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The difference between a power of attorney and an executor

Many people are aware that they need to name certain individuals to care for themselves and their property should they become incapacitated or pass away. What they may not quite understand is that these two scenarios actually require different types of planning and the naming of distinct types of caretakers. Knowing the difference between a power of attorney and and executor is critical for British Columbia families seeking to plan for the future.

Power of attorney gives an individual or individuals the right to act on a person's behalf if that individual is unable to do so. People often will name one power of attorney for health and care, and another for finances. These jobs can both be done by the same person, or in some cases, co-powers of attorney are named as a check and balance for important decisions.

Tips for those who resolved to get their wills in order this year

Getting finances in order is a common New Year's resolution. For British Columbia individuals and families who have resolved to consider their affairs and plan for the future in 2020, wills and estate plans are an important consideration. While it can be hard to discuss death, incapacity or the potential that tragedy may strike the family, taking things step by step can help ease the challenges of this important task.

An important first step to getting affairs in order is to simply make an appointment with an estate planning lawyer. Meetings with one's bank or financial advisor are also a good idea in this process. Speaking with professionals about options and processes can make things seem much less overwhelming at every stage in the planning process. It is also very important to have a legal advisor on hand to make sure the drafted will is legitimate.

Can power of attorney documents safeguard beloved pets?

Pet owners take many steps to make sure their pets are cared for, especially if the owner has to leave town or can otherwise not care for them. While these short breaks are often planned for, many British Columbia pet owners do not think to put safeguards in place for their pets should they become incapacitated. Power of attorney documents, living trusts, and other preparation can prevent confusion about who should care for a pet in the case the owner is no longer capable of doing so.

Pets are legally considered property. When someone becomes incapacitated, their power of attorney documents designate who will become responsible for their property, including pets. Without this documentation, a legal process may be needed to determine who will take on guardianship of one's estate, including who will be responsible for pets. Either way, the person with guardianship will have the latitude to make decisions, which may mean they could give the pet away if they feel it is a drain on the estate.

How to discuss power of attorney and estate plans with family

When families get together, estate plans are probably the last thing most people want to discuss. It can be an emotional topic for many, and can feel quite morbid to raise during the usual holiday get-togethers. However, it is important that British Columbia individuals start these conversations with their families, so those who are named as power of attorney or executor have clarity on what is to come.

For some people, it is easier to approach these issues organically, when they naturally come up in conversation. This typically involves breaking the conversation into smaller topics and raising them when the time feels right. This works well for families who speak fairly often and candidly.

Is it worth transferring property before death to avoid probate?

Those who are planning the future of their estate often have have concerns about fees when it comes time to transfer their wealth to next of kin. These concerns are amplified for those who own a significant amount of property, as probate fees increase for higher-valued estates. Many homeowners or wealthy individuals in British Columbia have questions about how they might take actions prior to passing away to avoid expenses where possible.

While there are some options that can be explored, alternatives often come at an even higher cost than probate. For example, an aging parent may think it wise for his or her children to buy out their home prior to them passing to avoid probate fees. However, the costs involved in a real estate transaction, such as land transfer taxes, could outweigh the prospective probate costs. Additionally, conflict over the use and upkeep of the home could arise if the parent and intends to remain living in the home even after a buyout from children.

When is it time for the power of attorney to take over?

When someone is no longer able to care for their own financial well-being, a designated individual takes over. The financial power of attorney is an important tool to help British Columbia seniors and their families ensure finances are taken care of even if capacity diminishes. But, deciding when it is appropriate to turn control of finances wholly or partially over to the power of attorney can be a difficult balance, especially for those who value their independence. Experts recommend looking for certain signs to determine if the time is right to enact a power of attorney.

With the large aging population in Canada, a growing number of children will soon take on the role of caring for their parents' finances. Signs that enacting a power of attorney may be necessary include missed bills and confusion about finances. This is a delicate subject for many, so being gentle in broaching the subject and building a support team that includes third-party legal and financial advisors is a good idea.

Consider digital assets when preparing wills

Those who are planning for the succession of their wealth often focus on real estate, bank accounts, beloved items and dependants in their estate plans. However, an increasing number of less tangible assets are making their way into British Columbia wills. Digital assets, a term for access to accounts and technology that may carry financial or emotional value, is a growing topic of discussion in estate planning circles.

"Digital asset" is an umbrella term that can apply to any number of item or accounts. This may include online accounts like emails, social media accounts, blogs, cloud-based document folders, online subscriptions and rewards account. It can also include login information to access hard drives on a computer or phone. Finally, online subscriptions and payment methods should be considered as subscriptions will likely need to be cancelled after death.

Estate administration: When one executor lives abroad

Having an estate plan is vitally important for all adults regardless of their circumstances. In fashioning an estate plan, British Columbia residents must keep in mind who will be involved in estate administration once the time comes and there are a few things to think about when choosing an executor -- especially if the executor doesn't live in the country. For example, if a parent names two children as executors and one lives abroad, there may be some hurdles to overcome, but it could work.

Firstly, anyone who lives outside of Canada who is named an executor could renounce that decision by signing a renunciation form. If a nonresident executor does choose to take on the role, it might be difficult for him or her to access Canadian bank accounts, even though he or she has the right to make decisions regarding the estate. If the person lives in the States, tax implications might have to be overcome as well.   

Wills: When an adult child and executor lives abroad

Having a comprehensive estate plan is a wise move for every individual, especially when children are involved. British Columbia residents, however, who have adult children living stateside should have another look at their wills to ensure all legal aspects are met and that there won't be issues when the time comes for those wills to come into play, especially when that adult child is not only a beneficiary, but also an executor. Getting over some of the hurdles may be time-consuming and expensive.

If one of the executors of a Canadian will lives in the United States, he or she will likely need to get a foreign executor's bond before the will can be probated. That bond should be equal to or up to two times the value of the assets of the estate. Failing that, the person can ask the court for an order to forgo the requirement for bonding which can take a lot of time and increased legal fees. It is also not a sure thing the court will grant that request. 

Wills: Keeping the peace in British Columbia families

Talking about an inheritance may not be the easiest discussion parents will ever have with their adult children. Speaking to children about wills and other estate planning documents may not be pleasant, but it is necessary. British Columbia residents who want to keep peace in their families when they're gone should really discuss who will be getting what when the time comes and give their children the chance to weigh in with their thoughts and feelings.

No parent wants to feel that their children believe they're being treated unfairly. Discussing estate planning -- especially when blended families are involved -- allows siblings to avoid a potential fallout regarding their inheritance. Open, honest discussion is one way to make everything work and to help everyone involved understand where each person is coming from. 

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