what’s rightfully theirs. The process can take anywhere from a few months to a few years and all of your affairs (including the monetary value of everything you own) will be made public for the world to see. Anyone can go to the courthouse and request to view the court file for an estate matter.

The creation of a will and trust can be complicated—one tiny oversight can void your documents in the eyes of the law. That’s why it’s important to work with an experienced estate planning lawyer if you need either of these documents rather than using a budget do-it-yourself kit. If you choose to work with a lawyer in Cornwall or elsewhere, be sure that he or she is fully able to answer all your questions and concerns and can draft documents that meet your specific needs, and not just a “one size fits all” form will.

3. Protect Your Financial Interests with Power of Attorney Forms

An accident can happen at any time with no advance warning.  Yet have you ever thought about who would handle your affairs if you were incapacitated in an accident but did not die?  Contrary to popular belief, your will, trust or other estate planning documents would not kick in to allow your family to handle your affairs if something unexpected happened to you.

The only way someone could temporarily take over your bills, access your bank accounts and make other financial decisions for you is by having a power of attorney form. Without this documentation, your children or other family members could be left in a financial lurch (and possibly unable to pay for your care) in an emergency situation.

Specifically, here are some of the things a financial power of attorney will allow your agent to do in your absence:

• make bank deposits, withdrawals or other transactions
• deal with shares, bonds and investments
• pay your bills
• buy or sell property
• hire people to take care of you
• file your tax returns
• arrange the distribution of retirement benefits
• negotiate and sign contracts
• apply for government benefits

As you can see, having a designated power of attorney is extremely important if you are temporarily or permanently disabled and unable to make decisions for yourself.

And while there are many generic financial power of attorney forms that you can get online, it’s wise to create this type a document with the help of an estate planning lawyer in the event you want to limit what an agent can do on your behalf or customize other provisions of the document.

4. Protect Your Medical Wishes With Power of Attorney for Personal Care

Have you ever thought about who would make important medical or life-saving decisions for you if you were incapacitated or injured in an accident?  Even if you naturally thought “my spouse,” have you thought about what would happen if your spouse was injured in the same accident or if he or she no longer wished to be responsible for your care?

Without a Power of Attorney for Personal Care, the Health Care Consent Act sets out the order in which a person would have authority to make health care decisions for you. That act defines various personal relationships. In an emergency situation, you don’t really want hospital staff to go through a checklist to determine who has proper authority to make your decisions for you if you are incapacitated. You want the person of your choice to be able to make important life-saving or medical decisions on your behalf right away.  Such decisions may range from whether to administer certain medications to starting or removing life-support. With a Power of Attorney for Personal Care in hand, an individual of your choosing has clearly established decision making authority on your behalf.

In addition to appointing someone to make such decisions on your behalf, you can include living will or health care directives in your Power of Attorney for Personal Care to also spell out your wishes in a medical emergency.   These wishes can range from whether you want life-saving medical treatments in a severe medical crisis (aka “pulling the plug) to whether you want to be placed in a nursing home if temporarily or permanently disabled.  With this in writing, your family members will find it easier to obey your wishes during an otherwise emotional time.

Fortunately, drawing up a Power of Attorney for Personal Care a living will or health care directive is easy to scratch off your to-do list.  The Province of Ontario offers document kits that you can fill out free of charge (https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/incapacity/poa.php). Various advocacy organizations also have information on advance directives and living wills (http://www.makingmywishesknown.ca/ is one). Just be sure to find out what witness requirements are in your province so the document is considered valid in the eyes of the law. Your lawyer could also do this for you as part of a comprehensive estate plan.

5. Create a Family Legacy

Your inheritance means so much more than the money or assets you have to leave to your children once you pass.

Instead, your “entire” family wealth consists of your values, preferences, memories and personal reflections that you are able to pass down and instill in your kids.

Just think about how much it would mean to you to hear a loved one’s voice one more time or read precious letters written to you immediately your loved one has passed.

For most people, these things are priceless.

Yet despite the priceless value, most people have not taken the time to build a non-monetary legacy that can be passed down to their loved ones in the event something happens to them.

If you are one of these people, I encourage you to start amassing a non-monetary inheritance for your children or other loved ones today.  Here are a few easy ways to get started:

• Pick a date each year (New Years Day, for example) dedicated to writing a personal letter to each of your children or other loved ones
• Keep a journal of important events, milestones and your personal thoughts about such events as they happen through the years.
• Grab a camcorder or simply use your smart phone and start a video journal where you can share your thoughts, feelings, and memories face-to-face on tape.

Finally, be sure to let certain family members (or even the attorney who created your will) l know this non-monetary inheritance exists.  That way your loved ones can easily access the legacy you’ve created for them once you pass away.

The Final and Most Important Step….Getting Started

Remember, the most important step you can take in getting your legal affairs in order is to just get started!  Consider where your family would be most vulnerable should death or incapacity suddenly occur and start to slowly put the plans in place.

Of course, if your personal or financial situation is complicated in the eyes of the law (i.e. you’re in a blended family, same-sex relationship, have a special needs child or the monetary value of your estate is quite large), I would recommend you talk to an experienced estate planning lawyer before you make any planning decisions yourself. These situations often require specialized attention to ensure your loved ones are not unintentionally disinherited or financially penalized upon your passing.

Fortunately, we’ve made the process of getting help from a Cornwall estate planning lawyer easier than ever by offering our Peace of Mind Planning Session in person or by phone or Skype. This is a consultation to review all of your estate planning needs and determine what plan works best for your and your family. We do this so you can have absolute peace of mind knowing you are making the best decisions to protect your family should something unexpectedly happen to you. The fees for your plan will depend on your needs, but the meeting itself is at no cost to you.

To reserve your free Peace of Mind Planning Session, simply call our office at 613-933-7720. We have now made it easier than ever for you to schedule an appointment. Just click on this link, choose “Book a Call”, and book a time with Michele.

Happy Planning!

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