Estate Planning Includes: • Incapacity Planning • End of Life Planning • Can also include family law planning (Co- habitation and Marriage Agreements);and • Business Planning (Shareholder Agreements) ESTATE PLANNING ESSENTIALS & NEW LAW IN BC Presentation to the Probus Club of North Shore Vancouver November 14, 2011 By Nicole Garton-Jones 2 1 Incapacity Planning New Incapacity Legislation 1. Enduring Powers of Attorney • Bill 29 (parts of which were brought into force September 1, 2011) makes many – Manage Legal and Financial Affairs amendments to BC’s existing tools for 2. Representation Agreements planning ahead: – Manage Health Care and Personal – enduring powers of attorney Care Decisions – representation agreements; and 3. Advanced Directives - new – add a new third option: advance directives – Set out health care wishes 3 4 1
Highlight of Changes for POAs A few POA Highlights, con’t effective September 1 • Old enduring clause repealed; extensive • Attorney must now sign before witnesses new provisions for enduring POAs • Two witnesses for adult and attorney • Existing enduring POAs grandfathered required unless one is a lawyer or notary • Capacity presumed – witness cannot be employee or agent of attorney • Springing POA allowed, need to specify if active now A few POA Highlights, con’t A few POA Highlights, con’t • Payment of attorney - no compensation • Not dispose of property gifted by Will unless expressly allowed and sets amount unless necessary or rate, but reimbursed for expenses • POA disposing of property in Will – • POA ends: attorney dies, incapable, beneficiary receives equivalent amount bankrupt, convicted of proscribed offence from estate or if adult victim or at end of marriage or • May not make a Will marriage-like relationship 2
New Legislation - Advance Legislative Changes re Directives Representation Agreements Representation Agreement Act Health Care (Consent) and Care Facility (Admission) Act • Section 9 repealed and new provisions - no longer need consult lawyer • New Part 2.1: new provision for Advance • Cannot make Sec. 9 RA for finances Directives • Gives legal effect to Living Wills • Existing Sec. 9 RAs grandfathered • Rep Agreements override ADs • Must be signed before two witnesses unless one witness is a lawyer or notary Legislative Changes re RAs – What to do if there is no POA or RA cont. • Notaries can be sole witness to Sec. 9 If there is not an enduring Power of RAs Attorney and/or a Representation • Rep has access to adult’s information Agreement in place, and a person becomes incapable of making their own • Remuneration must be in RA and health care or financial decisions, the approved by Court person’s loved one may find themselves in a difficult and costly position, especially if there is family conflict 12 3
Committeeships End of Life Planning • A committeeship is a way of protecting the interests of a dependent adult who is incapable of managing his or Will her affairs, his or her person, or both –Appointment of Executor – Possible to have separate or joint committees • Currently, the Patients Property Act is the statutory –Beneficiaries of Assets framework for appointing a committee for an incapable –Appointment of Guardian for Minor adult Children 2 (1) The Attorney General, a near relative of a person or other person may apply to the court for an order declaring that a person is, because of –Trusts for Minor Children or Disabled (a) mental infirmity arising from disease, age or otherwise, or (b) disorder or disability of mind arising from the use of drugs, Beneficiaries incapable of managing his or her affairs or incapable of managing himself or herself, or incapable of managing himself or herself or his or her affairs. 13 14 End of Life Planning End of Life Planning Trusts in Wills Non-Will Planning • Tax-reducing trusts – tax savings for • Joint Tenancy with right of survivorship beneficiary through income splitting (eg. House, Bank Accounts) • Spousal trusts – second marriages • Life Insurance – designate beneficiary • Spendthrift trusts – black sheep • RRSP, RRIF, TFSA - designate beneficiary (spouse preferred) • Disability trusts – ensure entitlement to government benefits is preserved • Family Trusts 15 16 4
