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Bulletin | Covid-19

Personal Estate Planning & Planning Opportunities In The Time Of Covid-19

Fasken
Reading Time 6 minute read
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Estate Planning Bulletin

Given the current upheaval in the world, it is natural and advisable for everyone to turn their mind to the state of their own personal affairs and consider if they have made the appropriate plans for the protection of their assets and their family members in the event of an unexpected turn of events. Furthermore, this time may also present planning opportunities, particularly for those that may wish to set up trusts or implement planning for their corporations. With the assistance of our lawyers, British Columbia’s mandate for “social distancing” need not be an impediment to the preparation of the necessary documents to achieve peace of mind.

Fasken’s Wills, Trusts, Estates and Charities team of lawyers is able to prepare all required planning documents customized to meet your wishes and specific circumstances and to guide you through amended execution rules, without any need for in-person meetings. If you have not done any planning or wish to update your planning, the entire process can be undertaken without any risk to your health and safety. If you already have planning documents with Fasken, we can review them with you to ensure they are up-to-date. We summarize below some of the main personal planning documents and planning opportunities you may wish to consider.

1) Will

A Will is a legal document that appoints an executor to distribute your assets after your death in accordance with your stated wishes. The Will can also appoint guardians to care for your minor children and can set out your funeral or cremation wishes.

The laws in British Columbia contain very stringent signing and witnessing requirements for Wills. With the COVID-19 situation, new rules have been enacted with potentially more to come, to make accommodations during the pandemic to ensure safety during execution. We do understand every client’s situation will be different. Our lawyers are well-informed on the new rules and will advise you as to the best way for you to sign your Will safely and ensure that your wishes will be carried out.

2) Trust

A Trust is a vehicle created by a document and other steps. A Trust can hold assets during a person’s lifetime and also distribute what remains following a person’s death. The person appointed as Trustee would deal with the Trust assets in accordance with the terms of the Trust document. The Trust is often used in place of a Will where people want to avoid probate fees or litigation against their estate, including challenges to their Will, or where there is a wish for privacy. It is not a requirement for a Trust to be signed in front of a lawyer but if you are considering setting up a Trust, it is important to consult a lawyer with expertise in Trust law. A lawyer can help ensure that a Trust is appropriate for your specific circumstances, is validly set up (safely), and will not be subject to challenge or trigger any adverse tax consequences.

3) Enduring Power of Attorney

An enduring power of attorney (“EPOA”) appoints a person, who can be a family member or a professional, to act as your agent on your direct instructions while you are able or to act as your trustee in your best interest in the event of your mental incapacity, respecting your financial and legal matters during your lifetime. This is an important document that everyone should make, regardless of age and health condition, to ensure that there is a trusted person who can take care of your finances and provide for you and your family members, employees or others who are dependent upon you, if you are not able to do so.

While in regular circumstances, an EPOA would be signed either before a lawyer or a notary, we are able to assist you in the preparation of an EPOA and advise on the best way for you to execute the EPOA safely in your specific circumstances without an in-person meeting.

4) Health Care Representation Agreement

A Health Care Representation Agreement and Advance Directive allows you to set out your wishes, values and beliefs for your medical care and to appoint a representative to make decisions related to your health care, personal care matters, and even some limited basic legal and financial matters in the event that you are incapable and not able to make your own decisions. You can also address end-of-life instructions, including your wishes in relation to medically assisted dying. If you do not have this document in place, the person that the health care system or courts look to may not be the person you would have wanted making those decisions for you.

Similar to an EPOA, a Representation Agreement is typically signed before a lawyer or notary. Again, we are able to assist you with the preparation of a Representation Agreement that reflects your wishes and advise on the best way for you to safely execute the Representation Agreement.

Crisis in Failure to Plan or Improper Planning

If capacity is lost and proper planning documents are not in place, there will be added delay and costs. For example a person who does not have an enduring power of attorney means that the family will have to apply to court for a committeeship order. These legal processes do not permit immediate attention to the incapable person’s needs or the needs of their family, causing additional turmoil and financial pressure. However, if capacity has already been lost, there are ways to access the judicial system to put a person in place of authority. The courts consider these matters of “urgent priority” and these types of orders can be obtained, even with the reduced availability of the court system at this time. We can advise on what needs to be done in these circumstances.

In addition, planning should be done with proper advice and be designed to reflect each person’s wishes and personal circumstances. When documents are prepared without proper advice and consideration of a person’s personal circumstances, the improper planning can cause many issues when the documents are used (i.e. third parties such as banks or government authorities may refuse to accept the document) and can also lead to more potential disputes.

Planning Opportunities

On a positive note, with the temporary lower value of the stock markets and businesses, this is an ideal time for consider Trust and/or corporate planning. Lower values will help to minimize tax implications on the transfer of assets into certain types of Trusts. This is also an ideal time for business owners to pursue estate freezes of their companies. Some of the potential benefits of estate freezes include minimizing and deferring capital gains payable on death, avoiding probate fees, facilitating succession planning and added creditor protection. If you have already done an estate freeze previously, you may wish to consider doing a “thaw and refreeze” of your companies if the current business values are lower.

Seek Proper Legal Advice from Expert Lawyers

If you would like to create or update your personal planning documents, discuss the necessity of planning by family members or take advantage of planning opportunities, please contact one of Fasken’s estate and trust lawyers. COVID-19 has made it clear that taking personal protective measures is critical. We can advise and guide you through the planning process and safely help you prepare and implement proper planning that is appropriate for your own personal circumstances and wishes.

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