Monday, November 9, 2009

September 21, 2009--Estate Planning Basics

Greetings! My regards to everyone and I hope you enjoyed your summer.

I have a couple of newsletters planned for the next month and will write about the state of investment markets the next time.

This time I want to write in some detail about two planning issues: the ENDURING POWER OF ATTORNEY and the PERSONAL DIRECTIVE [or Living Will]. These two documents are essential tools in your planning for the future, regardless of your age, and take effect should you become unable, due to physical or mental incapacity, to make your own decisions. I encourage you to read on and explore the links that I provide.

PERSONAL DIRECTIVE WHAT KIND OF INSTRUCTIONS CAN I LEAVE IN A PERSONAL DIRECTIVE?

Your instructions can be about any or all personal matters that are non-financial, such as:

• medical treatments you would or would not want;

• where you would like to live;• who you would like to live with;

• choices about other personal activities (recreation, employment or education);

• any other personal and legal decisions, and

• who you want to care for and educate your minor children if you are not capable of doing so.


So how does a Personal Directive differ from a will? It provides directions about non-financial matters should you, during your lifetime, become unable to direct your own affairs. The Personal Directive allows you to put your wishes in writing and appoint an agent to act on your behalf to see that your wishes are carried out. This is important because your relatives and friends do not automatically have the legal right to make decisions for you.

The Government of Alberta has established a Registry for Personal Directives to make it easier for interested parties, for example medical staff, to find your Personal Directive and contact your agent. Please see the following link to a pamphlet provided by the Government of Alberta on Personal Directives.

http://www.seniors.gov.ab.ca/services_resources/opg/persdir/publications/pdf/OPG1645.pdf

When you look at the list above of the potential purposes of the Personal Directive, you may not feel strongly about all the items, or they may be items you have not thought about. But you may feel strongly about your medical care, or who will look after your children during a period of mental incapacity. So don't hesitate to write a Personal Directive now about those things that you feel strongly about. You can add to or amend your Personal Directive at a later time.

The most common reason that individuals write their Personal Directive is to direct their medical care and communicate their wishes regarding extraordinary measures to prolong life in the case of a very serious illness. Without the Personal Directive, doctors are left responsible to use all extraordinary measures regardless of what family and friends may say. The Personal Directive is your way of having your wishes acted upon. Legislation regarding Personal or Advanced Directives varies by province.

For my clients in BC, please see--

http://www.viha.ca/advance_directives/faq.htm#today

My clients in Ontario, please see--

http://www.culture.gov.on.ca/seniors/english/programs/advancedcare/docs/AdvancedCare.Guide.pdf


ENDURING POWER OF ATTORNEY

The Enduring Power of Attorney is complementary to the Personal Directive. The Enduring Power of Attorney allows you to provide directions and appoint an agent [your "Attorney"] should you become, during your lifetime, unable to make decisions related to your financial affairs. The Enduring Power of Attorney is cancelled at the time of your death at which point your Will applies to your estate. The Enduring Power of Attorney would allow your agent to keep your financial life going should you become incapacitated. For example, without the Enduring Power of Attorney your family and friends would not have access to your individual bank accounts to pay your bills, or have authority to watch over and direct your investments. To read more about the Enduring Power of Attorney, see--

http://www.justice.gov.ab.ca/dependent_adults/enduring_powers_of_attorney.aspx

Needless to say, you will want to choose your agent very carefully. Be sure to consult your choice to confirm his or her willingness to be appointed. Spouses will typically appoint one another. If you are not sure whether you have written a Personal Directive or an Enduring Power of Attorney--this may have been done when your Will was done--check to see which documents are with your Will or ask your lawyer.

Looking after all three documents can be done with the assistance of a lawyer which allows you to benefit from her or his legal expertise. Many lawyers provide this expertise at a reasonable cost, assuming your affairs are not complicated, as a public service. Registry offices and some Drug Stores will have generic, fill-in-the-blank forms which, while lacking personal legal advice, are much better than nothing. Please let me know if you have any questions.

I hope that you will take this newsletter as a prompt to undertake your drafting of a Personal Directive and Enduring Power of Attorney. Clearly we do not hope for a future incapacity. But should it happen, we want to be prepared, we want our wishes to be clear and we want to lessen the stress on our loved ones.

Cheers!

Tom

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