August 2019 - Garton & Harris

Common sense should accompany a power of attorney

August 19, 2019/in Power of Attorney /by gartonandharris

Fraud has long been associated with some aspects of estate planning. British Columbia residents who are planning their estates and deciding on someone to look after their power of attorney should take the time to make a prudent decision and choose someone they trust implicitly. A power of attorney is an extremely potent document and the person chosen to act on someone else’s behalf, should the person be unable to do so, needs to be someone who can manage a grantor’s financial affairs responsibly.

Financial institutions need to ensure the person who is acting on a power of attorney actually has the authority to do so. Banks have the right to refuse a power of attorney for a number of reasons: the document may be outdated, could be unclear or doesn’t conform to the bank’s policies. They have the right to question any circumstances they believe to appear suspicious.

Banks may ask that a grantor of a power of attorney get a capacity assessment. In other words, they want to make sure the grantor was of sound mind when the document was created. Having legal advice when creating such a document is essential since having a power of attorney that is in limbo can create undue problems for an individual’s estate.

British Columbia residents should create a power of attorney when they are still of sound mind to do so. A lawyer can assist clients in creating a document that will hold up legally. A lawyer can also work with a client to update the document — and other estate planning documents — as his or her life changes.

What does “Probate” mean?

August 7, 2019/in Uncategorized /by gartonandharris

The probate process is when a court declares a will to be valid, and authorizes the named executor to administer the estate. It’s an important step in the estate administration process – but many people may not realize they need to perform this step.

The average person is most likely not familiar with estate laws, as he or she may not have to deal with the loss of life on a daily basis. However, an experienced estate lawyer assists different people with this step regularly, and can provide you with assistance on what happens next after a loved one passes away.

When a loved one dies, the surviving family and friends may think all that needs to be done is to find the will, and then start following the instructions within. However, there’s a slightly more complex process to start administering an estate. Many provisions of a will may require access to assets that only the deceased had control over, such as bank accounts and ownership of physical property.

In order to administer these assets, access has to be given to a trusted individual, known as the executor. For an executor to be given this access, the will needs to be brought before the courts and checked to make sure that it is a legally valid will. This means that the deceased was of sound mind when the will was created, and that the legal requirements – such as the signature of two witnesses – is also provided as well.

Having a court declare a will as valid is known as the probate process. There is a cost involved with the probate process. However, not all situations require that the process need be carried out. As outlined on the Dial-a-law website, instances where an estate is valued at under $25 do not require the probate process. Also, in situations where the ownership of a property is held in joint tenancy – where the right of survivorship would apply – the probate process is also not necessary.

If you have questions about the probate process and what you need to do to administer a will, it’s best to consult with an experienced estates lawyer. He or she will be able to assist you with what needs to be done in your particular situation.

Estate adminstration: RRSPs and RRIFs of a decedent

August 5, 2019/in Estate Administration & Probate /by gartonandharris

Taxes are something about which most adults are concerned. It’s no different when it comes to estate planning. An individual who has been tasked with estate administration duties in British Columbia needs to have some knowledge of how RRSPs and RRIFs are taxed after a person’s death. The values of both are usually included in the amount of assets of the deceased person and subject to taxation, but it’s not always that simple.

Much depends upon who the beneficiary is of those RRSPs or RRIFs. Tax can be deferred if a beneficiary is a spouse or common law partner, a child or grandchild who is financially dependent, or a dependent child or grandchild who has a physical or mental infirmity. There are conditions that apply in these instances.

Canadians should plan their estates with the understanding that funds will be need to pay income tax owing on these accounts when the time comes since a beneficiary – or an estate administrator for that matter – may be on the hook for doing so if that individual is not paid. Of course an individual has the option of reducing the amount of funds in these plans to try to reduce the tax, but that decision hinges upon how it’s done and whether the individual needs the money. The tax bracket in which the annuitant finds him or herself also might play a part in making that decision.

A British Columbia lawyer experienced in the laws that accompany estate administration can provide clarity on issues like RRSPs and RRIFs and estate planning. An estate administrator may need clarification on confusing issues like these. He or she may find the task easier after speaking to a lawyer.

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