If you are reading this, you have probably decided that it is finally time to cross “getting a will” off your list of things to do. Before you get started, you may have questions. For instance, what is the difference between having a will and estate planning? Are they the same thing? What is an estate planning lawyer?
What is a Will?
A will is simply a legal document that sets out a person’s wishes about what will happen to their assets at the end of their life. There are formal legal requirements to formatting a will, and these requirements can change depending on where you live.
What is Estate Planning?
First, let’s take a step back and define the word “estate”. Your estate consists of everything you own, real estate, cars, bank accounts, investments, and any other assets that make up your net worth.
Estate planning is a comprehensive way of planning for the distribution of your estate. According to the Ontario Ministry of Justice “Estate planning involves the transfer of someone’s assets (e.g. property, money) when they die, as well as a variety of other personal matters.”
An estate plan may include a will. However, a will is just one of the tools available in your lawyer’s legal toolbox to smoothly transfer assets from one generation to the next.
For clients with more complicated estates, your lawyer may work with your accountant or financial planner to draft a plan. This approach takes into account the potential tax, financial, and business implications of succession while keeping your wishes and charitable intentions at the forefront.
I Just Need A Simple Will — What is the difference between a Will and Estate Planning
Every estate planning lawyer has heard the words “I just need a simple will” many times. Even lawyers that don’t specialize in wills and estates may come to them saying “My client just needs a simple will, can you help them out?”
This is a similar situation to when a friend asks you for a small favour. You want to help them, but you need more information before you can go ahead. Sometimes the favour is quick and straightforward, but sometimes the favour turns out to be more complicated than you or your friend understood it to be at first.
Now, there is nothing wrong with “just needing a simple will” and for many people, a will may be enough. However, most people benefit from more comprehensive estate planning. Until an estate planning lawyer learns more about your specific circumstances, they can not make an accurate judgment about what you need. Many situations require more extensive estate planning to avoid common pitfalls.
In addition, estate planning will help you prepare for other possible life events, such as needing help with managing your personal or financial affairs.
What is Involved in Estate Planning
The estate planning process usually starts with information gathering. The lawyer may ask you to fill out a form detailing your beneficiaries, family relationships, and wishes, as well as your assets and liabilities.
You may wonder, why do I need to provide all this detailed information to the estate planning lawyer? All I want is a will.
Your lawyer needs to gain a full picture of your family and financial situation to be able to give good advice. When they have all the information, an estate planning lawyer has the specialized knowledge to point out issues that might not be immediately apparent to others. For example, gifts to minor children can be problematic if they are not handled correctly. Estate lawyers will pick this up right away, although others may not realize there could be an issue.
People tend to hesitate to think about estate planning. Because of this, as they assemble information for the lawyer, issues they hadn’t previously considered, such as the ongoing care of a beloved pet, an obligation as a trustee, or dealing with the family cottage will pop up.
Once your estate planning lawyer has a good grasp on your family and financial circumstances, they will come up with an overall plan. They may want to clarify your intentions or discuss some options with you. Documents will be drafted, reviewed, and signed.
What Legal Documents Make up An Estate Plan
Estate planning is not a one-size-fits-all undertaking. Depending on what is best for your circumstances, estate planning may include legal tools such as:
- Joint tenancies;
- Corporate Re-organizations;
- Inter-Vivos Trusts;
- Testamentary Trusts;
- Powers of Attorney; and
- Health Care Directives.
Do You Need a Lawyer to Draft Your Will
In Ontario, it is legal to draft your own will. However, even the Canadian Federal Government website mentions that it is a good idea to seek professional legal advice.
Why is this the case? There are formal legalities involved in will drafting that can cause problems if a will is not drafted correctly. On the lighter side, this can cause complications for your executor and expenses to your estate. On the more serious side, it can result in your wishes not being carried out as you intended, or even worse, the will being declared invalid. Unfortunately, these issues usually only become clear too late, when the time comes to deal with the estate.
On a related note, if you are wondering — do you need a lawyer for estate planning? It is highly recommended. The courts are filled with examples of “DIY” estate plans gone wrong.
Does Estate Planning include Planning for Incapacity
A complete estate plan usually includes planning for the eventuality that you may need help managing your affairs. When you plan ahead, you maintain control over who your representatives will be.
Anyone with a close friend or relative that struggles with a debilitating mental or physical condition will tell you that incapacity planning is just as important (if not more important) than planning for an estate. You may have experienced assisting a loved one in their later years and been grateful there was a power of attorney in place. On the flip side, perhaps you struggled because there was no attorney appointed. Having powers of attorney and personal care directives in place can alleviate worry and stress both for you and your loved ones.
In summary, most people think that all they need is a “simple will” and sometimes that is true. However, more often than not, many people would benefit from more comprehensive estate planning.
Do you have questions about wills or estate planning? To get the facts, consult with an experienced estate planning lawyer. Call RBHF Professional Corporation at 613-546-2147 or contact us to learn more.
This article provides general information and does not constitute legal or other professional advice. It should not be relied on as legal advice or opinion. Please contact RBHF Professional Corporation for detailed legal advice should you have questions of any kind.