Will and Estate Planning FAQs
1. Do I need a lawyer to create a will? No, you don't. But it's a very good idea to have a lawyer help you with your will. If you do your will yourself, there is a good chance your will may be (a) inconsistent, (b) vague or ambiguous, (c) lacking in legal requirements, (d) legally valid, but poorly planned, or (e) susceptible to legal challenges after you have died. Don't do it yourself. Having a properly prepared will is too important!
2. Do I need to "avoid probate"? Probate is the process of a court overseeing the administration of your estate. In some jurisdictions (Ontario comes to mind), probate fees are a percentage of the part of your estate that goes through probate. In other words, in certain jurisdictions, your probate fees will increase proportionately to the value of your estate. In Alberta, probate fees are reasonable and do not increase as the value of your estate increases. As such, if you are writing a will in Alberta, there is less reason to avoid probate. In many cases, planning around jointly held property and insurance proceeds is done so that those items will not go through the probate process. Often, this is more an issue of efficiency than of cost. Jointly held property will, for example, more quickly pass to a surviving spouse as compared to property that is run through the probate process. Ditto for insurance proceeds.
3. Is there a way to plan my estate such that I will leave something to my family even if I am significantly in debt? Using life insurance is often a good way to accomplish this goal. If done properly, insurance money can flow to your beneficiaries even if you die in debt. Using insurance in this way often makes sense for young families who have few assets and large debts, since the family may be left in a vulnerable situation if one of the spouses dies and all of the assets flow through the estate in such a way that they can be accessed by creditors.
4. Do I need witnesses when doing a will? Not always, but in most cases, yes. In Alberta, a person can create a holographic will. A holographic will is simply a will written entirely in the testator's own handwriting. If you have prepared a holographic will, it does not need to be signed by witnesses to be legally valid. I strongly recommend against writing holographic wills because a will prepared without legal advise is a will that is more likely to contain significant mistakes and is more likely to face legal challenges from friends and family after you have died.
5. Why should I bother to get an enduring power of attorney and personal directive done when I do my will? Is it really worth the extra expense? The short answer is yes. I typically bundle everything into a package, so if you're doing a will with me, it will be the same price as it would be if you were doing a will, enduring power of attorney and personal directive. Many other lawyers, however, charge additional fees for doing the enduring power of attorney and/or personal directive. Even if you're paying extra for those documents, it's worth the expense to get them done. The will protects your loved ones, but the enduring power of attorney and personal directive protect you in the event that you become mentally incompetent, either due to mental decline from old age or due to a brain injury. In some respects the enduring power of attorney and personal directive are even more important than the will. Not having those documents may negatively affect your quality of life down the road.
6. Is an Alberta will valid in other provinces or countries? The simple answer is: maybe. If you own property in another jurisdiction or you're moving to another jurisdiction, you should definitely check with a lawyer in that jurisdiction about whether an Alberta will is going to be recognized there. The system of law in Alberta is based on English common law. If you're in a common law jurisdiction, there's a decent chance that your Alberta will is going to be recognized. That being said, there are even some subtle and not-so-subtle differences among Canadian provinces when it comes to law related to wills. In civil law jurisdictions, it's anyone's guess whether your will is going to be recognized. To be on the safe side, if you have property, say, in China, it may be a good idea to have a will done specifically for your Chinese property that complies with Chinese law. That may even be the case for property in British Columbia.
7. How can I protect myself from financial abuse when I get older? Proper estate planning can go a long way towards protecting an elderly person, or a person suffering from dementia, from financial abuse. Make sure to complete an enduring power of attorney and a personal directive. Consider having alternate representatives appointed on each document. In many cases, it may also be a good idea to require your attorney (the representative you have appointed under your enduring power of attorney) to provide regular financial reports to some of your other family members or friends.