Three Keys of an Estate Plan

Death is the last thing that many of us wish to discuss. However, it is important to make plans to ensure that our personal and financial matters are properly dealt with after we are gone. The three legal documents that should form the basis of your estate plan are:

1. Will

A will sets out how your property will be distributed after you die. Your will should:

• appoint a person ("executor") to handle your affairs after your death;
• identify the powers that your executor will have; and
• set out how your assets are to be distributed.

Assets are often distributed directly to a beneficiary. However, when minor children are involved, the executor holds assets intended for them in trust for a certain period of time. A will can also appoint a guardian for your minor children; however, courts can revoke or change this appointment.

Keep in mind the tax consequences of the distribution of your assets. It is often important to obtain tax advice to ensure that your gifts are what you thought they were (after taxes) and to minimize any taxes payable upon your death.

If you already have a will, review it frequently to ensure that it accords with your current wishes. A will made prior to marriage will be void upon marriage (unless you expressly state that you made the will in contemplation of marriage). While a marriage will void a prior will, divorce does not. Therefore, upon separation or divorce, you should re-examine your will.

If you do not have a will, your relatives will have to make a court application to have someone appointed to handle your affairs. Your assets will then be divided according to the Intestate Succession Act

2. Enduring Power of Attorney (EPA)An enduring power of attorney gives a person you choose the power to make decisions for you about your financial affairs after you are unable to do so yourself. 

If you do not have a PD, and you become mentally incapable, your relatives will have to make a court application to have you declared a “dependent adult” and the court will appoint a person ("guardian") to handle your personal matters.

Conclusion