Petley-Jones & Co Law Corporation

Ralph Petley-Jones

Nanaimo Lawyer

Ralph Petley-Jones  B.Comm.  LLB
5732 Hammond Bay Road, Nanaimo
British Columbia, Canada V9T 5N2
250 758.7370
fax 250 758.8703
 

COMMON ESTATE PLANNING MISCONCEPTIONS

There are a number of estate planning misconceptions that crop up in our practice on a regular basis. Some of these myths are so ingrained we have a hard time convincing people that what they have learned at a cocktail party is not the law.

The government will take all my property if I have no Will.

If you have no Will, your spouse or your next of kin will inherit your estate. If you have only very distant blood relatives the provincial government will have a claim to your estate.

My spouse will inherit everything if I have no Will.

This is only true if you have no children or you have a small estate. If you have children, your estate will be shared between your spouse and your children if it is over a stipulated size.

I have a "legal" Will kit so I do not need a lawyer-drafted Will.

One of the biggest misconceptions is that there is something magic in the word "legal." A marketing genius coined this phrase to sell these kits. If you follow the instructions to the letter (for example, you don't have your spouse or one of the beneficiaries witness the Will), you will simply have a Will that meets the basic requirements of the Wills, Estates and Succession Act for the enforceability of the Will as a legal document. There are two main problems with these kits. First, people are not clear in their writing, so the meaning of the words in the Will is uncertain. Second, estate planning problems that are not apparent to the untrained are not considered.

My executor will straighten out any problems with my Will.

The executor's powers are more limited than most people believe. Executors are trustees and are held to a high standard of good faith. An executor will have limited discretion to do certain things, for example, picking a real estate agent. The executor takes their instructions from what is in the Will and cannot fix problems. If there is a problem in the interpretation of the Will, the issue might have to be taken before a judge for directions.

I can disinherit my children as long as I give them $1.00.

The Wills, Estates and Succession Act, Division 6, provides that a spouse or a child may vary the Will (make a claim) if adequate provisions have not been made for their support and maintenance. The courts have taken this to provide them with fair latitude in providing benefits to disinherited spouses and children. Bequeathing $1.00 is not going to convince a judge that you have been fair. Under certain circumstances a court will, however, allow disinheritance.

I don't need a power of attorney because all my property is in joint tenancy.

This is only partially true. Most "joint" bank accounts provide that there is a right of survivorship and either signatory may take out all the money in the account. If a spouse becomes mentally incapable, then the other spouse can deal with the funds in the bank account. Of course, you can also have bank accounts that require two signatories. In this situation, if one of the individuals becomes mentally disabled, then the other party will not have access to the funds. The biggest problem is if the house is in two names—both parties must sign transfers and mortgages, not just one. RRSPs and RRIFs can be in one name only.

I don't need a Will because all my property is in joint tenancy.

If your descendants are not the same as the surviving joint tenant and the survivor dies after a five-day period, your descendants will not receive part of the property. A Will could name your descendants as beneficiaries of the surviving joint tenants Will.

I don't need a health representation agreement because I have a power of attorney.

Powers of attorney only deal with financial matters. If you don't have a health care representation agreement, the Health Care Consent Act provides for a spouse or family member to make decisions. If you don't want a family member or you only want one of your children to make your health care decisions, you need a health care representation agreement. There are, of course, other reasons to have this document in place. Old-style living Wills do not meet the standard of the Representation Agreement Act, which has been in force since 2000.

Like everything else in life, if you want the peace of mind of having your estate matters organized, you must take the appropriate steps to obtain proper advice.

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