Level 9 - You have updated your Powers of Attorney and Will within the last five years.
Why it Matters
Who’s going to be in charge of your affairs if something were to happen to you? Do you really want to default to the laws of your province to divvy up your assets? Don’t make an already stressful situation even more stressful – make sure you have up-to-date Powers of Attorney and a will to help your loved ones understand your wishes.
Goals for this Level
In Level 9, we want to do two things (and we bet you can guess what they are based on our super uncreative title…):
You have Powers of Attorney and a Will that have been updated in the past 5 Years
Someone you know and trust (ideally your Attorneys and your Executor) have a copy of your Powers of Attorney and Will, and know where the originals are stored *
1 - You have Powers of Attorney and a Will that have been updated in the past 5 years
What are Powers of Attorney?
A Power of Attorney is a legal document that gives someone you trust the authority to make decisions on your behalf if you are mentally incapable of making these decisions yourself. The person you name does not need to be a lawyer. In this case, “Attorney” just means “Agent” or “Representative”.
There are two broad types of Powers of Attorney:
A Power of Attorney for Property lets another person act on your behalf in financial matters, such as paying bills.
A Power of Attorney for Personal Care lets someone else make health-care decisions on your behalf.
What happens if I don’t have Powers of Attorney?
Although laws vary from Province to Province, generally speaking, if you lose your mental capacity and do not have a valid power of attorney document in place, someone will need to get authority from the court to manage your money and property. Suddenly, something as simple as paying your mortgage from your bank account when you are in hospital can become a major hassle. It’s important to note that most banks will not automatically grant your spouse / parents / immediate family / trusted friend access to your bank accounts unless they have a valid Power of Attorney.
What’s in a Will?
A will (also known as a Last Will and Testament) is a legal document that describes:
Who you would like in charge of handling your affairs, also known as an Executor
Who you would like in charge of caring for your children, also known as a Guardian
Who you would like in charge of caring for your children’s finance, also known as a Trustee
Who you would like to receive your property, also known as a Beneficiary
What happens if I don’t have a will?
Although laws vary from province to province, generally speaking, if you do not have a valid will in place when you pass away:
You do not get a say in who will look after your children – the Court picks
You do not get a say in how your property is divided – the laws where you live will determine who gets what
It may take longer to settle your affairs and may be more stressful for your family because there are more legal processes to go through
You may miss the chance to make any charitable donations
How do I get Powers of Attorney and a Will?
There are two common ways to get these documents:
Through a lawyer: The lawyer will typically send you an information questionnaire to understand your financial situation, family situation, and preferences. The lawyer will meet with you once to answer any questions, and another to review and sign your documents.
Through digital platforms like Willful. This is like tax-software but for wills. It will guide you through step-by-step questions to complete your documents. Do not confuse Willful with ‘fill in the blank’ will-making kits. Willful has logic built into it to customize your documents to your unique situation.
The big differences between using a lawyer and using a digital platform like Willful are:
Ability to offer advice: A lawyer is the only way you can get advice on your estate. If you have specific questions about your situation you should seek legal advice from a lawyer.
Ability to handle complex situations: A lawyer will be able to customize documents to fit your unique situation better than a digital platform. For example, if you are separated but not divorced, if you want to write someone out of your will, if you want to add custom clauses or complex wishes, if you want to pick an executor who lives in another province or country, or if you have assets in other provinces or territories, you want to consider working with a lawyer.
Ease of updating: Digital platforms like Willful will allow you to make unlimited changes to your will for free, whereas when you work with a lawyer, you will need to pay for each update you make to your estate documents.
Cost: As you can imagine, working with a lawyer will be more expensive than using a digital platform. At the time of publishing, couples could use Willful to build their wills and powers of attorney for $249 Canadian plus tax. A 2019 Canadian Lawyer Magazine survey estimated the cost of generating a simple will at $300 to $400 per person, plus an additional $250 to $300 for powers of attorney.
2 - Someone you know and trust (ideally your Attorneys and your Executor) have a copy of your Powers of Attorney and Will, and know where the originals are stored
Having the documents signed and printed is a major first step, and to make sure they are ready to be used if (Heaven forbid) you ever need them, it’s important that your Attorney and Executor know the key role they may be called on to play for you, have a copy of the documents, and know where the originals are stored.
Although this is rapidly changing, across Canada, many provinces only accept original copies of Powers of Attorney and Wills, so it's critical that the originals are stored in a safe place (e.g. NOT at the bottom of the second pile third from the back in your closet) and can be easily located by those that need them.
Where can I go to learn more?
Willful has a terrific learning centre with answers to many detailed questions, including more details on what an executor is and how you can choose one.
GetSmarterAboutMoney.ca (operated by the Ontario Securities Commission) also has lots of helpful articles: https://www.getsmarteraboutmoney.ca/plan-manage/planning-basics/wills-estate-planning/
This is also a great time to check out your beneficiaries on all your investment accounts, savings accounts, and your insurance. We listened to a gut-wrenching podcast where the assets went to a former partner, and the estate got stuck with the tax bill.
We are not affiliated with Willful or any other company for that matter. We only support or endorse companies we enjoy. We feel the best way to be free from conflicts-of-interest is to make sure we are free from conflicts-of-interest.
Stay tuned every Thursday for a new level in the series!
In case you missed it:
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