WESA OVERVIEW – cont - WESA Background • Consolidates into a single statute, many • Wills, Estates and Succession Act, S.B.C. 2009, c. existing statutes or statutory provisions, 13 (the “ WESA ”) including: – Wills Act • proclamation date TBA (AG advises sometime in – Wills Variation Act 2011) – Survivor and Presumption of Death Act – Estate Administration Act – Law and Equity Act • Reflects report of the BCLI: “Wills, Estates and Succession: A Modern Legal Framework” BCLI – Probate Recognition Act Report No. 45, June 2006 – Escheat Act TERMINOLOGY SURVIVORSHIP RULES COMMON DISASTER - COMMON DISASTER - Old New OLD NEW • Will Maker • Presumption that each � Testator • Presumption that older survived each other died before younger (subject to contrary (subject to contrary • Intestate successor � Intestate heir intention in instrument) intention in will) • Joint assets severed and • Spousal home (includes � Matrimonial home held as tenants in co-op housing and mh) common (subject to contrary intention in � Grants of probate & instrument) • Representation grant letters of administration 5
SURVIVORSHIP RULES - cont - INTESTATE SUCCESSION NEW OLD SURVIVAL CLAUSES - SURVIVAL CLAUSES - • Parentelic system • Degrees of Kinship OLD NEW • where the deceased has • the intestate estate no spouse or children, the passes to the closest kin • Wills might provide that • Beneficiary must survive estate passes to the • Degrees of kin are beneficiary must survive at least 5 days or such parents of the deceased counted upward from the 15/30/45 days to receive longer period as and their descendants deceased to the nearest benefit provided in instrument (the deceased’s siblings, common ancestor and • If less than 5 days, then nieces, nephews, etc.), then down to the relative and, if there are none, to conclusively deemed to the grandparents and have died before their descendants and so deceased on until an heir is found. INTESTATE SUCCESSION – cont. INTESTATE SUCCESSION – cont. • under the new parentelic system, the OLD NEW descendants of the nearest common • Spousal share • Spousal share ancestor take from the deceased’s estate – Household furnishings – Household furnishings – First $65,000 – $300,000 & ½ residue before descendants of a more remote OR – 1/2 or 1/3 residue ancestor – $150,000 & ½ residue – Life interest in home • This system will allow a more even if descendants not common division between the two sides of an – Spouse has right to intestate’s family acquire home within 180 days of death 23 24 6
FORMALITIES OF WILLS NEW PROVISIONS FOR WILLS OLD NEW � Undue influence (if will-maker was in a position of potential dependence on or domination of another person, then in proceedings alleging undue influence over the will-maker, the onus of establishing � Age 19 or married or in � 16 that a gift was not obtained by undue influence is on the person who wishes the gift to be upheld) military • Automatic revocation of Wills • Subsequent marriage � Expanded rectification powers given to court by a subsequent marriage of invalidates a will willmaker is abolished � Abatement rules (both land and personal property are to be reduced together. Property charged with a specific debt abates first, followed by � Gift to witness void • Gift to witness not residue, then general legacies, then specific legacies) automatically void � Gift of land includes � Extrinsic evidence, including evidence of intent, is admissible � “purchase money security mortgage unless interest” passes with property otherwise stated Common Law Presumptions Family Law Planning Abolished: • Gift to child is an advance of that child’s • Starting point - equal division of assets if inheritance married • Legacy in Will is revoked if will-maker made a • Can be rebutted where unfair gift during his/her life of the same amount to that • Marriage agreement beneficiary – Second marriages • Debt owed by will-maker is satisfied by a legacy equal to or greater than the debt (under WESA, – Unequal assets debt continues to be enforceable against the • Constructive claims where common law estate) • Attorney General White Paper 27 7
Business Owner Planning • Sole shareholder corporation or proprietorship (eg. professional) Thank you! • Family Business Nicole Garton-Jones, B.A., LL.B. – Consider estate freeze Heritage Law • Business involving 3 rd party Direct: 778-786-0615 ext.111 – Shareholder/partnership agreement Email: nicole@bcheritagelaw.com – Life insurance Website: www.bcheritagelaw.com 30 8
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