February 2019 - Garton & Harris

It’s inevitable. Everyone — if he or she is lucky — gets old. And when thinking about the future, many British Columbia residents think about estate planning and that includes a power of attorney. Planning ahead for old age is one of the most important things a person can do and that means choosing someone to make crucial decisions when one can no longer do so oneself.

Seniors are some of the most vulnerable segments of society. Choosing an individual to help manage their affairs is not only important, but necessary. A person should never feel pressured by the one to whom they’ve granted the authority to look after his or her financial and personal needs. An individual needs to be capable mentally when signing a power of attorney for the document to be legal and valid.

A person to whom a power of attorney is granted can do nearly everything the person granting that authority can do when it comes to finances and property. He or she can sign cheques, pay bills, do banking, sell real estate and buy goods. He or she can’t make changes to an existing will or life insurance policy or give the power of attorney to anyone else. As long as the testator can make decisions on his or her own behalf, he or she can do so without the help of the person who would be acting on a power of attorney.

A power of attorney — as with other estate planning documents — can be complex and confusing. A British Columbia lawyer can bring clarity to those areas which may seem a little cloudy. Older folks may need an explanation that a power of attorney is not taking the control from them over their finances, but is a safeguard should they need help making decisions in the future.

People work hard for their money. Having a family’s wealth protected from unforeseen events like divorce will likely ensure that when the time comes for estate administration in British Columbia, there won’t be issues connected with a divorce. The last thing prosperous Canadians want is for the money they’ve worked so hard for to end up going to those who they wouldn’t want it to go to and that sometimes means to a divorced adult child’s former spouse or common law partner.

The issue is apparently causing many affluent Canadians grief. A recent survey showed these folks don’t trust their heirs’ partners when it comes to managing an inheritance. Although it may mean an uncomfortable discussion, wealthy parents of adult children should make their feelings known if such is the case. There is one saving grace in that in most provinces any gifts or inheritances received during a marriage are not included in the net family property if they are not part of overall family assets such as a matrimonial home or joint bank accounts.

Any gifts or inheritance funds should be kept in a separate account from a spouse or common law partner and in the name of the heir alone. Also, a cash gift could be given by way of a loan which also protects it from creditors. In any case, a marriage contract in these cases, might be a wise idea.

A British Columbia lawyer experienced in estate planning and estate administration can draw up documents using the right language to protect an heir’s assets. A lawyer will also be able to offer advice on prenuptial and postnuptial agreements as well as cohabitation agreements that may be able to protect a client’s inheritance. These documents tie in closely with estate planning.

What older residents should know about power of attorney

Estate administration: Keeping the wealth in the family

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